Since the 2018 Farm Bill authorized hemp as a crop, the market for hemp CBD products has risen and fallen, and optimistic grain and fiber hemp growers have experienced bumps along the road.
Dr. Craig Schluttenhofer, assistant professor of natural products and hemp researcher at Central State University in Ohio, said market decline is primarily a result of more supply than demand.
“There was a lot of interest on the CBD side and we have seen a large contraction of that market,” said Schluttenhofer. “There are fewer hemp growers and less acreage nationally. There hasn’t been the strong demand for CBD products that was expected.”
But it isn’t all bad news. “Recently, there’s data that prices are somewhat stabilized,” he said, adding that there’s a lot of speculation about the market. “I think it’s unlikely we’re going to see the price go up significantly because we need more people demanding it than are growing it, and a number of people are growing it successfully.”
Schluttenhofer said while CBD products are selling well, consumer awareness remains a challenge. “It comes down to marketing and finding someone to buy the product,” he said. “Generally, it takes a good [business] plan to have gotten there, but not necessarily for niche markets.”
He noted many CBD growers are capitalizing on an uphill trend and demand for smokable flowers, a higher value product but more work for the grower.
The upcoming Farm Bill will likely be the next opportunity for changes in hemp legislation. There has been talk about pushing for an increase in the THC limit, which would potentially reduce testing requirements. There has also been a push for not requiring testing for grain and fiber crops.
“With selective genetics, testing hot isn’t an issue” for grain and fiber, said Schluttenhofer. “With harvesting fiber, it’s irrelevant because harvest happens before female plants start flowering. For grain, there are female plants, but plants are diverting resources into setting seed so there’s a loss of cannabinoids.”
Regarding hemp grown for fiber, reduced testing requirements will reduce the cost of production. Those selecting for fiber varieties to supply the market with seed will still have to be cognizant of cannabinoid levels, but good genetics can help ensure lower costs. Testing for hemp grain is more complicated – lower requirements will save the grower money but cannabinoid testing will still be required to ensure products are “generally recognized as safe.”
More recently, talk is centered on newer products such as Delta-8, Delta-9 and other products that fall in a loophole. “A lot of states are grappling with how to handle these products,” said Schluttenhofer, “whether they’re going to prohibit or allow them, and if they allow them, how that will work. It’s the same with THCA. That’s probably going to be a byproduct – making some broad-spectrum products where they can distill off the THC.”
He added that about 20 new hemp-based products are currently available, but not all are 100%-hemp derived.
Schluttenhofer said at this point, these ideas are merely floating around for the next Farm Bill, and it’s difficult to determine which concepts will have sufficient traction to become part of the legislation.
No matter the purpose of hemp – grain, fiber or CBD – the 0.3% limit for THC is always the stickler. “Genetics is the predominant driving factor, even if you select for just CBD production in a plant,” said Schluttenhofer. “You can select for production of CBDA (a cannabidiolic acid), which can be heated to CBD.”
However, the process isn’t 100% efficient, and there will be some trace levels of Delta-9 THCA in the process. “As CBD level increases, you’re getting paid by the percentage of CBD per pound of raw material,” said Schluttenhofer. “You want more CBD for more dollars, so more pounds of material to maximize yield and dollars. As you start going up, THC levels follow, and that’s where the THC requires monitoring because at some point, most varieties of CBD hemp will exceed 0.3%.”
The 0.3% threshold is largely driven by how well the plant is growing, fertility and other factors. “We don’t have a good handle on how exactly those all play a role,” he said, “but they impact the plant and how much cannabinoid the plant produces. Growth impacts total THC.”
THC levels in grain and fiber aren’t usually an issue partly due to the growth stage at harvest, and varieties don’t produce nearly the total level of cannabinoid that push the legal limit.
“Most of them top out at 1% to 3% total CBD, so the corresponding level of THC is reduced and is not an issue,” said Schluttenhofer. “They’re selected for other traits, so maximum yield for CBD has not been the target. They’re intentionally selected for low level CBD.”
He noted the recent allowance of hemp in building materials, which may incentivize hemp fiber production. In September 2022, hemp building materials were added to the U.S. Residential Building Code, which legalizes the use of hemp-lime (hempcrete) as a standard material in residential construction starting in 2024.
“There’s growing interest in grain and fiber products,” said Schluttenhofer. “The challenge has been getting capital investments for grain processing. On the fiber side, infrastructure is needed for decortication (the process that separates bast and hurd fibers) and processing, which isn’t cheap.” he added that it’s difficult to garner interest from companies, who must be willing to make significant start-up investments.
“We’re looking at finding ways to bring products online that don’t require as much capital for expensive decortication lines,” said Schluttenhofer, adding that paper products are one option. “There are a lot of potential applications, but we have to think about the process in a different way.”
At Central State University, Schluttenhofer is working on several hemp-related projects, including a project examining the use of hemp grain as a feed ingredient for fish and research on understanding the chemistry of smoke and vape hemp products.
“We’re also working with a local grower on how dairy manure application impacts plant growth,” said Schluttenhofer. “We’re looking at the chemistry component, nutrient cycling and runoff.”
He is also overseeing a large grain and fiber variety trial, focusing on flowering time, to get a better handle on harvest time. While there are some fertilization data available for grain and fiber hemp, the industry lacks information on optimal fertility requirements for CBD hemp.
While Schluttenhofer works with all aspects of hemp, he’s particularly interested in developing grain and fiber markets for Ohio and surrounding states. “Some of the new U.S.-bred genetics and the more traditional dual-purpose varieties in Europe had a long enough season that’s reasonable for grain production in Ohio,” he said. “I see our information applying in a broader context.”
by Sally Colby