One man gathers what another man spills.
Right now, do we have a CBD industry or an industrial hemp industry?
I think for the most part we have a CBD industry worldwide. The reason for this is twofold. The first part is perception. Hemp growers are not confident that there is a market for the industrial uses of hemp, like fiber or grain. The next is that people are chasing the cash crop mentality of CBD. I can’t encourage people to move away from this approach enough. The problem is the failure to focus on whole plant use instead of cottage, specialty, horticulture style growth patterns.
According to Hemp Benchmarks, the price of wholesale CBD biomass in the U.S. has fallen 50% since April of this year. And what if it continues to fall? The answer is that this shouldn’t be a cause for concern about the viability of cannabinoids in the marketplace, but rather demonstrates the instability of that market—one of many that exist with the very same industrial hemp plant. This simply highlights the need for a whole plant approach. The whole plant approach begins with seed, and more specifically the right seed for the right purpose.
Let’s take a step back. The U.S. prohibited cannabis in the 20th century. In the decades when hemp in the U.S. was sidelined, European entities strategically built up their seed banks and germplasms. When the 2014 Farm Bill passed, zero acres of industrial hemp were being grown in the United States. This year over 500,000 acres were registered to be grown in the U.S. (registered, not necessarily planted); only five years later.
A whole plant approach requires high-quality hemp seed. High quality means stable, consistent, multi-use plants with near-guarantees in terms of germination, yield, male/female ratios, and the like.
As the U.S. hemp industry grows, farmers are recognizing how access to those varieties of hemp that are recognized by the Organization for Economic Development Seed Schemes (OECD), and are designated as certified, is critical to their success. We’re seeing those European seed banks and others around the world become highly coveted and gain value. In the U.S., while the USDA’s Interim Final Rule did not specifically mandate certified seed, we’ll see the stringent rules regarding total THC testing and defining negligence over 0.5 percent THC, emphasize the importance of reliability, standardization, and risk mitigation. And again, it all starts with seed. Why would a farmer risk planting ‘hot’ hemp, or hemp that doesn’t have certified yield/germination rates. Why would any investor fund it? And you can be certain that major retailers will not place uncertified source derived material on their shelves.
None of this should be alarming. Why? Because getting fixated on CBD is shortsighted. CBD is merely an ingredient; it is NOT an industry.
Think about what you can do with a single hemp crop grown from certified seed. First, you use the seeds; second, you use the fiber; third, you remove cellulose, lignin, sugars from the Hurd; fourth, you separate the shiv and hurd out of the stalks for industrial biomass. Then, and only then, do you look at the big old pile of cannabinoids and terpenes — the keef; the most unstable market of all of the foregoing. One man gathers what another man spills. There are existing markets and distribution channels for every single one of those.
What else does certified hemp seed get you?
It gets you crop insurance, (again) a baseline germination rate, and a standardized yield with performance specifications that are critical to the success of processors, the next step in the supply chain. Why would you invest millions of dollars in an industrial agricultural operation and run the risk that, if you harvest the plant five days late or there’s an abnormal weather event that causes THC to spike, you just became a criminal? That’s not the way business is done; especially with a .5% DEA governed negligence standard.
In the U.S., the CBD industry hasn’t embraced the use of certified hemp genetics. This leads to challenges in consistency. Consistency doesn’t begin with the extraction of cannabinoids. It doesn’t begin the manufacturing of a product. It’s a part of those, but it too begins with seed.
And in no business can you maintain consistency when you are sourcing from hundreds, if not thousands of different inputs. Think about it like this, every can of Budweiser on the planet is made from the same variety of hops. Make no mistake about it, no CBD manufacturer is capable of scaling to the level of Budweiser if they aren’t emphasizing the importance of their supply chain.
And of course, there needs to be room for the “craft” growers and suppliers. But the larger commercial market provides the most opportunities for farmers.
Yes, all of this protects the farmers — black dirt live again!
Next year will be the biggest year for hemp production in the United States in history. It’s the first true year that hemp is transitioning away from arguably partial legalization under research programs to a full-scale commercial agricultural industry.
It’s time to think differently, think larger, and think smarter; that’s right, the farmers are smarter! It starts with certified seed, and it is a whole plant approach. The time has come to move away from the focus of the limited ingredient that is the CBD industry and embrace industrial hemp as a commodity, and the true global industrial hemp industry.