Marijuana Business Magazine March 2019

March 2019 | mjbizdaily.com 53 He also knows that a quality, high-CBD seed should cost 50-80 cents. “I’ve shied away from any deals that seemed too good to be true,” Frey said. A good alternative if you can’t trust your seed seller is to plant clones sourced from a well-established, reputable nursery. “You definitely pay up front for that,” Frey said. “But in the end, that pays off.” For comparison’s sake: Frey planted a crop with seeds at 80 cents apiece, with an 80% germination rate, and removed about half the male plants. He estimated his cost per plant, with labor included, totaled up to $6 per plant. He also planted a field with clones that he purchased for $4 each and lost less than 5% when he transplanted them. Moreover, the consistency he achieved with the clones created a denser canopy, thereby naturally controlling weeds and cutting down on labor costs. FOLLOW THE WINE MODEL As the field of hemp growers gets more crowded, one way to differentiate yourself is to highlight the unique qualities of the region where you’re growing. Consider it similar to what the wine industry calls terroir—the taste and flavor given a wine by the environment in which it is produced. “If you live in Happy Valley, you need to take that and market your farm as Happy Valley CBD,” Sharp said. “Just keep banging that drum, because that’s yours.” And be aware that hempseeds sourced in other regions may not perform well in your region if the climate is dramatically different. MARIJUANA IS NOT THE SAME AS HEMP As wholesale prices for marijuana slide downward, more recreational MJ cultivators in states such as Oregon are pivoting to hemp production. The phenomenon, which was occurring even before the Farm Bill’s passage, allows marijuana growers to diversify their crop and reduce risk. In Oregon, marijuana farmers have a number of incentives for making the pivot. In the case of hemp, the state doesn’t have the same rules limiting how much growers can cultivate. Hemp cultivators also don’t face the high licensing and application costs seen with marijuana. Plus, the cost of production is much lower. You’re growing outdoors, for one, with far less energy costs than an indoor cannabis cultivation operation. For hemp, you’re looking at a cost of about $5 per pound; with marijuana, it’s about $300 more per pound. But if you are planning to diversify into hemp, avoid taking on too much land, at least initially, Sharp advised. It’s easy to underestimate the labor needs for an acre of hemp. Commercial hemp farming equipment is slim to none, and planting, weeding and harvesting hemp farms requires a lot of manual labor. During planting and harvest, Frey estimates he needs about two workers per acre. The rest of the year, he employs one person for every 2 acres. “It’s very labor intensive,” he said. — Bart Schaneman “I think you’re going to see a lot of banks get into this—banks that have been staying out—because of what the Farm Bill has done in terms of removing legal uncertainty,” Hartenbach said. TAX RELIEF ARRIVES Another immediate Farm Bill financial advantage: taxes. It’s not too soon to start claiming business deductions, said Sean Covi, a vice president at Trilogy Financial, a California-based financial services firm with offices in Denver. Covi, who works with businesses to Hemp is stored in a Kentucky warehouse before processing. Photo by Media Collaboratory