Marijuana Business Magazine April 2019

Marijuana Business Magazine | March 2019 34 F irst, hemp defeated almost five decades of prohibition for the cannabis sativa plant. Now, it’s time for hemp to defeat the next big problem facing both marijuana and hemp producers: greedy politicians. Hemp producers are still celebrat- ing the 2018 U.S. Farm Bill, which brought hemp out of the Controlled Substances Act. Hemp is now treated just like wheat or potatoes. It’s a fully legal crop, due all the protections and research the U.S. federal government brings to any other commodity. But hemp farmers are not treated like other farmers. Instead, they’re squeezed for cash in state after state, where agriculture regulators complain it’s so unbelievably complex to re-introduce hemp that they’re justified in charging folks hundreds of dollars just to apply for the right to grow it. Nonrefundable hemp application fees of $500 are not uncommon in states with hemp pilot programs. Hemp farmers get licenses and then must pay per-acre fees (or per- square-foot fees for indoor grows) for the right to use those licenses. The government shakedown doesn’t stop there. All states with hemp programs charge farmers for THC testing, fees that can run into the thousands when growers in remote areas are charged mileage fees for inspectors to come collect samples. If the hemp comes back "hot," farmers in most states can get a sec- ond test—but they have to pay those fees all over again. Many states also pile on expensive security requirements, making it the farmer’s problem—not local law enforcement’s—to make sure thieves don’t target legal hemp. It’s a bloated system that would have traditional, commodity farmers howling. But hemp farmers don’t complain. After all, growing hemp is a bargain compared to what most states charge marijuana producers. Marijuana cultivators are routinely charged six figures to get licenses, not to mention steep excise taxes and fees once they start producing marijuana. It’s no wonder so many marijuana cultivators are giving hemp a try. For now, hemp and marijuana cultivators seem happy to pay endless taxes and fees, so glad are they to be regulated and not treated like criminals. But as the nation marks Tax Day this month, the annual deadline for paying dreaded income taxes, it’s worth examining hemp fees and what they say about the larger cannabis economy. Hemp fees that seemed reasonable for agriculture regulators with no idea how to manage hemp production are starting to look a little steep as states rake in years’ worth of payments. And what have hemp farmers got- ten for those fees? All these state hemp pilot projects have resulted in precious little agronomic data the public can easily access. Almost every week, I get questions from potential hemp investors wondering how much it costs to grow an acre of the plant, how much they can get for it and who will buy it. That information is readily available for other crops. In most hemp states, though, regulators simply shrug and point out that hemp is an emerging market. Baloney. States should be doing a better job compiling market-ready intelligence on hemp’s profit potential and challenges. Hemp may be too young a market for robust agronomic research, but it’s time for hemp producers to start asking how their fees are being spent. Hemp is paving the way for marijuana to come out of the black market. Let’s see it also pave the way for a long-overdue reassessment of why politicians see both hemp and marijuana as cash cows. Kristen Nichols is the editor of Hemp Industry Daily. Reach her at kristenn@hempindustrydaily.com. Shakedown Street Why the hemp industry should lead the next big cannabis fight: excessive fees Hemp Notebook | Kristen Nichols