Congress should nix a regulatory bait-and-switch on hemp

Kentucky hemp farmer Jay Grundy is worried about his farm’s future.

“We’re looking at about a half-million dollar investment into our operation, but with this change we could be on the verge of bankruptcy,” he said from his Marion County farm on a recent Saturday.

The change that concerns Grundy is a proposed repeal of a portion of the 2018 Farm Bill. That bill brought almost the entire hemp plant back to prominence (and legality) for farmers. Now the U.S. House Appropriations Committee has endorsed a change that would reduce the amount of legally-allowed delta-9 THC from 0.3% to zero. For Grundy and thousands of other hemp growers, the market for their crops would be utterly destroyed.

According to the Kentucky Department of Agriculture, the vast majority (87%) of hemp production in Kentucky is for extracts like CBD and other cannabinoids. Because even most non-intoxicating hemp products contain a trace amount of THC, the pending congressional change would wipe out virtually the entire regulated hemp-consumable market, leading to widespread farm closures and job losses. 

It would also federally recriminalize hemp products like full spectrum CBD oil, stripping access from millions of Americans, including veterans, first responders and others who rely on them for relief of chronic pain.

Hundreds of other Kentucky farmers moved into hemp after 2018, driven in large part by the belief that the hemp prohibition was finally and permanently over, that the regulatory changes would allow farmers to discover new markets and make new investments in this long-dormant Kentucky crop.

“Our investments need a minimum of five to eight years to recover,” Grundy said.

Kentucky farmers have weathered the rise and fall of tobacco and the changes that have come with it. Today, farmers are worried about other countries’ tariffs on their exportable farm goods. And, of course, every farmer must contend with uncertain market conditions, pests, weather and natural disasters.

The regulatory uncertainty that Congress may foist upon them adds insult to injury.

It’s no wonder that Kentucky Agriculture Commissioner Jonathan Shell strongly opposes the recriminalization of hemp products.

“Kentucky’s farmers deserve stability and support as they work to grow and diversify their operations,” Shell said. “We’ve seen strong progress in hemp production, including significantly increased acreage from last year – an encouraging sign of the industry’s resilience and potential.” 

And it’s no coincidence that Texas Gov. Greg Abbott recently vetoed a similar effort to ban hemp products after strong public outcry.

The proposed repeal would have significant impacts on Kentucky and beyond. 

Over the last 11 years, American farmers have rebuilt a domestic supply chain of hemp and hemp products since 2018. Whitney Economics estimates that U.S. farmers today supply the raw materials for a hemp consumable market valued at $28.4 billion, supporting 328,000 jobs in agriculture and retail, generating more than $13 billion in employment impact and contributing $1.5 billion in state tax revenues.

Hemp farmers and the hemp business industry aren’t looking for a handout. In fact, hemp industry leaders are trying to work with Congress to establish responsible, science-based consumer protections that would mean robust testing, transparent and factual labeling and packaging standards, and meaningful efforts to restrict the sale of intoxicating hemp products to those over 21.

Beyond destroying the vast majority of the revitalized hemp industry, recriminalizing hemp would quickly shift demand to criminal enterprises that care far less about product quality or the age of their customers.

Grundy says he’s hopeful that a happier resolution is possible.

“As an industry, we want to get rid of the bad actors,” he said, “but we can do that without wiping this whole industry away.”

Jonathan Miller, a former Kentucky State Treasurer, is General Counsel of the U.S. Hemp Roundtable. Caleb O. Brown is CEO of the Bluegrass Institute for Public Policy Solutions.