Maine is proposing new hemp farming rules that would double a farmer’s per acre cost, allow them to grow indoors and change how the psychoactive element of their crop is measured in such a way that a quarter of them would not have been able to sell this year’s harvest.

Maine has proposed the changes to help ease the state’s 154 hemp farmers into compliance with looming federal regulations, which are more restrictive than the rules governing that the state’s three-year-old hemp program.

“There has been a lot of support for and interest in this new crop,” Ann Gibbs, Maine’s director of animal and plant health, said in a letter to the U.S. Department of Agriculture. “However, we are concerned that the requirements proposed by the (federal) rules will require some major adjustments.”

Maine is proposing to continue its state-run hemp program through the 2020 growing season under its new rules before deciding whether to seek federal approval of the state program, or simply join the USDA-run national hemp program that is under development.

The proposed rules, which will be the topic of a public hearing Jan. 7 in Augusta, would keep the $100 application fee and base license rate of $500 the same, but would increase the per-acre cost from $50 to $100, with a maximum license fee of no more than $20,000.

“The proposed per acre price went up because of our concern that the new federal standards will drop the number of growers and then we will not have the revenue needed to run the program,” said Gary Fish, the state horticulturalist who oversees the state hemp program.

The $20,000 cap could help Maine’s largest grower, New England Hemp Institute, which paid $42,000 to grow 842 acres across six towns in 2019. The second largest grower, Maine Farmers Association, would be helped by the cap, too, if it wants to continue its 222-acre operation next year.

THC MEASURES

In its first two years, Maine prohibited indoor hemp cultivation, gearing the program toward farmers in search of a unique cash crop that could diversify their holdings. This year, however, Maine launched an indoor hemp pilot program for 10 growers to see which varieties would thrive in greenhouses.

While indoor cultivation uses more power, and results in higher costs of doing business, it reduces risks for cross contamination with nearby marijuana growers. That’s a concern because of the restrictions on how much THC, the psychoactive element in cannabis, a plant contains – a problem that plagued Maine’s hemp farmers this fall.

But the biggest change in the proposed rules is the way Maine would calculate a hemp plant’s THC, the psychoactive compound in cannabis that gets users high. Under current rules, Maine does not include a THC acid that is inactive in raw cannabis. Under its new rules, which mirror the pending USDA rules, it would.

If that rule had been effect in 2019, the crops of 27 percent of Maine’s hemp farmers would have tested “hot,” with total THC levels that would have classified it as marijuana instead of hemp, requiring the farmers to destroy their crops.

Maine farmers attending a hemp meeting Monday at Sheepscot General at Uncas Farms in Whitefield, the home of Maine’s first pick-your-own hemp operation, said a total THC formula that included THC acid in the hemp-or-marijuana test would make hemp a far less profitable crop for them.

The total THC formula would force many Maine hemp farmers to pay more for hard-to-get seeds that would not fail the THC test while reducing the value of their end crop, they said. Plants that are low in THC are also lower in CBD, the compound so highly valued on the wellness market.

If local farmers come out against the proposed THC calculation change, the Department of Agriculture, Conservation and Forestry may decide to stick with its current THC formula for 2020 and urge farmers to make preparations for a seed change for the 2021 growing season, Fish said.

“It’s all about transition,” Fish said Monday. “We’ve been trying to get them ready.”

The state program began in 2016 with one grower who harvested seed from less than an acre and has blossomed into 181 licenses held by 152 farmers to plant more than 2,000 acres of hemp in each of Maine’s 16 counties, according to state data.

The number of hemp licenses issued nationwide has quadrupled since the passage of the Farm Bill last December, according to reports issued this fall by New Frontier Data, a national cannabis research firm. Licensed cultivation hit almost 480,000 acres in 2019, a 328 percent year-over-year increase.

That is more hemp than the U.S. planted in 1943, at the peak of cultivation during World War II.

Farmers are responding to America’s obsession with all things CBD. According to the Brightfield Group, a national marijuana consulting firm, U.S. consumers spent $591 million on CBD products in 2018 in the belief that it eases ailments such as insomnia, anxiety, depression and pain.

The U.S. market for hemp-derived CBD is expected to surpass $1 billion in 2019, a 133 percent increase over 2018 sales, and may eclipse $10 billion by 2024, representing a five-year compound annual growth rate of 54 percent, according to industry estimates.

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