Hemp in Virginia

state-authorized industrial hemp growing in Augusta County
state-authorized industrial hemp growing in Augusta County
Source: Virginia Department of Agriculture and Consumer Services, Annual Report on the Status and Progress of the Industrial Hemp Research Program (2018)

The Marijuana Tax Act in 1937 and the Controlled Substances Act blocked farmers from growing hemp. The tetrahydrocannabinol (THC) concentration in the plant was irrelevant; marijuana growing was banned.1

In 2014, the US Congress authorized state agriculture departments and universities/colleges to grow hemp, so long as the tetrahydrocannabinol concentration did not exceed 0.3 percent. Within Virginia, James Madison University (JMU), University of Virginia (UVA), Virginia State University (VSU), and Virginia Tech (VT) began research programs. In 2018, the state authorized private institutions of higher education to join in the research.

In 2016, the four state-owned universities planted 37 acres in hemp. By 2018, that grew to 135 acres on both privately-owned land and public land. Virginia State University grew marijuana on its Randolph Farm in Chesterfield County. Virginia Tech grew the crop at Kentland Farm in Montgomery County, the Northern Piedmont Center in Orange County, the Southern Piedmont Agricultural Research and Extension Center in Nottoway County, and the Tidewater Agricultural Research and Extension Center in the City of Suffolk.

The University of Virginia research tested five varieties on farms in Albemarle, Augusta, Fluvanna, Lee, Northampton, Scott, and Wythe counties, plus development of strains that would produce high percentages of cannabidiol (CBD) under greenhouse conditions. Weeds out-competed hemp in many trials, unless a burndown herbicide had been used to prepare the field. Fields planted in July after harvesting hay, without herbicide use, produced a crop of weeds rather than hemp. Growing fields of industrial hemp organically in Virginia will be a challenge.

industrial hemp growing in August 2018, as part of James Madison University research
industrial hemp growing in August 2018, as part of James Madison University research
Source: Virginia Department of Agriculture and Consumer Services, Annual Report on the Status and Progress of the Industrial Hemp Research Program (2018)

The Virginia Department of Agriculture and Consumer Services tested the hemp grown by the universities. In most samples, the plant material had a tetrahydrocannabinol (THC) concentration below 0.3 percent. Four samples exceeded the threshold, and in one case the concentration was 1.86 percent.

Virginia Department of Agriculture and Consumer Services got a permit from the Drug Enforcement Administration to import hemp seeds from international sources, then supply them to the universities. The Federal agency would not specifically authorize transport of domestically-produced seed across state boundaries, but the Virginia Attorney General assured the universities that their permits would not be jeapardized if domestic seeds were acquired. The official state report in 2018 used careful phrasing to describe how two universities skirted Federal regulations:2

JMU and UVA elected to procure their own industrial hemp planting seed for the 2018 growing season.

existing equipment can be used for hemp production
existing equipment can be used for hemp production
Source: Virginia Department of Agriculture and Consumer Services, Annual Report on the Status and Progress of the Industrial Hemp Research Program (2018)

Advocates for legalizing marijuana often note the George Washington grew hemp. Mount Vernon acknowledges that, and started growing hemp at the plantation in 2018. Both Montpelier and Mount Vernon partnered with the University of Virginia's industrial hemp research program, which provided the legal authority to cultivate hemp for the education of tourists.

George Washington grew hemp for the fiber, not for smoking to obtain the psychoactive "high" from tetrahydrocannabinol (THC). In his time, hemp seed oil was also used like linseed oil from flax. Mount Vernon makes clear:3

There is no truth to the statement that George Washington grew marijuana. His hemp crop was strictly the industrial strain needed for the production of rope, thread, canvas, and other industrial applications.


Source: Mount Vernon

The Virginia General Assembly established a program in 2018 that allowed farmers to grow industrial hemp without being associated with a university research program. Registration with the Virginia Department of Agriculture and Consumer Services made the crop a legal product. The 2018 Industrial Hemp Grower Registrations authorized growing the crop in 55 Virginia jurisdictions, indicating the potential interest in the agricultural community.

The focus at the time was on producing the fiber in the stalk, and the potential use of the oil in the seeds for biodiesel.

The Virginia Department of Agriculture and Consumer Services did not permit farmers to grow hemp in order to extract cannabidiol (CBD) and sell it for distribution to those without a state registration. The state was unwilling to allow the growers to produce CBD and supply the stores selling CBD-infused products.4

industrial hemp has a concentration of tetrahydrocannabinol (THC) below 0.3 percent, too low for users to get high
industrial hemp has a concentration of tetrahydrocannabinol (THC) below 0.3 percent, too low for users to get "high"
Source: Virginia Industrial Hemp Coalition, About Hemp

The Virginia Hemp Company sought to recruit hay farmers in 2018, getting them to grow hemp instead. It planned to use the best fiber for clothing and to press the remainder into "hempcrete," a substitute for concrete which could be used in building houses. There was no significant demand for fiber to be used for making rope, since nylon had filled that niche after World War II.

The company proposed building the state's first hemp processing plant in Mount Jackson, and speculated that there would be a demand for 30-50 fiber-producing plants within Virginia. A farmer in the Shenandoah Valley who had been growing hemp in asociation with James Madison University research commented:5

We have a long history in the Valley here growing hemp; we're just trying to bring back a crop... It's not a new crop, it's just new to this generation.

That initiative failed to thrive and the plant did not open as planned in 2019, but later that year 2019 Shenandoah Valley Hemp received approval from the Elkton Town Council to open its processing plant. The company, organized by five brothers who grew a crop of hemp in 2019, targeted cannabidiol (CBD) as the final product rather than the fiber. Their market advantage was to be transparent, with testing to show the quality of their product. The mayor of Elkton welcomed the business, saying it:6

...really helps to bring an extra life into downtown and diversifies our business community.

industrial hemp, shown 40 days after planting, can be grown to produce cannabidiol (CBD) or fiber
industrial hemp, shown 40 days after planting, can be grown to produce cannabidiol (CBD) or fiber
Source: Virginia Department of Agriculture and Consumer Services, Annual Report on the Status and Progress of the Industrial Hemp Research Program (2017)

The Federal government policy towards growing hemp changed substantially when the US Congress passed the 2018 Farm Bill. It removed hemp from the list of federally controlled substances. States were allowed to license farmers who planned to grow hemp for cannabidiol (CBD), so long as the plant contained less than 0.3% of tetrahydrocannabinol.

A product containing cannabinoid derived from licensed hemp growers, and processed consistent with all state and Federal regulations, was no longer classified as a Schedule I substance. It was no longer criminal for a state-licensed farmer in Botetourt County to grow the product desired by LilyHemp Boutique and Gourmet, which processed hemp and sold CBD-infused products at its store in Vinton and online.7

sale of CBD-infused products derived from industrial hemp growers were legalized in 2018
sale of CBD-infused products derived from industrial hemp growers were legalized in 2018
Source: LilyHemp Boutique and Gourmet, Shop Lilyhemp

The law did not grant a blanket authorization for all products with cannabidiol (CBD). Products made from marijuana provided by unlicensed growers were still illegal, and many CBD-infused products sold in retail outlets remained illegal in the eyes of the Drug Enforcement Administration.

The 2018 Farm Bill allowed hemp growers to buy crop insurance, and for processors to ship cannabidiol-infused items through the US Postal Service. The US Department of Agriculture announced before the 2020 crop was planted that hemp growers could qualify for Multi-Peril Crop Insurance.

At least 20 acres had to be planted for fiber and grain, or five acres if the hemp was planted to produce cannabidiol (CBD). Insurance required having a history of production the previous year, so first-time growers could not quality. Insurance payments for 55% of the market price would be paid if crop losses exceeded 50% of expected production. Farmers had to have signed a crop sale contract prior to a March 16, 2020 deadline, which also limited potential use of the insurance program. The insurance addressed weather-based risks, but no payments would be paid for hemp where the tetrahydrocannabinol (THC) level was higher that 0.3%.

After 2018, banks and other businesses in the financial services industry could finally loan money to hemp farmers, and could process credit card transactions for purchase of products with cannabidiol - so long as the threshold of 0.3% of tetrahydrocannabinol (THC) was not breached.

Legalization created a challenge for state officials. Virginia State Police had a laboratory test to determine if marijuana has a tetrahydrocannabinol (THC) concentration below 0.3%, but no field test that could distinguish industrial from intoxicating hemp.

If a person with a grower, dealer, or processor registration was caught with marijuana, it could be sent to a lab for testing. If the tetrahydrocannabinol (THC) concentration exceeded 0.3%, the person could be charged with drug possession. A person without a registration for either medical marijuana or for growing/dealing/processing industrial hemp could not assert an "affirmable defense" to avoid punishment for drug possession.8

The USDA Risk Management Agency offered Whole-Farm Revenue Protection for industrial hemp starting with the 2020 crop year. Crop insurance was limited to coverage of hemp grown for fiber, flower or seeds; hemp with tetrahydrocannabinol (THC) above the compliance level did not qualify.9

In November, 2019, the Food and Drug Administration (FDA) announced that it did not consider cannabidiol to be "generally recognized as safe" as a dietary supplement for use in human or animal food. Products infused with cannabidiol were not legal to sell, in the eyes of the Federal agency. There was no announcement of any effort to interfere with sales, however, and the unregulated marketplace continued after the announcement.

Even without acceptance of health claims for cannabidiol products by the Food and Drug Administration, the hemp market was expected to grow dramatically. As one observer noted:10

It's a huge deal because it's a domino effect. Banks can get involved now and if banks get involved, then credit card processors get involved - and if that happens, then big box stores like Target and Wal-Mart get into it... All these big players are going to come in.

industrial hemp is valued for both its fiber and its oil
industrial hemp is valued for both its fiber and its oil
Source: Appalachian Biomass Processing, Fiber Hemp Info

As the legal hurdles for growing hemp for fiber were simplified, 1,183 growers, 262 dealers and 117 processors got industrial hemp licenses from the Virginia Department of Agriculture and Consumer Services. The farmers registered 2,200 acres for growing the new crop. In 2018, the state had approved 85 grower permits.

Tobacco farmers were encouraged to grow just a few acres the first year. They had the drying barns and other equipment needed to prevent mold from growing on the hemp, plus farm workers who knew how to cut the plants and place them on racks for a month of drying out.

There was no track record for calculating the costs to grow and process hemp, and estimate potential profits. To minimize the economic risk, Cooperative Extension agents advised planting small areas rather a high percentage of the farmland.

The best way to dry the hemp was unknown in 2019. Late that year, a Christiansburg entrepreneur developed a drying kiln using infrared heat to dry the plants, and claimed the low heat would preserve the valuable cannabidiol (CBD) desired by processors. However, one risk was that storage before sale could result in the hemp exceeding the 0.3% cannabidiol (CBD) threshold. Farmers who planned to store hemp until processors offered higher prices the following Spring were at risk of the THC-A naturally converting *after harvest* into THC-C. If the final U.S. Department of Agriculture regulations calculated the 0.3% threshold at time of sale rather than time of harvest, then the stockpiled crop could become worthless.11

Initially, most farmers planned to ship their hemp to out-of-state processors who would make cannabidiol (CBD) from the oil-rich seeds. That oil could also be used as a cooking oil and in salad dressing, while the hulls from the seeds ("hemp hearts") could be added to granola and animal feed.

Special effort was required to manage the buds and clip the apical meristem in order to produce "smokable flower" with less than 0.3% tetrahydrocannabinol (THC). If buds were trimmed too late, they could go to seed. The simplest growing process was to produce for fiber rather than products based on the oils, terpenes, and other natural chemicals in the marijuana plants.

Hay farmers in the Shenandoah Valley who adopted the new crop anticipated there would be a local facility for processing hemp into final products. Shipping hemp stalks to the closest fiber-production facility, which in 2019 was in Louisville, Kentucky, was too expensive. The Virginia Hemp Company had proposed building a facility in Mount Jackson to produce fiber for textiles and hempcrete, but farmers discovered in 2019 that the market demand for cannabidiol (CBD) was greater than for fiber.12

mature hemp plants ready to harvest for fiber, before World War I
mature hemp plants ready to harvest for fiber, before World War I
Source: Bureau of Plant Industry, US Department of Agriculture, Circular No. 41 (1908-1913)

The entrepreneurial opportunity to "get in early" in the hemp business created more proposals that actual processing facilities. Investors announced plans for another hemp processing plant in Halifax County in late 2019. The county's Industrial Development Authority obtained a $250,000 grant from the Virginia Tobacco Commission to subsidize construction of a $6.35 million "Project Phoenix" facility. The name of the company planning to invest $1.9 million and hire over 40 workers was not identified publicly at the time when the grant was approved, because negotiations were underway to obtain more incentives from the Virginia Economic Development Partnership and the Virginia Department of Agriculture Consumer Services.

In the first three years of operation, investors claimed the plant could purchase to purchase $50 million in hemp from farmers in the area. The processing facility investors projected that 68 farmers would each grow, on average, 15 acres of hemp. That would require the farmers to spend $2 million to grow 1,000 acres of hemp, so the processing facility would involve a substantial local commitment beyond the grant from the Virginia Tobacco Commission.

When the Halifax County Board of Supervisors and Industrial Development Authority finally guaranteed a $2.6 million loan and accepted the grant from the Tobacco Region Revitalization Commission in May, 2020, the number of expected jobs was just half of what had been originallly discusssed.

The need for new processing facilities for the new crop was clear. In 2019, the only hemp processor near Halifax County was in Oxford, North Carolina, and that facility was unable to handle more product. A processing plant would stimulate agriculture in Southside Virginia where tobacco was once king:13

Extracting CBD requires an industrial process in a purpose-built facility. Without nearby extraction capacity, a hemp crop is worthless. With it, farmer revenue can be over $30,000 /acre on investment of $12,000/acre...

However, Gov. Ralph Northam's first Economic Development announcement for a commercial processing facility was in Wythe County. Appalachian Biomass Processing announced plans to purchase hemp from 4,000 acres being farmed within a 2.5 hour drive from the plant. Processing would "decortify" the plant stalks into bast fiber (used by textile companies to make fabrics) and hurd (made into high-absorbency animal bedding). Farmers seeking to sell their crop to Appalachian Biomass Processing would need to grow tall plants with long fibers, rather than focus on growing flowers for production of cannabidiol (CBD).

A representative of the customer for the hurd product said it had been importing hemp from Europe, and:14

We know there’s a viable market here because the demand out steps the current supply... But the bottleneck here in the mid-Atlantic is the lack of a fiber processing center.

The chair of the Wythe County Board of Supervisors used the governor's visit to make a bold claim for his community:15

This proves that Southwest Virginia can compete anywhere and that Wythe County will be the center of hemp fiber production in the eastern US.

Appalachian Biomass Processing in Wythe County planned to source hemp from farms within a 2.5 hour drive
Appalachian Biomass Processing in Wythe County planned to source hemp from farms within a 2.5 hour drive
Source: Appalachian Biomass Processing, Sell To Us

The 2019 crop was planted before farmers could identify who would purchase their hemp. Processing plants required time to finance and build, and the shortage of such facilities affected the price of the hemp. Illinois farmers discovered at the end of the season that processors wanted to purchase 5,000 pounds at a time. Farmers guesstimated they would harvest 2,000 to 12,000 pounds per acre, but many had been experimenting for their first year on small plots.

Farmers had to decide at the seed selection stage if they planned to grow hemp for fiber or for cannabidiol (CBD). Tall and slender plants for fiber could be planted with a drill and harvested with a combine, similar to wheat. Plants grown for cannabidiol (CBD) were planted three-six feet apart, and labor-intensive to grow. They were harvested before the CBD-rich flowers were pollinated and cannabidiol (CBD) levels dropped during seed production.

Only female plants were desired by farmers growing for the flowers; for them, male plants that led to seed production were a problem. A farmer who planted feminized seed (costing $1 per individual seed) or cuttings from female plants (costing $4-$7 per cutting) wanted to isolate that field from others where male as well as female plants were planted for a fiber crop. If pollen drifted over, hemp flowers would stop concentrating cannabidiol (CBD) as seeds developed.16

A farmer in Rappahannock County who planted 1/4 acre described herself as a "hempster." She grew 220 plants, drying them after harvest from rafters in a converted garage. She said in late 2019, after her processor backed out from collecting her harvest because their capacity was overloaded:17

We're all in the green rush, we wanna grow for CBD... It's the most amazing, you know, hyped-up, nutraceutical on the market right now...

Across the nation, farmers got licences to plant 400% more acres in hemp in 2019 compared to 2018. An additional 13 states issued licenses, beyond the 21 states in 2018. Only New Hampshire, Mississippi, South Dakota, and Idaho authorized no industrial hemp. 90% of the crop was expected to be processed to obtain cannabidiol (CBD), rather seek the fiber as the primary product. That contrasts with hemp production in colonial Virginia, when the relatively strong and mildew-resistant fibers were desired for manufacture of rope.18

hemp fibers are preferred for production of rope, because they are stronger than cotton and more resistant to mildew
hemp fibers are preferred for production of rope, because they are stronger than cotton and more resistant to mildew
Source: Wikipedia Commons, Textile

The mis-match between supply and the ability to process the harvested crop led to a 50% drop in the price of hemp in Illinois near the end of the season. In Kentucky, in mid-2019 farmers were able to sell their hemp at $4.35 for each percent of CBD in each pound of hemp. That price dropped to less than a dollar by December. Farmers had to consider the marginal cost of harvesting and drying their hemp vs. letting their first crop just rot in the fields.19

Across Virginia, 1,183 industrial hemp growers planted 2,200 acres of hemp in 2019. On the 16 acres in Pittsylvania County, the early adopters of the new crop planned to grow hemp that would contain 6-10% cannabidiol (CBD) but less than 0.3% of tetrahydrocannabinol (THC). Because there was no standardized testing methodology to assess progress through the growing season, 2019 was an experimental year. The Virginia Department of Agriculture and Consumer Services tested crops grown by 75 farmers, and destroyed 18% of the tested crops because they exceeded the 0.3% limit.20

There was no historical track record to guide which farming practices would be most appropriate on different soils. One Pittsylvania County farmer commented:21

It was a big learning curve this year... We learned a lot about what not to do. We're just going to have to wait a couple more years... We got to have something. The tobacco industry is just dying... so hopefully this will be a viable alternative.

hemp flowers and seeds produce tetrahydrocannabinol (THC)
hemp flowers and seeds produce tetrahydrocannabinol (THC)
Source: Virginia Department of Agriculture and Consumer Services, Annual Report on the Status and Progress of the Industrial Hemp Research Program (2018)

One challenge was to ensure safety of the cannabidiol (CBD) product intended for human consumption. The Virginia Department of Agriculture and Consumer Services required Registered Industrial Hemp Processors to treat it as a food additive to be produced under food safety inspection regulations, such as an inspection of the processing facility prior to starting the "food operation."22

Securing the hemp crop was an issue as soon as the 2019 crop was ripe. In Smyth County, an 18-year old and a 20-year old were caught stealing industrial hemp. When arrested, they had two trash bags packed with hemp plants, but local officials suspected they were part of a larger operation.

Potential marijuana buyers would have recognized they were purchasing Cannabis sativa, but without a complicated laboratory test they would not have known initially that the tetrahydrocannabinol (THC) concentration in the industrial hemp was below 0.3%. Marijuana sold before the 1990's typically had 2% tetrahydrocannabinol (THC), but by 2019 some strains bred for high psychoactive impacts had concentrations of almost 30%. Smoking look-alike industrial hemp, with high CBD concentration and low THC, would not create an equivalent recreational "high."

To improve profitability in 2020, the Virginia Industrial Hemp Coalition pressed for the state to raise the 0.3% limit on THC content to 1%. That would reduce the risk that a crop would have to be destroyed because it exceeded the threshold, but industrial hemp with just 1% THC would not be marketable for recreational use.23

the Virginia Department of Agriculture and Consumer Services required cannabidiol (CBD) producers to meet requirements for producing a food additive for human consumption
the Virginia Department of Agriculture and Consumer Services required cannabidiol (CBD) producers to meet requirements for producing a food additive for human consumption
Source: Virginia Department of Agriculture and Consumer Services, Manufacturer of an Industrial Hemp‐Derived Extract Intended for Human Consumption

Theft of hemp plants was also a problem in Dinwiddie County, but at harvest a new issue developed. Residents in the Lake Jordan subdivision complained that the "skunk-like" smell generated during the cutting of the hemp plants was so repulsive that some people were considering moving away. Though the plants lacked high levels of tetrahydrocannabinol (THC), they still contained the chemicals which produced the standard marijuana smell.

One mother expressed her special concerns about the odor permeating the neighborhood:24

I'm scared because I have an African American son who smells like weed.

The Virginia Department of Agriculture and Consumer Services reported that more than 1,300 growers officially registered in 2019 as growers of industrial hemp. That year, they planted 2,200 acres of hemp.

For 2020, some hemp farmers chose to become more vertically integrated and start processing the product on their own farm. TruHarvest Farms in Montgomery County, the largest Virginia producer in 2019, planned to add 15 acres in 2020 to its 85 acres of hemp fields grown in 2019. It built a 30,000 square foot greenhouse, for propagating the plants. It also planned to create creams and items for oral consumption from its crop, as a farm-to-table operation.25

Medical Marijuana in Virginia

Recreational Marijuana in Virginia

TruHarvest Farms in Montgomery County was Virginia's largest industrial hemp farm in 2019, growing 85 acres
TruHarvest Farms in Montgomery County was Virginia's largest industrial hemp farm in 2019, growing 85 acres
Source: TruHarvest Farms, Gallery

Links

warm season grasses outcompete hemp, but in 2018 Virginia State University established a good stand in Augusta County
warm season grasses outcompete hemp, but in 2018 Virginia State University established a good stand in Augusta County
Source: Virginia Department of Agriculture and Consumer Services, Annual Report on the Status and Progress of the Industrial Hemp Research Program (2018)

References

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2. "Annual Report on the Status and Progress of the Industrial Hemp Research Program," Virginia Department of Agriculture and Consumer Services, December 1, 2018, pp.1-5, https://rga.lis.virginia.gov/Published/2018/RD563/PDF (last checked January 31, 2019)
3. "Did George Washington Grow Hemp?," Mount Vernon, https://www.mountvernon.org/george-washington/the-man-the-myth/george-washington-grew-hemp (last checked January 5, 2019)
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growing and processing industrial hemp is legal in Virginia
growing and processing industrial hemp is legal in Virginia
Source: Code of Virginia, Title 3.2. Agriculture, Animal Care, and Food » Subtitle III. Production and Sale of Agricultural Products » Chapter 41.1. Industrial Hemp


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