West Virginia’s industrial hemp program is quadrupling year over year, with more than 1,000 acres of hemp expected to be grown in the state next year. 

This year, West Virginia hemp growers recorded 641 acres of industrial hemp cultivation by 132 farmers—a notable increase from the 155 acres grown by 24 farmers in 2018.

For the 2020 growing season, West Virginia has received 407 industrial hemp license applications (as of Oct. 1).

Crescent Gallagher, communications director and legislative liaison for the Department of Agriculture, tells Hemp Grower that these numbers are indicative of a growing national interest in hemp. Since the passage of the 2018 Farm Bill, West Virginia and other agricultural markets have seen considerable interest from farmers willing to add hemp to their crop rotation.

But it’s a steep learning curve, he cautions.

“Some of the challenges obviously are first and foremost finding a market for their raw materials,” Gallagher says. “A lot of farmers are excited to get into this new industry, but something we stress with all farmers—regardless of what crop you’re growing—is you need to have a market in place before you start growing something. You can’t be growing products that there’s no market for. Find agreements with processors. Find agreements with buyers. Ensure you’re growing the right amount of acreage for your farm. You don’t want to be left with all this raw material and nowhere to send it.”

By and large, though, the early years of industrial hemp in West Virginia have been successful. Gallagher says that the 2019 season brought only a 10-percent failure rate among testing samples for THC content. From the 132 farmers this year, the department drew 259 samples; 27 came in over the 0.3-percent THC threshold. Anecdotally, Gallagher says, based on informal conversations with agricultural officials in other states, that seems to be below the norm.

Part of that failure rate is a product of hemp variety experimentation. Growers in West Virginia (and elsewhere) are figuring out which cultivars work best in the local climate. Some varieties end up developing higher THC content than others. Others just don’t grow well in the region’s soils.

The department is working on a seed certification program now. Until that’s in place, state officials continue to work with farmers to learn about what’s working in West Virginia. Gallagher says he met with a farmer who was growing six varieties across 50 acres—and at least one variety was visibly more robust than the others.

Beyond the scope of the hemp program, the state’s agricultural news has been concerning lately: On Oct. 10, Gov. Jim Justice announced a state of emergency for all 55 counties due to drought. Dry conditions have persisted for weeks in West Virginia.

Gallagher says he hasn’t heard specifically from any industrial hemp farmers who’ve been forced to harvest early, but farmers working other crops around the state have certainly been put into a bind this season. Nonetheless, for hemp growers, an earlier-than-expected harvest may not be the end of the world: The 0.3-percent THC threshold looms as plants mature, and no farmer wants to endure a “hot” crop test.

Wisconsin Public Radio reported on the plight of seven farmers in the South Central Wisconsin Hemp cooperative, each of whom submitted harvest notices to the state around the same time—30 days prior to anticipated harvest—in order to get their crop tested by the state for cannabinoid content. The problem is that the actual test times for each farmer were divergent, and, in some cases, the tests recorded “hot” crops that exceeded the 0.3-percent threshold. 

What’s happening in Wisconsin’s harvest is an example of a broader issue in the emergent U.S. hemp industry.

"The discrepancies of when we were actually sampled are huge," FL Morris, president of the cooperative, told the station. "We had one grower that actually gave her 30-day harvest notification one day before another grower, but she was tested 27 days after that other grower."

When state officials record a “hot” crop, it must be destroyed. Farmers, of course, stand to lose thousands of dollars in investments (of time and money) over a fragile chemical margin.

Now, hemp farmers across Wisconsin are urging the state to reconsider its rules and raise the THC content threshold to 1 percent. Clearly, it’s not just the South Central Wisconsin Hemp cooperative; the problem has statewide reach.

RELATED: International Hemp Industry Hopes to Change U.S.’s 0.3-Percent THC Limit

In a manner of speaking, the testing issues in Wisconsin are of the same ilk as testing issues faced by hemp farmers across the U.S.

But the move to a 1-percent THC hemp definition may not have legs; that legal amendment would violate the provisions in the 2018 Farm Bill that legalized hemp in the first place. As the U.S. Department of Agriculture continues to fine-tune its hemp regulations, the 0.3-percent THC limit is very unlikely to change. Doing so at the state level would put Wisconsin in the crosshairs of federal prosecutors.

The Wisconsin Department of Agriculture, Trade and Consumer Protection website describes the process: “If the analysis shows THC levels above 0.3 percent, it is a failed test. Growers can request a resampling, at their expense. Only one resample per field or variety is permitted. If the retest fails, the grower will have 10 days to destroy the entire field where the sample was collected. DATCP will inspect the field after 10 days. If the crop has not been destroyed, DATCP may destroy it and invoice the grower for the cost.”

There is no room for interpretation beyond that paragraph.

"There absolutely is significant risk here that you could do everything right and still end up with a hot crop at the end of the season. We experienced that in our first year. We knew that we would experience it again this year," DATCP Plant Industry Bureau Director Brian Kuhn told WPR. "We had about a 10-percent hot crop rate in our first season [in 2018], and these numbers aren't dramatically different than what other states are seeing."

Elsewhere, in Isthmus, a regional alt-weekly in Wisconsin, Lisa and Josh (who did not provide the magazine with their last names) reported losing $40,000 on a crop of 70 hemp plants that tested at 0.5-percent THC content. 

“This isn’t just affecting us — it’s a drain on the entire Wisconsin economy. We are a very small operation. The cost statewide must be in the millions,” Lisa told the magazine. “We’re not looking to get people high. If we wanted to grow marijuana, we would be farming in a different state. We want to be hemp farmers and produce a quality CBD product to improve people’s health.”

This year, Wisconsin saw an almost tenfold increase in the number of licensed hemp farmers working in the state. In 2018, the state licensed 135 farmers; in 2019, 1,247. The DATCP reports that “10 to 12” percent of hemp field tests have come back hot so far this year.

What the final ratio will be for the 2019 growing season is still unclear, but the trend is not good.

Morris told Wisconsin Public Radio that time of the essence here. Crops are lost. Investments are lost.

“You think of all the attention and news that farmer suicide is getting. All I can think of is, yeah, I’m advocating for my people’s pocketbooks right now, but I also feel like … I’m trying to prevent a suicide here,” she said. “Because imagine having 40 acres, imagine having half a million dollars of your family’s savings invested in a crop that’s supposed to save your family farm. But because of a completely arbitrary hundredth of a percent, you can have to destroy your crop.”

What testing and regulatory issues are you facing this fall on your farm? Share your harvest stories and lessons learned with us: email esandy@gie.net and tell us more about your farm and the 2019 season—and what you’re doing to prepare for 2020.

Andrey Kukushkin, one of four businessmen indicted last week in a complex campaign finance investigation, is an officer at THC in Sacramento, according to reporting by Theresa Clift, Dale Kasler and Ryan Sabalow at the Sacramento Bee. 

Kukushkin is one of two named permit holders for THC, and he is the CFO of a company called Sharp Source, which, according to the Bee, owns THC. (As far as the business, THC stands for Twelve Hour Care.)

Garib Karapetyan is also named on the THC permit; he holds another seven cannabis retail dispensaries in Sacramento. The city allows a maximum of 30 cannabis retail storefronts.

The Bee points out that there is no overt connection between the funding for Karaptyan’s cannabis businesses and the broader campaign finance scheme detailed in a federal indictment—yet.

Broadly speaking, the investigation has targeted a cohort of foreign-born U.S. businessmen diverting international funds into U.S. political campaigns, including to Nevada politicians who may have been in a position to assist the four indicted men with cannabis business licensing in that state. The web of investigations is closely linked with the ongoing presidential impeachment inquiry in Washington, D.C., including the men’s ties to President Trump’s personal attorney, Rudy Giuliani.

Read the full Sacramento Bee story here.

Now that the campaign finance investigation has reeled in Kukushkin, the network of shared ownership interests in Sacramento’s cannabis market is under a microscope. Sacramento Mayor Darrell Steinberg has called for an investigation into Karapetyan’s consolidation of ownership in Sacramento’s cannabis market—and Kukushkin’s involvement.

“If this story is true, then our cannabis licensing process, which was designed to protect consumers and reward local law-abiding businesses, is being improperly exploited,” spokeswoman Mary Lynne Vellinga said in a public statement. “The mayor is calling for an immediate investigation and will lead an effort to add additional safeguards to the licensing process.”

Two sets of questions are raised here.

One is local: How did Karaptyan come to hold so many of the city’s cannabis dispensaries? And how is the city just now coming to realize the degree of ownership consolidation? What was Kukushkin’s involvement in the Sacramento businesses?

The other set of questions is an international concern: What is the extent of the campaign finance investigation’s inroads into the U.S. cannabis industry? Who else is involved?

Chris Kudialis at Leafly took a stab at the latter, detailing the misadventures of the four businessmen and their attempts at manipulating elections in Nevada to tilt the cannabis licensing process in their favor. Kukushkin, who already had a foothold in the California cannabis industry, played a visible role in this scheme.

According to the unsealed indictment in the Southern District of New York, Kukushkin was actively involved in funneling foreign cash into the 2018 gubernatorial race in Nevada, though he’d admitted to his fellow campaign finance violators that they were “two months too late to the game unless we change the rules,” referring to Nevada’s licensing deadlines last year. The businessmen sought to elect a Republican governor who could then nudge forward legislative amendments to Nevada’s cannabis law. Adam Laxalt, the Republican candidate in question, went on to lose the November 2018 election.

Read the full indictment below. The cannabis information begins at the bottom of page 10.

Along with the four businessmen, an unnamed “Foreign National 1” is listed in the indictment as the benefactor of this cannabis industry campaign finance scheme.

Mother Jones has connected a few dots and put forth an educated guess as to who Foreign National 1 might be—namely, a Russian businessman named Andrey Muraviev, who created a cannabis company in California with none other than Kukushkin and Karapetyan. The three men started a business called Legacy Botanical Company LLC, the license for which has since been suspended by the state of California. Muraviev’s role in the broader campaign finance investigation is as yet unconfirmed.

Nonetheless, after all of that, it’s clear that the campaign finance violations unfolding alongside the impeachment inquiry into Trump’s political dealings in Ukraine have at least some sort of connection to the cannabis industry. As this story develops, we’ll continue to track just how it all fits together.

U.S. v. Parnas et al by sandydocs on Scribd