198 Farmers Applied for Licenses in Ohio’s First Year of Hemp Industry
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198 Farmers Applied for Licenses in Ohio’s First Year of Hemp Industry

The number was lower than expected, but several unique characteristics in the state offer great promise.

May 8, 2020

The Ohio Department of Agriculture received 198 applications for hemp production licenses for the 2020 growing season, the state’s first shot at a legal hemp market. It may be a lower number than industry stakeholders expected, but certain elements of the Ohio climate and the regulatory landscape may offer great promise.

Craig Schluttenhofer, research assistant professor at Central State University in Xenia, Ohio, says that the state’s glaciated soils will be nice for the crop. At the eastern edge of the Corn Belt, great swaths of Ohio’s landscape will be terrific for hemp. There are wet regions in the state, but, by and large, the long growing season should prove beneficial to the hemp crop.

“We do have a good amount of seasonal moisture, but at the same time it’s not an excess during the natural growing season,” he says.

Notably, Ohio will be operating under the federal guidance of the 2018 Farm Bill. Many states—including major players in the industry, like Kentucky, Oregon and Colorado—are continuing this year to work under 2014 Farm Bill pilot program auspices. The differences between those states’ pilot program oversight measures and the 2018 Farm Bill can be vast. This may give Ohio farmers a leg up on the competition, Schluttenhofer says.

Next year, before the 2021 growing season really gets under way, those other states will need to get in line with the 2018 Farm Bill. Schulettenhofer says that this first year may give Ohio an advantage; the switch to the new regulations will be a complex adjustment.

“All of those programs now have to re-educate their growers and re-adjust to how they’re doing things,” Schluttenhofer says. This adjustment involves “hot” crop testing (for THC content) and other processing issues.

With a bit of a regulatory advantage and a sort of cautious trial run in the works for 2020, Schluttenhofer says that the market will continue to dictate what Ohio growers do this year. He says that ongoing economics issues (oversupply in the CBD extraction market, mostly) may have kept the applications number low, but there’s great promise on the hemp grain and hemp fiber production side of the business. It’s just that the market infrastructure isn’t really available yet.

“We don’t want growers getting into something where they’re going to lose money,” he says. He advises anyone with a license this year to start small and make sure that they’ve got the necessary storage space for drying and the necessary contracts in place for processing. Right now, processing on the grain and fiber segments of the industry is few and far between. Most prospective hemp growers in Ohio seem to be poised for CBD extraction, Schluttenhofer says, but the supply curves in that market segment are tricky. But once consumer demand triggers developments in processing infrastructure, Schluttenhofer believes that opportunities will be plentiful.

It’s important to consider the different needs of crops grown for those different end markets: grain, fiber, cannabinoid extraction. Harvest time is critical, where there’s a fine balance between being too early and too late in harvesting for grain (or between being “hot” or not in CBD extraction compliance).

For the fiber segment, the genetics alone are difficult to source. Schluttenhofer says that good fiber genetics largely went extinct. What was grown in Kentucky decades ago is not available to modern hemp growers. “We have to re-develop all that,” he says. That in itself is looking like a promising trajectory in Ohio.

“In the long run, a lot of us think that fiber is going to the be the major crop, in terms of number of acres produced,” Schluttenhofer says.