Published November 4th, 2021 at 7:26 AM
A few years ago, Michelle Poindexter heard about CBD, its medicinal benefits, and that it would soon be legal to grow in Missouri. She was looking for a career change at the time and decided to pitch the idea to her family.
Her two brothers were on board right away. The trio nervously approached their parents, lifetime corn and soybean farmers, with the idea of growing hemp on the farm. To their surprise, their parents immediately agreed.
“My parents and grandparents, that’s all they’ve done their whole lives, is farm,” Poindexter said. “They obviously had enough knowledge about (hemp) that they were OK with it.”
Now the Poindexters grow 10 acres of organic hemp in Drexel, Missouri, from which they process and sell CBD products as Rural Route Hemp Co.
“We farm it, we extract it, we bottle it,” Rural Route Hemp product packaging declares.
The Poindexter family may have carved a new path in the fledgling modern-day Missouri hemp industry, but the crop itself is far from new.
Since the production of industrial hemp was legalized at the end of 2018 in the federal Farm Bill, hemp has been treated as a new crop. Producers undertake paperwork-heavy licensing, gamble on seed genetics, craft their own harvesting equipment and take their products to an under-developed market.
The fields of Kansas and Missouri, however, are no stranger to hemp. Both states grew and processed the plant from the 1800s until alternatives replaced the fiber in the early 1900s. They still have the wild “ditch weed” to prove it.
In its heyday, hemp was largely used for fiber. Its strength made it perfect for rope and heavy duty canvas (the word itself derives from cannabis). Naval ships floated the hemp industry, purchasing canvas for sails and plenty of rope.
Hemp rope was also used to bag and bale cotton for export. Missouri farmers relied on relationships with southern cotton producers to buy the fiber.
Missouri was, at one point, the second largest producer of hemp in the nation. According to the University of Missouri Extension, nearby Lafayette, Platte and Saline counties produced between 1,500 and 4,000 tons of hemp (per county) in 1860.
The commodity was so common in this area that Confederates found victory in the famous Civil War Battle of Lexington, Missouri, in part by taking shelter behind watered-down bales of hemp. The strong, drenched fibers shielded soldiers from cannon and rifle fire until the battle eventually finished in hand-to-hand combat.
Traditional methods of hemp processing involved beating the plant to break down its strong core and fibers until it could be stripped and rolled into rope. Eventually, machinery took the place of the manual work, but the processing still required a lot of labor and was typically done by enslaved persons, prior to the Civil War.
Trade relations with the South were disrupted by the war and, with the turn of the century, steam powered ships rose to popularity. The navy was no longer hemp’s biggest buyer.
Cotton and jute (imported from Asia) became cheaper and required less labor to produce. Ultimately, hemp was dethroned.
Without a steady market, the crop never saw the same prominence it once held, and soon natural fibers would be replaced with stronger, petroleum-based synthetic materials.
It briefly returned to prominence during World War II, but shrank back once international trade resumed.
Then, in 1970, the Controlled Substances Act ruled all cannabis illegal to produce. This was done in an effort to stop marajuana growth and usage, but targeted the low-THC hemp as well.
Industrial hemp was banned until 2014, when the Farm Bill once again permitted production of the crop under research limitations. This would serve as a pilot program to the 2018 Farm Bill, which legalized the commercial production of industrial hemp across the nation.
In the fledgling industry, flexibility has been essential to the Poindexters’ success.
When the 2018 Farm Bill passed the Poindexter family got busy getting everything in order to apply for a license. When Missouri didn’t get its program operating in time for the 2019 growing season, the Poindexters shifted gears and leased acreage across the state line, in Kansas, to start farming.
At this time in 2019, the Kansas program was operating under the research guidelines under the 2014 Farm Bill. Poindexter said the paperwork to get enrolled was strenuous.
Prospective producers had to submit a research plan. Each person working on the farm had to pass a criminal background check. They also had to pay a $1,200 licensing fee.
They jumped through all the hoops and ended up having a pretty successful first harvest.
“We learned so much from that first year,” Poindexter said.
In 2020, Missouri started its hemp program and the Poindexters were able to farm on their family land.
The Missouri program operates on a commercial basis in compliance with the 2018 Farm Bill. The Kansas program transitioned to a commercial basis this year.
Under the new program, the application process is much smoother. Poindexter said only growers and processors have to undergo a background check.
But the difficulties of the industry don’t stop at paperwork. Perhaps the biggest stressor for farmers is the before-harvest THC compliance testing.
Come harvest time, all hemp farmers have their crop sampled and taken for testing. If the crop comes back with more than 0.3% THC concentration, the state can order the crop to be destroyed.
Under the first program, if the tests came back under the legal limit, farmers had 15 days to harvest everything. This was a short window when harvesting by hand as the Poindexters do.
The first two years were pretty nerve wracking. Now in the third year, Poindexter said she knows what to expect and how to keep the concentration from getting too high.
“We’ll just start doing weekly testing to see how close we are to getting to that top 0.3% so that we don’t go over it,” Poindexter said.
Under the new regulations and the Final Rule (passed in January of this year) producers have 30 days after testing to harvest everything, and have options to remediate a crop if it tests “hot” (too high in THC).
Braden Hoch, industrial hemp supervisor for Kansas Department of Agriculture, said in 2020, before Kansas was operating under these rules, about 20% of the producers had to terminate part of their crops because they tested over 0.3% THC.
Thankfully, with the new remediation efforts, farmers have options outside of terminating the crop. A fiber producer can have the material retested from the stem, where the fiber is extracted, rather than testing the leaves. A CBD farm can blend its material together and have it retested to prove the THC level will be within the legal limits in the final product, or they can sell the plant for fiber.
“(Kansas) will maintain those regulations as long as they’re permitted by federal rule of law,” Hoch said. “But it’s definitely provided some individuals a little bit more flexibility regarding options if they do have a hot crop rather than dispose of it.”
Both Kansas and Missouri work to ensure the state programs comply with limits imposed by federal law. In the case of industrial hemp, the control is from the top rather than the state level.
Funding has been another big challenge for hemp producers.
The Poindexters were able to self finance their hemp enterprise. Luke Poindexter (Michelle’s brother) said today it remains difficult to get a loan for a hemp business, and it definitely wasn’t a possibility when they started the business.
Even opening a bank account for the business has proven to be challenging for the Poindexters and other hemp growers.
Originally, their account was at a large chain bank, but one day the bank sent them notice that it was closing the account. It didn’t give specifics, but noted a reluctance to work with the hemp industry.
Thankfully, a smaller, local bank has kept the business account, but it won’t do much aside from hold their money.
“Banking is still difficult now,” Luke Poindexter said. “Banking is difficult, credit card processing is difficult (and) loans are almost impossible, unless it’s on the open market, just capital investments.”
Crop and business insurance is also a challenge in the hemp industry. Luke Poindexter said the family was able to get insurance, but it’s not worth much.
“The (crop) insurance isn’t great right this second,” he said. “But it’s a brand new product for the crop insurance companies … So, they’re still learning and still figuring out yields.”
The lack of funding or financial support goes back to a lack of education. Financiers are wary of giving loans or insuring a hemp business because they don’t understand the legalities of the industry.
This is something Erica Stark, the executive director of the National Hemp Association, is working to improve.
“The inner workings of the inner agencies aren’t always on the same page in understanding what’s legal and what’s not legal,” Stark said.
As if the lack of investors and the potential threat of terminating the crop at the end of the season didn’t make this industry risky enough, hemp farmers also gamble a bit when selecting seeds.
Michelle Poindexter said her family finally found a good seed distributor with consistent genetics, but it took them a couple of tries.
Seed genetics are important to industrial hemp for several reasons. First off, the strains of cannabis sativa for fiber and for cannabinoids are different. Secondly, the seeds need to have low-THC genes.
Lastly, and most importantly for the Poindexters, hemp grown for CBD needs to be feminized.
Cannabinoids are developed in the female cannabis flowers. As soon as a flower is pollinated by a male plant, it stops directing energy to cannabinoid production and instead starts producing a seed.
In order to get a decent amount of CBD extracted from the plants, hemp farmers of this type need to ensure there are no male plants mixed in. Michelle Poindexter said this means walking the fields daily to cut away any stray males, and also buying feminized seed.
Just north of the Poindexter operation, United American Hemp CEO James DeWitt sells hemp seed and cuttings, for CBD extraction, to farms across the country.
DeWitt also self-funded his business. That’s why he didn’t want to take the financial risk of entering the crowded CBD product market, so he focused on seed.
From his indoor facilities, DeWitt is able to grow, research and feminize hemp seeds in a controlled environment.
It’s crucial that his operation is in a closed environment. The wind could easily blow in pollen from a hemp field several miles away and ruin his feminized plants, and the genetics of the seeds he sells.
DeWitt had a successful first year in 2019. But just as farmers were preparing to plant in 2020, the COVID-19 pandemic became more serious. DeWitt said a lot of the farms had all of the permits and licenses, but decided not to plant, nor to buy seeds from him, because they were afraid of the market turning south.
This year, it hasn’t been much better.
United American Hemp has continued to sell seeds, but it hasn’t put much effort into producing new plants.
“It doesn’t take a lot of plants to produce a lot of seeds,” DeWitt said. “Without the demand there’s no reason to pay the cost for propane in the greenhouse to keep us heated all throughout the winter and things like that. So we kind of have dialed back.”
If he needs to, he could be back up to full production in a couple of months. But for now, the market isn’t calling.
What DeWitt saw in his business is a nationwide trend. A lot of hemp producers who went into it early on have dropped out.
U.S. hemp acreage plunged from 140,000 in 2020 to just 35,000 in 2021, according to Hoch with the Kansas Department of Agriculture. In Kansas, he said, the number of registered hemp producers declined from about 200 in 2019 and 2020 to just 81 in 2021. Of those, only about 70% are actually producing.
Missouri saw similar numbers with registered producers.
Stark, with the National Hemp Association, works to promote and educate key players about hemp. From her perspective, farmers dropped out because the market was flooded with CBD extractions and prices plummeted. On the fiber side, growers couldn’t find processors, so the bridge from farmer to manufacturer wasn’t there to support the industry.
“That intermediary piece of the supply chain, which is the decortication facilities (used to process hemp), are not developed on a commercial scale in order to create a complete supply chain,” Stark said.
And while Missouri had fewer hemp producers, its total acreage of hemp went up from 800 acres in 2020 to about 1,200 acres in 2021. The extra acreage came from hemp fiber farms joining the fold.
According to Stark and other hemp activists, fiber is where the future of hemp lies.
While the United States has been put on hold for several years compared to the rest of the world, Stark said we aren’t too far behind. On the CBD side, it’s neck and neck. Fiber and grain is a little behind Canada and European countries that never ceased production, but she said the U.S. can quickly catch up.
“There’s plenty of room here for us to get up to speed and dominate this industry,” Stark said. “But we’re still, on the fiber and green side, lacking a lot of the infrastructure we need to make that viable.”
Next: “Highway to Hemp” returns next month to look at all things hemp fiber and hemp processing.
Cami Koons covers rural affairs for Kansas City PBS in cooperation with Report for America. The work of our Report for America corps members is made possible, in part, through the generous support of the Ewing Marion Kauffman Foundation.