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The next super weed: Horticultural opportunities and challenges in the emerging cannabis industry

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This article comes from the NOFA/Massachusetts 2017 July Issue Newsletter

By Dan Bensonoff

Forget tomatoes and microgreens. Cannabis is about to enter the Massachusetts marketplace, and according to some estimates it’s poised to become a $1.1 billion industry within just a few years. That would mean cannabis alone would exceed the entire total market value of all Massachusetts agricultural products (which comes in at just shy of $500 million).

With so much money on the line, it’s no surprise that there is widespread disagreement on how the ballot questions should be amended or interpreted. Some issues being considered by the legislature – most notably the rate of cannabis taxation, driving under the influence, and local control – have received plenty of attention. But given that this is a plant we’re talking about, and one that commands a colossal price tag at market, it’s worth exploring what opportunities farmers may find this in the emerging recreational cannabis and hemp markets.

Ballot Question and Aftermath

If you’re like the majority of voters, you probably didn’t read the fine print of the cannabis ballot question that we, the citizens, approved back in November 2016. If you did, you may have noticed that it was equivocal about by whom and how this plant should be cultivated. While the original bill didn’t outright prohibit farmers from entering the cannabis market, it did set up some strong barriers to entry: the cost of a marijuana cultivation license was set at a maximum of $15,000, with no scale-appropriate exceptions. On top of that, the law also stipulated that cultivators would need to install significant security features such as “lighting, video and alarm”as well as securing any storage and transportation of cannabis. If a farmer wanted to grow in a field or greenhouse, they would have to install perimeter fencing and ensure that their cannabis plants aren’t visible from public places.

The original law also gave first priority of cultivation licenses to medical marijuana establishments, an industry that does not allow outdoor or greenhouse growing operations whatsoever. Essentially, that meant that farmers and gardeners who aren’t already growing medical cannabis would have to wait at least two years to enter a lottery for a cultivation license.

And yet, there were a few bright spots in the bill for the burgeoning organic cannabis farmer. The law contained a section that clearly states that outdoor and greenhouse production would be acceptable within certain parameters. Although much of the industry may continue to be ruled by indoor production, there is also likely to be a sizable niche market for “natural sun-grown cannabis” among certain aficionados and customers who prefer their pot to be carbon smart.

There was also one short section that voters barely picked up on: a few lines that give the state authority to promulgate a hemp program. Hemp, while technically the same species as its psychoactive sister (Cannabis sativa), cannot get one “high”; instead, it’s used for just about everything else: medicine, edible seeds, fiber, drywall, and biofuel, to name just a few. Hemp had been illegal until a small but meaningful change in the last farm bill that allowed states to create and pilot hemp programs. More than 30 states have taken some sort of positive legislative action since then, with some states like California and Colorado actively helping farmers grow and scale, but Massachusetts had yet to do so, until last November.

Weeding Through The Mess

Not surprisingly, Massachusetts legislators were not at all pleased with the bill the voters enacted. Representative Mark Cusack, who was in charge of writing the House version of the marijuana bill, called the original bill “deeply flawed”. Since November, Cusack and his senate counterpart, Patricia Jehlen, have been busy coming up with a reworking of the bill.

As of this writing, both the senate and house have passed their own versions. The two versions ended up differing on some key policies. However both versions offered hope for farmers.

On Tax Rates, Two Roads Diverge

The senate chose to keep the tax rate the same as the original bill at 12%, whereas the House voted to raise the rate to a whopping 28%. Critics argue that the high tax rate could leave the black market thriving.

Drug War’s Front Lines Get Notice

Statistics don’t lie: some communities (specifically black and Latino communities) have been more ravaged by marijuana criminalization than others. Many are concerned that those same communities might now be left out of the regulated marijuana industry.

Fortunately, both versions of the bill seek to address this history by ensuring the new industry is diverse and encouraging of disproportionately impacted communities. The senate version goes much further and expunges all prior marijuana convictions.     

More Voice For Agriculture

Both versions added in some helpful sections to ensure farmer representation in setting regulations. The House added an amendment that mandates the Cannabis Control Commission (CCC) develop recommendations “to ensure farmers’ access to cannabis licenses and to allow for the growth, cultivation, production and harvest of marijuana on farm or agricultural lands.” Similarly the senate tasks the CCC to “promote and encourage full participation in the regulated marijuana industry by farmers and businesses of all sizes”.

Craft Cannabis? Yes, Really

Drying CannibusIn order to encourage said participation by small farmers, both the Senate and House added in a special provision for “craft marijuana cultivator cooperatives”. Basically, this provision will allow small-scale growers to band together in order to grow, sell, or process small batches of cannabis, all under a single license. Given how spectacularly popular craft beer is in New England, it may well be that sample flights of “craft cannabis” may be heading to a budtender near you.

The senate version also removes the $15,000 annual license fee barrier. Instead, the CCC will have to create a sliding scale license fee “commensurate with cultivation size as measured by volume”.

A Hemp Law Takes Shape

One of the most interesting developments from this process is the creation of a hemp pilot project for both research and commercial uses. Like its sister plant, industrial hemp will require a license in order to be grown, but the process of doing so will be different, and not necessarily simple.

Growers like Linda Noel, a tomato grower and board member of The Massachusetts Cannabis Reform Coalition (MassCann), have been eagerly awaiting an opportunity to grow hemp. In Noel’s case, she hopes to grow hemp for its medicinal CBDs, which can be used to treat a variety of ailments including epilepsy.

Since industrial hemp is still technically a controlled substance in the federal government, there’s still a lot of gray area that will need to be worked out. Sourcing seed has been a major issue for some states that have legalized hemp. Seed is controlled by the U.S. DEA, making it challenging to import. Because hemp has been out of cultivation in the U.S. for so long, there are also few strains that are dependable and well-trialed, which adds another layer of uncertainty. On top of all that, if by accident, your hemp plants contain more than .3% THC (the active ingredient in psychoactive cannabis) you can lose your crop and license to grow.

Nonetheless, there’s a sense among some hemp proponents that this nascent industry has potential. Thomas Dermody of the Industrial Hemp Research Foundation believes that, for now, the medicinal market may be best suited for small to medium scale growers. Eventually, though, Thomas sees more potential in growing hemp for food and fiber, but not until seeds are stabilized and investments are made in processing plants.

Much remains uncertain in how and who gets to participate in this modern gold rush. Even with the refinished law, farmers and horticulturalists will have to insist on their rights to do what they do best: harvest the genius of photosynthesis.

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