Georgia Hemp Production on Hold

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By Clint Thompson

Georgia farmers looking to grow hemp can’t do so without the state legislature first authorizing $800,000 to the Georgia Department of Agriculture (GDA) to oversee hemp production.

In response to a hemp production plan submitted by the GDA, the U.S. Department of Agriculture (USDA) required that the Georgia Legislature appropriate funds for oversight, according to University of Georgia Cooperative Extension ag economist Adam Rabinowitz. Until funds are allocated, it is not possible for the USDA to approve the plan.

“That means that under the current law, producers would not be able to apply for a license to produce hemp in Georgia and not be able to grow any hemp legally,” Rabinowitz said. “There is potentially an opportunity, depending on how that plays out; we’ll have to see. But maybe the USDA licensing process — a federal plan — might be an option … But certainly, a Georgia state plan would be the way to go and what we’re expecting at this point.

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“The Georgia Legislature is going to have to act in the next few weeks to appropriate those funds, or I think the Georgia Department of Agriculture might need to start looking at what would be the options for producers just to go straight to the USDA for a federal license.”

Even if growers can produce hemp this year, there’s no guarantee it will lead to a profitable return on investment.

Tim Coolong, associate professor in the UGA College of Agricultural and Environmental Sciences, said he’s received substantial interest, not only from Georgia farmers but also from people who own 10 or 15 acres that want to capitalize on this opportunity. With so much interest, not only in Georgia but across the country, Coolong and Rabinowitz are concerned that once hemp production begins in Georgia, the market will saturate even more than it already has.

“The big hype has been this production of hemp for CBD oil, and that’s where all the promises have been made on very large per-acre returns and high prices. What we have seen over the past year is a lot of volatility in those prices. Primarily, the prices have plummeted,” Rabinowitz said. “They’re typically priced at a percent of CBD oil. We’ve seen those drop from $4 to under $1 at this point. We anticipate that market is going to continue in that direction, mainly because in other states we know that processors have been unable to handle the supply that’s been out there in terms of what growers are actually producing.”

According to a UGA analysis on production budgets and variations in yield, percent of CBD and price, Rabinowitz noted that 15 to 18 percent of the time, farmers can lose money planting hemp. That scenario also doesn’t account for when THC levels are at an unacceptable level. When hemp contains more than 0.3 percent THC, the crop must be destroyed. THC levels must be tested within 15 days of anticipated harvest.

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