An often overlooked component of the ballot initiative to legalize recreational marijuana in Michigan would create a commercial market for pot’s more utilitarian relative: hemp.
Such a prospect comes as a welcome opportunity for the state’s agriculture industry as well as researchers who say efforts to take advantage of industrial hemp have been unnecessarily stymied because of outdated federal laws.
Hemp is a variety of cannabis with trace amounts of THC (delta-9 tetrahydrocannabinol) below 0.3 percent. THC produces the “high” associated with marijuana. Hemp seeds and stalks are processed for a variety of commercial products that are imported into the state, including foods and clothing.
Like marijuana, hemp also is classified as a Schedule 1 controlled substance by the U.S. government, which creates a complex web of laws around the plant and non-psychoactive products that are derived from it.
In November, Michigan voters will have the chance to allow industrial hemp for commercial purposes. Not only could it accelerate researchers’ understanding of how the crop grows in Michigan, but agricultural leaders also see opportunity for the state’s farmers amid depressed commodity prices.
The Michigan Farm Bureau — which opposes adult-use recreational marijuana — officially supports industrial hemp as a policy platform.
“There are a lot of hopeful individuals in the countryside of Michigan who are hopeful (hemp) might have a higher return on investment compared to other commodities,” said Kate Thiel, field crops specialist with the Michigan Farm Bureau. “There is immense interest if it were legalized. But their hands are sort of tied from the legality standpoint at this juncture.”
Industrial hemp could provide farmers an alternative to commodities like corn, soy or wheat — a chance for farmers to “diversify their portfolio,” Thiel said. It also would come as Michigan follows national trends of declining farm income, which has dropped 52 percent nationally since 2013, according to the U.S. Department of Agriculture.
“I’d say our farmers always want to be on the cutting edge of technology,” Thiel said. “If this is another opportunity to continue what they love doing, certainly we’ll want to look at that.”
WAITING TO RESEARCH
The 2014 Federal Agricultural Act, known as the Farm Bill, legalized industrial hemp growing for research purposes in states that allowed it. In January 2015, Michigan’s Industrial Hemp Research Act was signed into law, allowing the state’s colleges and universities to pursue industrial hemp research.
In Michigan and elsewhere, agronomists are in the beginning stages of learning the basics of hemp’s attributes in certain regions. The American Farm Bureau Federation reports more than 30 states have approved hemp research, “but its full-fledged production and commercialization is extremely hindered by its current designation as a Schedule 1 controlled substance.”
While the Michigan Department of Agricultural and Rural Affairs (MDARD) has not received any requests for a site permit, researchers at Michigan State University have been pursuing a project that has been held up with the U.S. Drug Enforcement Agency since 2016, said Kurt Thelen, MSU professor of BioEnergy Cropping Systems.
“It’s just caught in the bureaucracy, I guess,” Thelen said. “It’s a source of frustration for us.”
Thelen first applied for a DEA “Controlled Substances Registration Certificate” to obtain hemp seeds in January 2016.
“Because industrial hemp seed cannot be distinguished from other Cannabis seed morphologically or chemically, care should be taken to ensure with the highest possible degree of certainty that procured seeds are, in fact, industrial hemp,” MDARD wrote in 2016. “The procurement of seed from uncertified, obscure, or feral sources that results in the growth of plants with a THC content greater than 0.3% by dry weight will place the researcher, college or university, and/or property owner in violation of state and federal law.”
Thelen said DEA, state and Michigan State University Police officials have visited a potential growing site.
“We really can’t get the seed here legally,” Thelen said. “And the consequences are a lot higher for the university. If you violate federal laws, you could lose federal funding across the board. You just don’t take chances with that at the university.”
A spokesperson for the DEA did not respond to a request for comment at the time this report went to press.
Thelen envisions a roughly 1-acre plot to start, which could be scaled up in the future. The team would start with “fundamental agronomic research,” he said, understanding how the crop would grow in Michigan’s climate.
Even if the ballot initiative passes, Thelen said MSU would still need a DEA permit as long as hemp is a Schedule 1 controlled substance. In April, U.S. Senate Majority Leader Mitch McConnell and U.S. Rep. James Comer, also a Kentucky Republican, introduced legislation to legalize commercial hemp and remove such a restriction.
“It really doesn’t belong as a Schedule 1,” Thelen said. “The problem, from the law enforcement side, is you can’t tell by looking at a plant whether it’s industrial hemp or marijuana.”
Kentucky overall has been more aggressive than states like Michigan in developing the industry, said David Williams at the University of Kentucky’s Department of Plant and Soil Sciences. Williams is helping lead the university’s industrial hemp research, which also is looking at basic features of the crop.
“The big difference between Kentucky and Michigan is our Department of Agriculture wholly administers the research program,”
Williams said. “Individuals or entities like (the University of Kentucky) are participants in the pilot project, so we’re not responsible for importing our own seeds. That whole process is rather onerous.”
Williams said Louisville also has the largest hemp processing facility in the U.S., which contracts with nearby farmers for product.
“It’s going very, very well indeed,” Williams said.
UNCERTAINTY AND MARKET POTENTIAL
In May, the Michigan Department of Licensing and Regulatory Affairs (LARA) issued an advisory on industrial hemp and CBD (cannabidiol) products. The two are closely linked as beneficial products from cannabis that don’t involve psychoactive properties.
CBD is a chemical that can be extracted from both hemp and marijuana plants. Under a medical marijuana regulatory framework passed by the Legislature in 2016, LARA clarified that CBD falls within the definition of marijuana and therefore falls within that structure — including the need to be sold from licensed provisioning centers.
This has created confusion for stores that sell CBD products but not medical marijuana. Last month, CBD products were for sale at the Meijer-owned Fresh Thyme Farmers Market in Grand Rapids. The Grassy Knoll in Grand Rapids’ Eastown neighborhood remains open despite receiving a cease-and-desist letter from the state in March. The Grassy Knoll does not sell medical marijuana products.
Grassy Knoll Managing Director Janet Tombre declined to comment for this story, citing advice from the store’s attorney. Tombre said the store will remain open for now.
Travis Copenhaver, an attorney with the Royal Oak-based Cannabis Legal Group, said that since CBD products are generally produced from cannabis plants containing THC, they fall under regulation of the state’s Medical Marijuana Facilities Licensing Act of 2016. Because of the complexity of what’s considered a controlled substance at the federal level, there hasn’t been much oversight in Michigan of imported CBD products.
Due to these complex federal regulations, it’s difficult to predict hemp’s market potential in Michigan. The Congressional Research Service says hemp imports into the U.S., mostly from Canada and China, are valued at about $600 million annually.
The Coalition to Regulate Marijuana Like Alcohol, which is leading the Michigan legalization initiative, believes hemp is a “huge agricultural opportunity for Michigan,” said spokesperson Josh Hovey.
“Its uses from fibers to building materials to food products are so multiple there’s a really significant economic impact,” Hovey said. “It’s something that really never should have been illegal to grow in Michigan in the first place.
Hovey said the coalition hopes to “make the rounds” with Michigan farmers to educate them about industrial hemp’s opportunities.
Michigan State University Extension specialists reported this month: “If markets develop to expand the use of hemp products, Michigan farmers may find it to be an economically competitive crop that could play a role in further diversifying crop rotations. However, they will need research-based information on how to grow the crop under our soil and climatic conditions.”
Thelen predicted industrial hemp — if approved — would be a “smaller niche crop. I don’t see it being a large commodity crop like some people are predicting.”
Copenhaver, though, said industrial hemp’s market potential in Michigan could be huge if the ballot initiative passes in November.
“I think it’s probably bigger than adult (marijuana) use,” Copenhaver said. “The types of products you can create are immeasurable. And we have a strong agricultural background in Michigan. This is a new application for people in that sector to potentially utilize.”
MiBiz food and agriculture news coverage is supported by Dan Vos Construction. For more information, visit danvosconstruction.com