Friday, May 7, 2021
CapitalPress.com 13
Hemp: ‘It’s sort of an upside-down business model’
Continued from Page 1
to the Oregon Department of
Agriculture.
“There’s a lot of biomass still
out there and growers aren’t get-
ting paid for it,” said Ken Iver-
son, a hemp farmer and processor
in Woodburn, Ore. “The demand
never caught up with the supply.”
The hemp industry overesti-
mated the appetite for cannabidiol,
or CBD, a compound considered to
have anti-inflammatory and other
healthful properties, Iverson said.
Nationwide, farmers planted
more than 500,000 acres of hemp
while only about 20,000 acres were
sufficient to satisfy the CBD mar-
ket, he said. “It’s still way out of
balance.”
A survey of hemp farmers by
Whitney Economics in 2019 found
that 65% didn’t have a buyer for
their crop, while a similar survey
in 2020 determined 54% of proces-
sors also did not, said Beau Whit-
ney, an economist who founded the
firm and studies the industry.
When processors lacked the
funds to extract CBD oil, they
began charging farmers for the ser-
vice rather than convincing prod-
uct manufacturers to invest more
money, he said. “It’s sort of an
upside-down business model.”
Oregon and other states that
jumped into hemp early have pulled
back on acreage, but that didn’t
cause a major national contraction
in 2020 because other states ramped
up their production, Whitney said.
Though the nationwide hemp
industry is likely to decrease acre-
age in 2021, some distressed farm-
ers and processors are trying to sal-
vage their investment by selling
Getty Images
Nationwide, farmers planted more than 500,000 acres of hemp while only about 20,000 acres were sufficient to satisfy the CBD market.
below the cost of production —
resulting in a “race to the bottom”
in prices, he said.
“That’s scaring away people,”
Whitney said.
There’s been a “domino effect”
of plummeting demand through the
hemp supply chain, all the way to
seed production, said Jerry Norton,
an industry consultant in Salem,
Ore.
With the CBD market “flooded,”
buyers aren’t following through on
commitments, he said. “People are
taking the contracts and wiping
their butts with them and throwing
them in the toilet.”
Despite the economic turmoil,
Norton said he’s hopeful that other
uses for hemp — such as livestock
feed and biodegradable plastic —
will firm up the crop’s market over
time.
“There are a lot of other things
we can do,” he said.
By 2030, demand for such hemp
products may spur the crop to 9 mil-
lion acres at the national level, with
only 3% dedicated to CBD pro-
duction, said Whitney, the econo-
mist. Currently, about 82% of the
500,000 hemp acres in the U.S. are
intended for CBD.
The demand for CBD will
strengthen if the U.S. Food and
Drug Administration decides to
allow the compound to be marketed
as a dietary supplement, rather than
strictly a pharmaceutical, said Seth
Crawford, a hemp seed breeder
near Monmouth, Ore.
Unless that happens, the indus-
try will continue operating in a gray
area that discourages investment,
he said. “It’s not good for farmers,
it’s not good for product manufac-
turers, and quite frankly, it’s not
good for consumers.”
In the meantime, growers are
suffering and processors are going
out of business, Crawford said.
“I’m just hoping there’s an industry
left when the ruling is made.”
If hemp products cross the
threshold of 0.3% THC — the
intoxicating compound in mari-
juana — they become illegal fed-
erally, which has complicated
enforcement by the FDA and U.S.
Drug Enforcement Administration,
said Whitney, the economist.
Hesitancy at the federal level has
filtered through to state regulators,
whose strict controls are “suffocat-
ing the market,” he said, adding that
major manufacturers, such as Coca-
Cola, aren’t prepared to invest in an
industry facing such a precarious
outlook.
“The real big money’s sitting on
the sidelines, waiting for the regula-
tory uncertainty to clear up,” Whit-
ney said. “A lot of this would be
cleared up by clearing up the reg-
ulatory uncertainty at the federal
level.”
Chlorpyrifos: ‘The court got it right: EPA’s time is now up’
Continued from Page 1
denied the petition, but last
year proposed modifying
some uses of chlorpyrifos.
Writing
the
court’s
majority opinion, Judge Jed
Rakoff said EPA has failed
to follow the Federal Food,
Drug and Cosmetic Act by
declaring all food uses are
safe. “EPA’s time is now
up,” he wrote.
“The EPA must act based
upon the evidence and must
immediately revoke or mod-
ify chlorpyrifos tolerances,”
he wrote, adding that “EPA’s
egregious delay exposed
a generation of American
children to unsafe levels of
chlorpyrifos.”
Bybee agreed with Rakoff
that EPA has “dithered,” but
said it was wrong to say EPA
has never declared chlorpyr-
ifos safe.
It did in 2006, and the
petition shouldn’t have
forced the EPA to start from
scratch, Bybee stated.
Judge Jacqueline Nguyen
joined in Rakoff’s ruling.
Rakoff is a visiting judge
from the U.S. District Court
for Southern New York
and has participated in ear-
lier 9th circuit hearings on
chlorpyrifos.
“The court got it right:
EPA’s time is now up,”
Earthjustice attorney Patti
Goldman said in a statement.
“However,
chlorpyri-
fos is just one of dozens of
organophosphates used on
our fruits and vegetables. So
while we celebrate this win
today, EPA must also ban all
organophosphates to fully
protect public health,” she
said.
Goldman
represented
environmental and labor
groups that filed the suit
seeking the ban. The suit
alleged the EPA had wrongly
dismissed the petition filed
in 2007.
Farm
groups
have
defended chlorpyrifos as a
safe and an effective pesti-
cide that has been used for
more than 40 years.
The scientific case against
chlorpyrifos includes studies
involving mice and pregnant
women who were exposed
to chlorpyrifos in residential
settings. Most home uses of
the pesticide have already
been banned.
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