BUSINESS NEWS
16 • MARCH 2022
COAST RIVER BUSINESS JOURNAL
Possible hemp restrictions raise concerns on industry
By MATEUSZ PERKOWSKI
Capital Press
Oregon counties may suspend new hemp produc-
tion under a bill recently passed by the Legislature,
raising concerns in the industry about farmers missing
economic opportunities.
Under Senate Bill 1564, which now awaits the sig-
nature of Gov. Kate Brown, county governments can
declare an emergency to stop the issuance of new state
hemp licenses for two years.
Hemp production in Oregon has already fallen pre-
cipitously due to an oversupply, but county restrictions
could hinder an industry resurgence at a time when
new uses for the crop are multiplying, experts say.
<The negative impact is it sends a message to the
rest of the country that Oregon is not where you want
to do hemp,= said Beau Whitney, an economist who
tracks the industry. <It puts the state farther and far-
ther behind.=
Excitement about the high demand and health-
ful efects of cannabidiol, or CBD, caused a surge in
hemp production that was soon followed by a surplus,
prompting many farmers to abandon or reduce culti-
vation of the crop.
Acreage across the U.S. dropped by more than
50% last year, while Oregon9s acreage plummeted
more than 80%, according to Whitney.
At the same time, Oregon law enforcement author-
ities have complained to state lawmakers that hemp is
being used to disguise the illegal production of mar-
ijuana, a related cannabis crop with psychoactive
properties.
<When you can9t regulate an industry, it makes
no sense to add more work for our regulatory agen-
cies,= testioed Nathan Sickler, Jackson County9s sher-
if, during a legislative hearing last month.
The original language of SB 1564 would have
imposed a two-year moratorium on new hemp
licenses, but the bill was amended so that the decision
was left to counties.
The idea was to provide local control since the
problem with sham hemp farms was mostly reported
in Jackson and Josephine counties.
However, the amount of licensed hemp grown in
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Hemp is harvested from an Oregon field.
hoop house systems common for marijuana represents
less than 2% of state acreage, Whitney said.
<The data does not support the narrative at all,=
he said, referring to licensed hemp growers allegedly
producing black market marijuana. <Will this really do
any good? Probably not.=
Whitney said it9s commendable that lawmakers
scaled back the bill9s scope in response to hemp indus-
try concerns, but he fears the bill still sends the wrong
signal.
Hemp is seeing new demand in products that have
nothing to with CBD, including bioplastics and live-
stock feed, he said. The crop can even by used as an
alternative to lithium in batteries.
Meanwhile, carbon credits 4 which are sold to
ofset emissions 4 are poised to become a new reve-
nue source for hemp farmers, he said.
<This regulatory uncertainty is impacting the ober
and grain side,= Whitney said. <It9s suppressing the
growth and development. At the time Oregon should
be supporting hemp on an industrial scale, it9s trying to
put restrictions on hemp.=
Mark Taylor, founder of the Southern Oregon
ACREAGE ACROSS THE U.S. DROPPED
BY MORE THAN 50% LAST YEAR, WHILE
OREGON’S ACREAGE PLUMMETED MORE THAN
80%, ACCORDING TO BEAU WHITNEY, AN
ECONOMIST WHO TRACKS THE INDUSTRY.
Hemp Cooperative, said the bill could punish grow-
ers who wisely decided to stop growing hemp tempo-
rarily due to the oversupply or for crop rotation. It also
blocks legitimate newcomers with fresh ideas from the
industry.
<They9re penalizing us for their lack of pre-plan-
ning,= Taylor said of state lawmakers. <You restrict
brainpower that could come in and do it better.=
Oregon hemp farmers have drastically scaled back
planting in response to market conditions, which isn9t
recognized by lawmakers who don9t understand the
industry, Taylor said.
<The market self-adjusted and they gave no due to
that whatsoever,= he said.
The state government would have been more
efective with outreach and education to the hemp
industry and other farmers, warning them to keep an
eye out for bad actors who9d attempt illicit marijuana
production, Taylor said.
<I don9t think government spends enough time on
the ground,= he said. <They9re in their ivory tower.=
County restrictions would diminish the industry9s
competitive spirit and amount to the government pick-
ing winners and losers by allowing existing growers to
keep their licenses, Taylor said. <It all speaks of gov-
ernment overreach.=