How CBD crashed Montana’s hemp financial system and the wrestle to get it again

For people who are convinced of its therapeutic properties, cannabidiol (CBD) is nothing short of a miracle drug. Proponents of CBD – which is extracted from the flower of the cannabis plant – assert variously that it is a safe and effective treatment for chronic pain, diabetes, anxiety, multiple sclerosis, high blood pressure, Parkinson’s, arthritis, schizophrenia, acne and cancer.

However, few of these claims have undergone rigorous clinical testing. Most rely on small studies, anecdotal evidence, and personal testimony. To date, the U.S. Food and Drug Administration (FDA) has only approved CBD for one prescription drug, Epidiolex, used to treat rare forms of epilepsy and a genetic condition that causes non-cancerous tumors to grow in the brain. The government also warns that CBD can cause liver damage and has been linked to decreased male fertility.

“The FDA is concerned that people are mistakenly believing that there is ‘no harm’ in using CBD,” the government warned in an informative press release. “We have seen limited data on the safety of CBD, and that data indicates real risks that need to be considered. Consumer use of CBD products should always be discussed with a healthcare provider. “

While the healing value of CBD remains unclear, one thing can be said with certainty: during the initial rush to capitalize on the booming CBD markets, CBD processors outside of the state came to Montana with big promises to make the big buck, that can be earned by growing hemp.

The selling points came when Montana agriculture was just hitting some of the lowest wheat and barley prices in a generation and grain farmers were eager to explore alternative crops to increase their profits.

“In 2019, commodity prices were very, very difficult for farmers,” recalls Andy Gray, coordinator of the Montana hemp program. “They had wheat for $ 4 a bushel, corn was very low, so all these farmers were looking for an alternative to the crops we’ve grown here for generations. They listened to some people who were basically trying to sell them snake oil. ” , said this hemp can make $ 20,000 an acre. It was like that perfect storm in 2019 when people heard about other farmers who were really well grown hemp and a few people who were not from the agricultural industry and things weren’t going very well. “

Hemp production in Montana was launched as a pilot program in 2017. This year, 22 growers were licensed to grow around 5,000 hectares across the state. After the 2018 Farm Bill expanded the legalization of hemp, the harvest increased. According to statistics from the Montana Department of Agriculture, 277 growers were allowed to grow hemp in 2019, with total plantings across the state spanning approximately 51,000 acres.

However, the promises of great rewards for the Montana hemp crops have never been fulfilled.

“These guys came and said this is the way to grow hemp,” recalled Andrew Bishop, co-founder of Ag Processing Solutions, an agricultural engineering and consulting firm headquartered in Vaughn, “but they had no real farming experience in Montana. Maybe they came from Kentucky and said, ‘That’s how we do it in Kentucky, so just do it the same way.’ “

“They let all of their farmers grow CBD hemp strains,” Bishop continued. “That failed absolutely miserably in Montana … and then they just disappeared and they never paid. It was really terrible what they did to the farmers. “

Montana courts agreed.

Last June, a Wolf Point jury delivered the second-largest civil verdict in Montana history to 25 Eastern Montana farmers who were defrauded by CBD processors Vitality Natural Health and Eureka 93. The jury found the two Canadian companies guilty of fraudulent and fraudulent practices and ordered them to pay $ 65 million in compensation and punitive damages after failing to honor contracts that gave Montana farmers a profit of $ 500 to $ 700. Guaranteed dollars per acre to grow and harvest CBD-producing hemp strains.

Both Vitality Natural Health and Eureka 93 have now filed for bankruptcy.

“You don’t come in and try to cheat a bunch of farmers [to grow] what could be a worthwhile commodity for the region without money, “said Bainville farmer Beau Anderson of the Montana Free Press about the historic settlement.

Understandably, farmers in Montana quickly became suspicious of hemp. From a peak of 51,000 acres in 2019, hemp plantations in Montana have now shrunk to about 10% of them in 2021.

This is the real tragedy of Montana’s initial foray into hemp; that a promising alternative crop has been cut off the stick due to the actions of a handful of bad actors.

“Farmers don’t want to grow hemp because the processors promised them the world would go with the wind,” said Drew Savage, project manager at Ag Processing Solutions. “The problem is that there are still a lot of people interested in using hemp hearts (the insides of hemp seeds) as a food ingredient. They are interested in using the stoves (core fibers of the hemp stem) for hemp concrete and as a bioplastic. They’re interested in using it, but can’t get their hands on it because no one in the US really processes it. “

It has been legal to import hemp fiber, cosmetics, and nutritional products into the US since 2004, but with a few exceptions, growing and producing hemp in the US was a federal offense until the 2013 Farm Bill was passed. This legalistic hurdle has allowed Canadian hemp producers to keep a tight grip on North American hemp production, an industry that the Hemp Business Journal estimates will reach $ 2 billion in sales by 2022.

“They legalized hemp over 20 years ago,” said Ben Brinlow, explaining the dominance of Canadians in North American hemp production.

Brinlow is a senior agronomist at INDHemp, a Fort Benton-based hemp processing company.

“You could make advances in breeding and genetics and learn all about nutrition and pest control,” he continued. “You have laid the foundation stone for grain hemp, so to speak … worldwide. We’re trying to collect all of this information in a couple of years and build this knowledge for Montana. “

With this drawback, Montana hemp processors are now turning their attention away from CBD and towards a more diverse range of established and evolving uses for hemp.

The import and domestic production of hemp in America is well documented. Since the early 17th century, the tough and fibrous stems of the hemp plant have been valued as a raw material for the manufacture of textiles, especially ropes and ship sails. According to the Oxford Dictionary, the English word “canvas” is derived from the Greek word “cannabis”, which means “made from hemp”.

The use of hemp in the manufacture of durable textiles for clothing, shoes, belts, and bags remains an important part of today’s U.S. hemp economy. However, the greater economic future of hemp could lie in a new generation of products such as “hemp concrete” and bioplastics.

“The majority of the products we will be making will be nonwovens,” said Brinlow. “People can use hemp for plant-based insulation. It can be used for biocomposites – also for plastics and hemp fibers. “

According to Brinlow, large industrial companies in the US are already using hemp as an alternative to less sustainable petrochemical alternatives such as fiberglass.

“The Ford truck here – the upholstery there – is a vegetable material made from soybeans,” he noted. “Ford Motor Company, Toyota, Mercedes Benz, BMW all use vegetable fibers; However, hemp is one of the strongest fibers and has many more uses than some of these other natural fibers. Mercedes Benz and BMW are already making vehicles with hemp-based fabrics in their headliners to replace fiberglass. “

According to Drew Savage, hemp’s long-lasting properties have already made it a horse breeder favorite.

“Tens of millions of pounds of hemp herds are sold in the US each year, but typically for animal bedding,” said Savage. “In Virginia and in places where horses typically have pine shavings for animal litter, all high-end equine people are switching to hemp because the pine shavings can get into the horse’s noses and cause breathing problems.”

The next generation of hemp-based materials is on the threshold of economic prosperity. A very promising core building material is “Hempcrete”, a biocomposite mixture of hemp horde (the woody core of the hemp stem), lime and sand, which is used as a building material and insulation material. The result is a lightweight insulation material that combines stability and insulation.

Hemp bioplastics are a little less proven, but just as promising: durable, hygienic and malleable, capable of making containers that would decompose within decades, not centuries.

“I think people of my generation should move away from single-use petroleum-based plastics that will spend ages in a landfill or floating in our water system,” said Savage. “It’s a huge problem, and it’s definitely a problem.

“Some of these (hemp-based) bioplastics begin to degrade and are biodegradable within 15 months. This is a huge benefit, not only for our community but also for the environment. It is a sustainable crop that is also carbon sequester.”

Skeptics counter that none of the next-generation hemp-based products has proven its economic viability for the coming decades. Neither had cell phones before the 1990s.

When asked where he sees hemp in agriculture in Montana after 2026, Andy Gray, coordinator of the Montana hemp program, took a long breath and offered the following.

“This is probably as much a hope as a factual prediction, but I think in five years the acres of hemp grain and hemp fiber will increase and it will be a promising new alternative crop in Montana.

“Much of the history of hemp relates to the price of wheat and barley, Montana’s staple foods. If wheat and barley prices are extremely high in the next five years, hemp will sneak in. It won’t work out like crazy. When the wheat and barley have waned, that presents an opportunity. Hemp still has a place because it is a good fruit for crop rotation and has growth potential in all the different end products, but these other raw materials have an impact on how it will grow a lot.

“Montana is built for big acreage and mechanical crops, not to say we can’t do the small acreage and the greenhouses, but I think there are other states that are better suited to that that do better on the CBD part . Montana’s stronghold in the hemp industry is likely to be fiber and grain. “

David Murray is a natural resources / agriculture reporter for the Great Falls Tribune. To contact him with comments or ideas for stories; Send an email to dmurray@greatfallstribune.com or call (406) 403-3257. For quality, subscribe to in-depth journalism with the Great Falls Tribune in northern Montana.