The first year of growing hemp in Kansas was a mixed bag, according to a state report, which predicted that more efficient practices could see revenues grow to upwards of $21 billion.
But farmers might need to temper their expectations in the meantime, according to the report released Wednesday by the Legislative Division of Post Audit.
Hemp, the non-intoxicating relative of the marijuana plant, has grown naturally in the state for decades. It was banned in 1970 as a crop under the federal Controlled Substances Act, a move that Congress only recently reversed in 2018.
Hemp fiber can be used in clothing or textiles but the most profitable element is cannabidiol oil, or CBD, which is extracted from the plant’s flowers and is used in a wide variety of health and nutritional products.
2019 marked the first year that hemp was grown as a crop in Kansas, with farmers encouraged by reports of profits in other states of thousands of dollars per acre.
But revenues checked in at $4 billion in 2019, according to the state analysis conducted in conjunction with a University of Kentucky researcher.
Farmers excited about the opportunities in the CBD market were especially likely to be disappointed — the analysis reported a $12.5 billion loss for that part of the plant.
Such early growing pains are common, according to Matt Etzel, the LPA staffer who carried out the report.
"It is not uncommon for states to go through a bit of a learning curve growing hemp," Etzel told legislators. "It might take a few years for farmers to learn best practices."
The CBD market has also become oversaturated, Etzel noted, leading to a difficulty in finding potential market opportunities.
"The problem is (the farmers) are finding no market," said Rep. Kristey Williams, R-Augusta. "If a farmer finds a market, they don’t want to share or divulge that market because they are so few and far between."
But the future could be brighter, the report noted. Using Kentucky’s more established hemp program as a model, the report estimated that the crop could eventually bring in $21 billion annually.
Per-acre, hemp could figure to be significantly more profitable than soybeans, corn or sorghum.
"Compared to these other crops, hemp has the potential to be an economically successful crop in Kansas," Etzel said.
There is other good news for farmers as well. The state received approval in April to allow farmers to begin growing hemp commercially without needing to partner with a research institution, such as Kansas State University.
The Department of Agriculture has said it hopes to have regulations in place by the 2021 growing season.
In a formal response to the audit, KDA Secretary Mike Beam said that, with time, farmers would begin to realize more success with hemp.
"KDA acknowledges these risks and challenges and believes that as federal and state regulations surrounding production become more certain, growers become more experienced, and processors and market outlets become more available, the opportunity for the crop’s success in Kansas will ensue," Beam wrote.