Reefer sadness: The promise of Nebraska hemp farming runs into harsh reality | News

SMITHFIELD – The drying yellow soybeans and corn husks are signs of early fall that huge combinations will soon absorb the grain from the large fields of Nebraska’s two main crops.

They also mark the end of a promising but problematic harvest: the hemp harvest on the Nebraska farm in the center-south of the Schwarz family, and a few other points scattered throughout the state.

This is the second year that Nebraska farmers can legally grow and process industrial hemp.

Some Nebraska growers and processors envision a future when this crop, which used to make CBD oil very popular and dozens of other products, could become a small but powerful industry in a state known for corn.

They also see huge barriers to success. They say that the warm support of the state makes it difficult to overload production. The market for hemp products, although growing rapidly, is still small and unstable. And there is a continuing misconception that what hemp growers grow is illegal marijuana rather than what they actually grow, a perfectly legal crop.

The Schwarz farm demonstrates both promise and trouble.

The Promise: Last year, Linda and Tom Schwarz and adult children Becky and Alex planted 300 outdoor plants and 800 smaller plants in greenhouse pots on their Gosper County farm. 160 pounds of CBD shoots and leaves and 80 pounds of CBD hemp were dried and bagged.

A big problem: most of the Schwarz family crop in 2020 remains in these bags, stored in the farm greenhouse. The family hoped to sell half of this hemp to a Hastings bathroom supply business, but COVID-19-related problems sparked the deal.

The family harvested hemp again this year, once in mid-July and again in early September. This is also still waiting in the greenhouse, hanging from a string and spread out on tables to dry while the farm looks for a buyer.

“If we can’t sell it, it makes no sense to grow more,” Alex Schwarz said.

Stores selling CBD products have apparently appeared in every mall and empty shopping space in Nebraska. These products cannot be legally sold as medical treatments, although sellers often market them to relieve pain, sleep better, and reduce anxiety.

Currently, the only approved pharmaceutical grade CBD product is Epidiolex, which is used to treat seizure syndromes. But a number of medical studies (more than 1,000 last year alone) are trying to determine the benefits of CBD. Some early key studies have found that it can help exhausted, exhausted, and depressed Americans, but it may not help much in pain control.

Farmers in Schwarzes and Nebraska like them grow the raw material which is transformed into CBD oils, creams, sweets, dietary supplements, lotions and dozens of other products.

But cultivating this crop means dealing with regulations that corn and soybean farmers would not dream of.

For example: hemp can only be grown and harvested here if the levels of THC, the psychoactive ingredient in marijuana, are 0.3% or lower. Authorized growers should contact the Nebraska Department of Agriculture to test plant samples prior to harvest. Hemp evidence, even too high a mass for THC, must be destroyed as a Nebraska farmer observes how his crop is literally smoked.

For hemp growers not everything is a shortage. Although they struggle to sell their hemp, the Schwarzes improve the crop. This year they raised fewer plants (400 CBD and 200 CBG), but expect similar yields in 2020 because of the lessons Gosper County farmers learned in the first year. One such lesson: they moved 2021 plants from the greenhouse to the ground outside earlier, which resulted in larger plants and shoots.

They also used varieties of automatic flowering that according to Linda Schwarz have a fixed number of days from sowing of seeds to maturity, similar to corn. That planning allowed the family to finish the harvest before the abundant wild Nebraska hemp, often called “ditch grass,” was pollinated.

A decision on how much hemp to plant next year will be made after harvesting the farm’s other crops in 2021, mainly corn and soybeans.

“We’re still experimenting right now,” Tom Schwarz said. “There just isn’t enough movement of CBD and CBG.”

After years of delays and political defeats, Nebraska took its first interim step toward legal hemp production in 2018. That’s when the U.S. Congress passed an agricultural bill that made it clear that plants and hemp products low in THC are not controlled substances.

The Nebraska legislature then passed a law, signed by Gov. Pete Ricketts in 2019, that legalized hemp farming.

Last year, 84 Nebraska growers were licensed to grow hemp, although they only planted 53. The area where hemp can legally grow quadrupled in 2021. Nearly 900 acres of Nebraska farmland and 70,000 indoor square feet are already licensed for hemp.

It is growing, but it is also undeniably small. Colorado farmers planted nearly 20 times more hemp than Nebraska this year, according to the agricultural services agency.

And corn is still king in the Cornhusker state. Nebraska growers planted about 10 million acres this year.

Although hemp production is in its infancy, you can still find places where rural Nebraska entrepreneurs try to harness the potential of the harvest, such as on a 16,000-square-foot plant near Pleasanton.

There, Sweetwater Hemp Co., owned by the Cruise family, uses a technique called ice water extraction to extract CBD and CBG from legally grown hemp plants. It is the largest processing plant of its kind in the United States.

The family has long grown corn and soybeans and also runs a business that grows herbs and transports them to Walmart stores in 13 states.

Rory Cruise is the CEO of Sweetwater Hemp. His brother-in-law Brett Mayo, head of marketing and extraction, oversees day-to-day operations at a plant that processed 20,000 pounds of hemp between January and early September.

“They don’t even work close to capacity,” he said. “… We are in full sales mode, retail and wholesale.”

Two-thirds of Sweetwater hemp tinctures, jelly beans and topical products are sold through the company’s website. The rest are sold to chiropractic offices and clinics in Grand Island, Hastings and Kearney.

Sales are hampered because big boxes won’t touch CBD and CBG yet, Mayo said, anxious because hemp regulations vary from state to state.

In Gosper County, Schwarzes have extensive experience following regulations and completing paperwork: they are certified organic and grow corn, soybeans and organic alfalfa.

Linda Schwarz does the paperwork. Since she is listed as the company’s owner on the state hemp license, she has to go fingerprinted and get an FBI background check in Omaha every year.

“Some state regulations seem to be written for people with large surfaces,” Alex Schwarz said. “If you have less than 5 acres, they’re stupid because they limit your research and development capacity.”

The Schwarzes believe that the growth of the industry depends on a state approach to producing fiber, so the whole hemp plant can be used, not just shoots and leaves. They believe that hemp has benefits for the soil and that it could work well in their crop rotations.

But Mayo of Sweetwater Hemp said companies like his and farmers like the Schwarzes are not getting enough support from the state. Sweetwater Hemp employs five full-time workers, including Mayo.

“If I’m running this plant at full capacity, I don’t even know how many jobs we would have,” he said.

“That could be something that could make a lot of money for the state. They limit what we have and they could grow the state that could fund schools, roads, law enforcement and other things.”

Steve Wellman, director of the Nebraska Department of Agriculture, said hemp could opt for existing state economic development incentives available to many types of businesses, but said he is unaware of any crop specifics.

“Dairy, sorghum, wheat, hemp. Processing could help grow any of these goods in Nebraska,” Wellman said.

The difficulty, he said, is that a crop like hemp has the economic viability needed to generate investment interest in processing.

Part of the problem, said Tom Schwarz, is changing the thinking of Nebraskans who still do not distinguish between high-THC marijuana and low-THC hemp.

Hemp is often caught up in the political struggle over whether to legalize marijuana for recreational or medical use.

“We still suffer from ‘Reefer Madness,'” Becky Schwarz said, referring to a 1936 film that focused on marijuana as the “devil’s weed.”

Mayo had a taste of this madness while serving a Sweetwater Hemp booth at the state fair. “I probably had three or four people telling me that what I was doing was illegal,” he said. “And we were in the Grow Nebraska section, at the Pinnacle Bank Expo Center.”

Wellman said the Nebraska Department of Agriculture was assigned a regulatory role for hemp. It supports commodity organizations to have leadership in promotion.

Wellman said he has seen reports of states where hemp products have been produced legally for a long time. Producers are also sitting on the product, he said.

“It’s a small market, and with a small market, it’s easy to overproduce,” Wellman said. “It’s hard to get investments. Profitability will drive decisions.”

It’s too early to judge the potential of hemp-related products, said Mark Wilkins, director of the Center for Industrial Agriculture Products at the University of Nebraska-Lincoln. The novelty of legalization means that research is lacking.

“It’s an egg and chicken problem,” he said. “No one will build a processing plant until there are hectares to harvest. No one will plant hectares until there is a processing plant.

UNL is studying how cellulose from the inner stem of hemp could be fermented into alcohol or other chemicals.

The use of hemp seed oil in food products may be a clearer path to profitability, he said, but a key question remains: What to do with leftover plant?

When soybean oil is extracted, what is left is used as livestock feed.

“You can’t do this with hemp seeds. Because? I don’t know, “said Wilkins.

Mayo said the valuable by-products of CBD and CBG processing will be lost. The remnants of water could go to the hemp fields. Biomass could be turned into livestock feed. An oil by-product could be used as a fertilizer. None of these by-products are approved for use by the state, he said.

“It’s not dangerous,” Wilkins of UNL said about industrial hemp products. “A lot is that it still looks like marijuana. This way you will get these weird rules that you will never get with corn or soy. He will never go ahead with those in his place.

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