The 2018 farm bill redefined hemp as an agricultural commodity and removed hemp from the Controlled Substances Act and the jurisdiction of the Drug Enforcement Administration, opening the possibility of hemp growing for Puerto Rico.
Irving Rodríguez, director of the Office for Licensing and Inspection of Hemp of the Department of Agriculture, reports that his office is preparing a plan for the USDA. He estimates that farmers in Puerto Rico could produce 10,000 acres worth of the crop next year, bringing $100 to $150 million into the territory’s coffers.
Thirty research growing licenses and seven manufacturing licenses have already been awarded, and the office expects to award 50 licenses in total.
Hemp growers
Hemp is a variety of the cannabis plant which has low levels — less than 0.3% — of THC (tetrahydrocannabinol), the psychoactive chemical that gives marijuana its mind-altering effect. Marijuana is a schedule I narcotic, but it has been legal for medicinal use in Puerto Rico since 2017.
Since the 2018 farm bill made hemp a legal crop, hemp can be grown with fewer restrictions than marijuana for medical use. Each state and territory has its own restrictions and regulations.
In general, growers of the crop must have licenses permitting them to plant and produce hemp. In many states, growers are still officially conducting research and are licensed for research rather than agriculture. They must have THC levels tested before harvesting the plants. Any plants with levels of THC above 0.3% must be destroyed. Plants with acceptable THC levels must be harvested within days after testing to ensure that they do not develop unacceptably high levels of the chemical before being picked and processed.
Sale of the hemp is usually restricted, even for licensed growers. Typically, licensed growers may sell hemp only to licensed manufacturers, who may produce CBD oil and other products such as rope or animal feed. Puerto Rico has not yet worked out the details of its regulations, but its plan must be presented to the USDA by January.
Economic opportunity
Puerto Rico’s Department of Agriculture is optimistic about the economic prospects of hemp growing in Puerto Rico. The tropical climate means could allow three crops per year.
The FDA has not yet approved CBD for any medical purposes, and edible CBD products may not be sold across state lines under current federal law. However, the market for CBD is already growing. The Brightfield Group, a market research firm, predicts that the CBD industry will reach $22 billion in the near future.
The Congressional Research Service estimates current hemp sales in the United States at $700 million annually. Their report on the market potential of the crop determined that it was not possible to make accurate estimates; research projects mentioned in the report ranged from claims that industrial hemp could bring in more than traditional row crops to predictions that the labor-intensive nature of the crop, especially under strict regulations, means it “is not likely to generate sizeable profits.”
The overall determination was that “it is not possible to predict with any degree of confidence the potential market and employment effects.”
“Nevertheless,” the report concludes, “the U.S. market for hemp-based products has a highly dedicated and growing demand base, as indicated by recent U.S. market and import data for hemp products and ingredients, as well as market trends for some natural foods and body care products. Given the existence of these small-scale, but profitable, niche markets for a wide array of industrial and consumer products, commercial hemp industry in the United States could provide opportunities as an economically viable alternative crop for some U.S. growers.”
Puerto Rico’s long growing season could give the territory an advantage in the industry.
