Susquehanna Mills Co. has been in the seed oil game for 18 years, producing cooking oils and other home products. When hemp came around, the opportunity and the promise seemed clear: The company picked up one of the first 13 permits to grow industrial hemp in Pennsylvania.

Susquehanna Mills Co.

Owner Josh Leidhecker says he was looking for an alternative crop for Susquehanna’s local farmers. He and his team had the processing equipment on-site already; in 2017, when industrial hemp was first planted under Pennsylvania’s pilot program, it was just a matter of learning the ins and outs of this crop. 

That’s no small task, but Leidhecker’s background in seed oil processing gave him and his team a leg up from the jump. Among the early challenges of working with hemp seed was its moisture sensitivity.

“These specialty oil seed crops, they're not as simple as corn and soybeans,” Leidhecker says. “From a production standpoint, yes, a farmer can grow anything, but all of these require a little more attention to detail in the harvesting, conditioning and storage to keep them at a condition that's worth processing.”

The company’s first hemp grain harvest in 2017 was hit-or-miss, with the team forced to toss some of the seeds and quickly adapt to the importance of cool, dry storage. It’s not a crop, Leidhecker points out, that can be shuttled off to the elevator the minute it’s harvested; delicate chemical balances are in play with every plant and every seed.

Hemp seeds are high in Omega-3, a “healthy yet unstable triglyceride,” Leidhecker says, explaining that the seeds are more prone to oxidation that some of the other fatty acid chain oils on the market (like those processed from peanuts or soybeans).

“It was harder than anything else we’ve harvested to maintain right on the back end,” he says, looking back to the company’s first harvests. “And we've got that under control now. We had to put in a separate facility to immediately clean the grain out of the field and then dry it to an acceptable storage moisture. We’ve got that dialed in, but that's what I always recommend to any farmer: making sure there are certain things on-farm set up to manage this grain as it's harvested. It’s certainly challenging.”

Susquehanna Mills Co.

And, with so many possibilities contained with the cannabis plant in the legal hemp industry, Leidhecker quickly worked to expand the team’s knowledge: delving into CBD extraction, fiber processing and now even looking into hemp protein as a source for animal feed in the future.

“We are engaged in all three disciplines of industrial hemp: cannabinoid production, fiber production and then, of course, grain processing,” he says. “I think it's important to be eyes-wide-open about those markets as they shift and change. For instance, the first couple of years, we might have made most of our revenue from CBD lines, but now this year it's going to be more foodstuff and agricultural-driven stuff—less CBD stuff until the CBD market starts to move toward food products, which is going to happen. It’s just a matter of time here.

That’s one of the great questions in the industry right now: What’s needed to get the market infrastructure developed? Consumer demand, supply chain bottlenecks, the high cost of the hemp learning curve, processing equipment prices—all are economic puzzle pieces that must interlock favorably to kick off a surge of fiber and grain production. So much of the hemp business, particularly in the U.S., is based on CBD extraction (and awaiting further clarification from the federal government on that front). But Leidhecker points to the sheer expansiveness of a future fiber or grain segment in the industry.

And, as that shift gets under way, hemp farmers in the CBD game would do well to study the other parts of the burgeoning marketplace. As for those hemp farmers who may be interested in transitioning some acreage from CBD extraction to, say, grain production in 2021, it’s two different approaches to cultivation.

“Apples and bananas,” he says. “Absolutely totally different.”

Susquehanna Mills Co.

CBD production is more akin to the horticultural side of hemp; fiber and grain echo some of the long-held best practices of grain farming.

It’s a learning process, either way. And Leidhecker says that part of the work is simply finding a place in a market that’s not entirely in place. “Just trying to develop the markets is the challenging part now,” he says.

He’s joining the thousands of other U.S. hemp farmers presently setting goals for the 2021 season. At Susquehanna Mills Co., Leidhecker is eager to roll out a new snack line and help along the early legalization efforts behind hemp as animal feed.

“We're hoping that through some of our research work with our research partners [in Pennsylvania], with the work that we’re doing currently, we can get hemp more mainstream for the inclusion in the agricultural production of beef and chickens and pork and those sorts of markets,” he says. “These markets will develop as widespread acceptance in the feed market will allow for an economy of scale that can drive a bigger expansion.”

Economy of scale: It’s a classic idea that drives business development, from the owner on down to the consumer base. It’s the next hurdle to be leapt before farmers feel comfortable—on a sprawling, national scale—adding the crop to their rotations and experimenting with new supply chains.

“I'd like to really tie down some fiber markets,” Leidhecker adds. “I’d really like to help develop some fiber markets or possibly have the ability to aggregate and pre-condition the fiber to fit into some of the existing markets that are interested in it.”

WASHINGTON, D.C., Feb. 8, 2021 - PRESS RELEASE - The National Industrial Hemp Council (NIHC) and The Hemp Industries Association (HIA) together announced results of a month’s long survey on industry attitudes towards a hemp checkoff program.

The results of the overall survey show that nearly 8 out of every ten farmers and processors support the checkoff program for research, promotion and consumer education. Over six of ten farmers and processors support being assessed to fund a program.

“This is exciting news for our industry and exciting that there is such wide consensus in our industry to support such a program,” said Patrick Atagi, board chairman of the National Industrial Hemp Council. “We believe that a checkoff program will help hemp not only develop markets for hemp products but also fund much needed research and educate consumers on the usefulness and versatility of hemp.”

“It’s clear from the survey response that there is a broad level of excitement around the idea of a national hemp checkoff program, and significant interest in the potential return the hemp industry could see from an effective research and marketing program under USDA,” said HIA President Rick Trojan. “We in the industry recognize the incredible potential of this agricultural commodity, and there was a strong consensus around the importance of educating the market about the value of hemp across the supply chain for food/grain, fiber, and cannabinoids. It’s encouraging to see the positive feedback this dialogue with the industry has generated so far and we look forward to continuing to partner with the NIHC and other forward-looking allies to explore the tremendous opportunity a national checkoff represents for hemp.”

USDA checkoff programs seek to promote farm commodities and expand the market opportunities for farmers, importers and industry stakeholders. Funded through assessments on the produced commodity at the first point of sale; checkoff programs allow producers of commodities to pool resources for research, education, and promotion efforts that can expand sales and improve production efficiencies. 

Currently, USDA Agricultural Marketing Service (AMS) oversees 23 checkoff programs for various commodities ranging from cotton to pork to Christmas trees.  A study in 2018 by Texas A&M found that the existing 23 checkoffs had a return on investment for farmers and ranchers ranging from three to seventeen dollars in value that came back to the producers for every checkoff dollar invested.

The NIHC and HIA are now working to form a Task Force of representatives from across the industry that would discuss the details of how a hemp checkoff would be structured and operate.  The effort of the working group would guide the development of a proposal to submit to the USDA that will include an industry analysis; justification for the program; program objectives; and the impact on small businesses.

The survey received 270 responses and was conducted online via Survey Monkey from November 30, 2020, until December 31, 2020.

NIHC and HIA representatives are holding a media availability to discuss the results of the survey and next steps on Wednesday, February 10^th at 11 a.m. EST. To RSVP for the zoom link, members of the media can contact Larry Farnsworth with NIHC at lfarnsworth@hempindustrial.com.

The Wyoming legislature has proposed a new bill on smokable hemp to the senate judiciary committee for consideration, which could take effect July 1. 

Senate File 90 would prohibit the sale of smokable hemp to anyone under the age of 21 and prohibits using smokable hemp in public.

An individual who knowingly or intentionally smokes a product containing hemp in public is guilty of a misdemeanor and will be charged up to $50 for the first offense, up to $100 for the second and up to $500 for the third offense, the proposed legislation states.

The legislation also proposes that a person who sells, offers, gives away or delivers smokable hemp or smokable hemp products to a person under the age of 21 is guilty of a misdemeanor punishable by fines up to $250 for the first offense, $500 for a second violation within 24 months and $750.00 for a third or subsequent violation committed within 24 months.

In addition, the legislation also states that the court may allow the defendant to perform community service and be granted $10 for each hour of work performed under the first and second violation and $5 per hour under the third violation. The pay will be credited to the defendant's fine and court costs.

Retailers who knowingly sell, offer, give away or distribute smokable hemp or smokable hemp products to a person under the age of 21 will be charged with the same fines but will not have the option to perform community service.

Retailers who commit their third offense within 24 months may no longer be allowed to sell smokable hemp products at their location, the proposed legislation states.

Aside from smokeable hemp products, the bill also proposes that, "Any hemp product marketed or intended for consumption as food or beverage shall include a label on the packaging of the product that lists all active and inactive ingredients in the food or beverage product that contains hemp or cannabidiol" (CBD).

In addition to Senate File 90, legislatures also submitted House Bill 82 to the house judiciary committee for consideration. The bill states that the state health officer should develop a report on the implementation of medical cannabis in Wyoming with the assistance of the department of health, the board of pharmacy, the state board of medicine, the state insurance commissioner and the attorney general.

The bill states that the report should identify medical conditions that would benefit from the treatment of medical cannabis, according to medical evidence. 

The report should also include recommendations on how to regulate medical cannabis prescriptions, recommendations on preventing wrongfully obtained prescriptions, a timeline for the implementation and regulation of medical cannabis in the state and identifying changes necessary to implement the use of medical cannabis.

"The state health officer shall provide the report required under this section to the joint labor, health and social services interim committee not later than September 30, 2021," the bill states.

For more information, visit wyoleg.gov.

This week, Congress reintroduced a bill that would legalize cannabidiol (CBD) in dietary supplements. First introduced in the last Congress as H.R. 8179, the act would create the first pathway for non-medical CBD product to be approved and regulated by the FDA, thereby promoting consumer safety. The bill has garnered bipartisan support. Read more

Meanwhile, biomass prices appear to have reached some level of stability heading into 2021. A recent Hemp Benchmarks report shows prices remained steady for January, while prices for smokable CBD flower grew for the second month in a row. Read more

In other news:

• Canadian Rockies Hemp Corporation, an Alberta-based agribusiness that focuses on processing hemp at scale for industrial use outputs, has announced the closing of a CAD $18 million equity and debt financing led by Merida Capital Holdings. The company will use the proceeds to complete construction of its Bruderheim biorefinery, the first of several planned across Western Canada. Read more
  

• Cannabis Conference—the cannabis industry’s leading conference for cultivators, retailers, extraction specialists and hemp growers—will return to the Paris Las Vegas Hotel & Casino from August 24-26, 2021. Read more

• The team at Midwest Hop Producers, based on a farm in Plattsmouth, Neb., are making the switch to hemp. As 2021 unfolds, Midwest Hop Producers is planning to grow starts in their greenhouse for other farmers and develop an educational conference for the regional hemp industry. Read more

• As the New York State Department of Health (DOH) continues to work on proposed hemp and CBD regulations, growers have been communicating with the department about some of the intricacies. Read more

• Coexist Build, a Pennsylvania-based architecture firm, was awarded a $4,500 grant from the state department of agriculture to call attention to its regenerative organic farm, which features hemp-based construction. Read more