The Highs and Lows of Texas' First Year of Hemp Production

Departments - Smart Start State Spotlight

While some farmers experienced growing pains during the state’s first year of hemp production, they are hopeful the industry will be thriving soon.

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November 20, 2020

© Richard A McMillin | iStock

Troy Owen dove into hemp cultivation as soon as Texas’ first year of licensing opened in March.

He was one of the first farmers to receive a hemp cultivation license in the state and planned to grow a hefty 500 acres for grain on his farm about 60 miles south of Houston. He felt ready to do so after spending the year prior traveling the country to learn about growing the crop and securing contracts.

But problems quickly arose.

First, the state did not begin administering licenses until late April. So, Owen could not get his seeds in the ground until early May, and then the spring rain drowned out his entire field. Owen replanted all 500 acres in June, but by then, the ground was so hot that it burned the hemp before it could sprout.

Such is the fickleness of growing hemp in Texas, with its range of climates and relatively new program. “People around the state haven’t had [the] best of luck either,” Owen says.

But despite the tribulations, Owen is confident that once the state’s market is established, the hemp industry will be added to the list of things that are bigger in Texas.

“When it gets here, it’s going to be a huge, growing market,” Owen says. “That’s why we wanted to jump out there.”

A New Industry

The U.S. Department of Agriculture (USDA) approved Texas’ hemp plan in January. Despite its infancy, Texas’ hemp program is, in some respects, relatively progressive compared with the rest of the country. For example, according to U.S. Hemp Roundtable, it is one of more than 20 states that has enacted regulations for consumable cannabidiol (CBD) products, thereby legalizing the industry and providing the clarity many business owners have been asking for before they delve into production. The regulations include a random CBD product testing program created and carried out by the Texas Department of Public Safety and the Department of State Health Services (DSHS), the agency that regulates consumable hemp.

“With the passage of the 2018 U.S. Farm Bill, Texas was seeing an exponential influx of products derived from or including hemp, from lipsticks to lotions to CBD oils,” Sen. Charles Perry, Senate sponsor of H.B. 1325, which legalized hemp in the state, said in a news release. “These products were coming from states and countries that may not require robust testing or labeling. House Bill 1325 added some of the strongest consumer protections in the nation to ensure these products are safe for consumers.”

Texas’ program also requires farmers to grow varieties on its Approved Varieties List that have been proven to test below the federal 0.3% THC limit in the state (though the list does not guarantee that farmers will achieve under 0.3% THC, as cannabinoid levels are thought to spike under certain conditions). So far, nearly 330 varieties are on the list.

And, if a farmer’s crop tests hot above the THC limit, the grower has options beyond the total crop disposal that is written into the USDA’s interim final rule. For example, growers in Texas can trim their plants until the delta-9 THC concentration falls within limitations and only dispose of the noncompliant parts of the plant. If that renders plants unusable for extraction, growers still have the option to process the plants’ fiber as an alternative.

The state’s program does, however, have at least one contentious aspect: its smokable hemp ban. H.B. 1325 prohibits the manufacturing and processing of smokable hemp in Texas to quell law enforcement’s challenge of differentiating hemp from its illicit cannabis cousin.

However, despite thousands of public comments in opposition of the ban and some stating it would squander up to half of their business, the DSHS recently took the regulations a step further and prohibited the sale of smokable hemp as well. It is notable that the law does not explicitly prohibit the sale of raw flower—it just cannot be marketed as smokable.

Regardless, the DSHS’s extra regulation sparked an ongoing lawsuit between four hemp companies and the agency. In the lawsuit, Crown Distributing LLC, et al. v. Texas Department of State Health Services, et al., the plaintiffs assert that DSHS has overstepped its authority and the ban is unconstitutional.

“If allowed to move forward, these bans on smokable hemp products will shutter businesses across the state, resulting in a loss of jobs and tax revenue. They impede the economic liberty of Texas businesses, pose an existential threat to Texas hemp manufacturers, farmers, and retailers, and are sure to stifle growth of a budding Texas industry,” the companies state in their lawsuit. “Texas has sent a clear message to other companies in the industry: take your business and jobs elsewhere.”

In September, Texas district court Judge Lora J. Livingston ruled to temporarily prevent the state from enforcing any of its bans on smokable hemp until the case can go to trial in February.

Cultivation in the State

While Texas doesn’t currently track what licensees are growing hemp for, anecdotal evidence suggests many are going against the trend of growing for just flower.

That may be driven, in part, by Panda Biotech, a hemp fiber processing company that donated 60 tons of hemp seeds to Texas farmers earlier in the growing season for a research project in coordination with Texas A&M AgriLife Extension. The two are working to compile a report with the data collected throughout the season, including which regions of the state are most conducive to growing the crop. “Panda Biotech believes fiber will be the dominant sector of the Texas and national hemp industry,” says Bill Pentak, a company spokesperson.

Owen says he knows farmers across the state who grew for cannabinoids, fiber and grain. He says that’s partially because farmers had already seen CBD prices tumbling by the time Texas opened up licensing, so they decided to pursue other avenues.

While the state and its growers find their footing with this new crop, Owen says the sheer size of the state and its nearly 250,000 farms and ranches (hemp and non-hemp)—more than any state in the U.S., according to the Texas Department of Agriculture—may give it an edge in the long run. “As we figure it out, as we move forward, we’ve got a lot of acres where we can utilize hemp as a rotational crop,” Owen says.

Theresa Bennett is the associate editor of Hemp Grower.