MADISON, Wisc. (Dec. 6, 2017) – Last Thursday, Wisconsin Gov. Scott Walker signed a bill into law legalizing hemp cultivation for research purposes only in compliance with federal law. The new law could lay a foundation to eventually expand the hemp market in the state, and with further action, could set the stage for nullification of federal hemp prohibition in the future.
A bipartisan coalition of 12 senators introduced Senate Bill 119 (SB119) in March. As introduced, the legislation would have authorized the planting, growing, cultivating, harvesting, and processing of industrial hemp for “commercial purposes or research,” ignoring federal law prohibiting the cultivation of hemp for commercial purposes. But the Senate ultimately passed a substitute bill that only authorizes hemp production “to the greatest extent allowed under federal law.” That means Wisconsin will create a licensing and regulatory structure for the production of industrial hemp within pilot programs for research purposes only, but farmers will not be able to produce hemp for commercial purposes.
The Senate unanimously passed the amended version of SB119 on Nov. 7 by a 33-0 vote. On Nov. 9, the House approved the measure 99-0. With Gov. Walker’s signature, the law will go into effect the day after it is officially published.
FEDERAL FARM BILL
Early in 2014, President Barack Obama signed a new farm bill into law, which included a provision allowing a handful of states to begin limited research programs growing hemp. The “hemp amendment”
…allows State Agriculture Departments, colleges and universities to grow hemp, defined as the non-drug oil-seed and fiber varieties of Cannabis, for academic or agricultural research purposes, but it applies only to states where industrial hemp farming is already legal under state law.
In short, current federal law authorizes the farming of hemp – by research institutions, or within state pilot programs – for research only. Farming for commercial purposes by individuals and businesses remains prohibited.
With the passage of SB119, the Wisconsin Department of Agriculture will have the authority to establish a pilot program in the state for research purposes.This lays the foundation for a hemp market to begin develop in the state by putting a licensing structure in place and opening the door to limited cultivation. But for a full-fledged hemp industry to evolve, further steps will be necessary.
Several other states with federally-compliant hemp programs, such as Kentucky, North Dakota, Minnesota and New York, have grown significant acreage under federally-approved research programs. This represents a first step, but with federal shackles in place, these states are not allowed to develop any kind of commercial market.
Recognizing its limited research program was hindering the development of the industry, West Virginia dumped its federally compliant hemp program during the 2017 legislative session and will now issue federally non-compliant commercial licenses to growers. West Virginia Public Broadcasting confirmed limits imposed by the old program due to its conformity with federal law were holding back the development of a viable hemp industry and everyday farmers cannot benefit.
“But because of the strict requirements under the 2014 bill, growers are not able to sell their plants and cannot transport them across state lines to be turned into those usable products. That’s limited the ability to create a real hemp industry in the state.”
States with federally compliant hemp programs should follow West Virginia’s lead if they are serious about developing thriving hemp industries within their borders.
Other states, including Colorado, Oregon, Maine, California and Vermont have simply ignored federal prohibition and legalized industrial hemp production within their state borders. While prospective hemp growers still have to take federal law into consideration, eliminating the state requirement for federal permission clears away a major obstacle to widespread commercial hemp farming within the borders of the state.
Colorado was the first state with widespread commercial hemp production. Farmers began growing hemp in southeast Colorado back in 2013 and the industry is beginning to mature. The amount of acreage used to grow industrial hemp in the state doubled in 2016 to nearly 5,000 acres, and nearly doubled again in 2017.
The Oregon legislature initially legalized industrial hemp production in 2009. While it was technically legal to grow hemp in the state, farmers didn’t take advantage of the opportunity for nearly five years. When the Oregon Department of Agriculture finally put a licensing and regulatory program in place early in 2014, farmers began growing hemp. The initial regulatory structure placed significant limits on hemp farming and effectively locked small growers out of the market. In 2016, Gov. Kate Brown signed House Bill 4060 into law. It relaxed state laws regulating hemp already on the books and made the crop more like other agricultural products. Within months, the Oregon Department of Agriculture had already promulgated new rules under the reformed law. According to Oregon’s Cannabis Connection, the rules set the stage to creates a “massive” medical hemp market. The state produced 3,469 acres of hemp in 2017.
Both Colorado and Oregon demonstrate how loosening rules at the state level encourage the market and allow hemp a legitimate commercial hemp industry to develop.
HUGE MARKET FOR HEMP
According to a 2005 Congressional Research Service report, the U.S. is the only developed nation that hasn’t developed an industrial hemp crop for economic purposes.
Experts suggest that the U.S. market for hemp is around $600 million per year. They count as many as 25,000 uses for industrial hemp, including food, cosmetics, plastics and bio-fuel. The U.S. is currently the world’s #1 importer of hemp fiber for various products, with China and Canada acting as the top two exporters in the world.
During World War II, the United States military relied heavily on hemp products, which resulted in the famous campaign and government-produced film, “Hemp for Victory!”
Tenth Amendment Center
The Tenth Amendment Center is a national think tank that works to preserve and protect the principles of strictly limited government through information, education, and activism. The center serves as a forum for the study and exploration of state and individual sovereignty issues, focusing primarily on the decentralization of federal government power as required by the Constitution. For more information visit the Tenth Amendment Center Blog.