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Change in hemp law fuels ‘green gold rush’

Farmers are starting to grow hemp in New Mexico. Here, in background from left, David Hill, co-founder and head of regenerative quality and education at First Crop, a newly created business that works with hemp farmers, and First Crop cultivation specialist Danny Weir work with Abiquiu farmer Stan Bader, who has started growing hemp on an acre of his land. (Eddie Moore/Albuquerque Journal)

Copyright © 2019 Albuquerque Journal

“I must have answered the question ‘Can I smoke this?’ 2½ million times,” said Kathleen Savage, who has operated Santa Fe Hemp on Water Street for 20 years.

About 15 minutes later, a man strolled by the counter toward the store’s fitting room to try on a shirt made from hemp.

“Would I be able to smoke this?” he asked Savage with a smile.

Most folks who ask Savage that question are joking. But there’s still a lot of confusion about hemp, also known as industrial hemp, a cannabis sativa plant that’s a cousin to marijuana.

Smoking hemp won’t get you high, even though the plant had been classified as a Schedule I drug under the Controlled Substances Act – on a par with heroin and LSD as substances deemed to have no accepted medical use and with a high potential for abuse.

That changed in December, however, when the U.S. Congress passed the 2018 Farm Bill, removing hemp from the list of controlled substances and classifying it as an agricultural commodity.

This year, a bill passed by the New Mexico Legislature authorized state agencies to regulate the hemp industry in the state. The state Department of Agriculture will oversee the cultivation, breeding and testing of hemp plants. The Environment Department will regulate what happens after harvest – the extraction and processing of hemp oils, and the manufacturing and transportation of hemp products.

Rushing the rules

The change in law is a big deal. New Frontier Data, a cannabis market research firm, estimated that by 2022, hemp will become a $2.6 billion industry nationwide. And New Mexico is eager to cash in on the hemp vein of the “green gold rush.”

“The hemp industry is bursting with potential,” Gov. Michelle Lujan Grisham said in an April news release after she signed the bill establishing commercial and industrial uses for hemp and creating a regulatory structure. “As we do the work to diversify our state economy, hemp can and will play a key role, boosting our value-added agricultural sector, creating high-quality jobs and driving innovation.”

Three months later, Brad Lewis, a division director at the state Department of Agriculture, said the state is seeing the results.

From left, Stan Bader, a farmer and owner of Las Parras de Abiquiu, and Danny Weir and David Hill of First Crop, a newly created business that works with hemp farmers, assess hemp plants being grown on an acre of Bader’s land in Abiquiu. (Eddie Moore/Albuquerque Journal)

“We’ve seen commercial buildings that have been vacant for years now being repurposed for hemp,” he said. “We’ve seen jobs open up for the production of hemp. We have seen millions of dollars flow into the state with hemp businesses. We’ve seen the state itself invest in hemp businesses through grants and loan programs. We’re seeing new cottage industries develop around hemp, as well as larger commercial companies that are moving in, and we’ve seen agreements between universities and private companies to conduct research.”

One new business that has sprouted because of hemp is First Crop, which recently opened offices on Pacheco Street in Santa Fe. While First Crop is initially focused on processing hemp for CBD products, the company has an eye toward expanding to serve other market sectors that make products from the hemp plant and seed.

And the hemp boom that is reverberating in New Mexico is happening before regulatory rules have even been formally established.

“All the state agencies involved in this are having to rush our rules one way or another,” Lewis said. “We’re beginning to see the initial harvest now from greenhouse operations, and we’ll start seeing field harvests by October.”

Lewis said the Department of Agriculture is still in the process of drafting rules associated with the regulation of hemp breeders and laboratories that test raw hemp.

Hemp plants contain small amounts of THC, the psychoactive compound that gets people high. But federal law mandates that hemp plants cannot contain more than 0.3% of THC.

Meanwhile, the Environment Department is publicizing an emergency rule regulating what’s done with the plant after harvest.

The department hosted the last of a series of meetings Wednesday in Albuquerque to discuss rules set to go into effect this week pertaining to the extraction, manufacturing and storage of hemp.

Lewis said that licenses to grow hemp began in December as a result of the 2017 Hemp Research Cultivation Act, which former Gov. Susana Martinez intended to pocket-veto, along with nine other bills. But because she failed to provide reasons for the vetoes as required under the state Constitution, the state Supreme Court ruled last year that the vetoes were invalid.

In 2015, Martinez vetoed a bill that would have funded research into hemp, saying that given the similarities between hemp and marijuana, the legislation could create challenges for law enforcement during investigations of drug crimes.

The new governor has been supportive not only of hemp, but also of the cannabis industry as a whole. Last month, a cannabis legalization task force Lujan Grisham created met for the first time. It is tasked with looking into how states that have legalized cannabis for recreational use are regulating the plant from seed to sale.

Lewis said the hemp industry in New Mexico is beginning to boom. He said the state has issued about 335 licenses to grow hemp on approximately 7,000 acres for outdoor operations and another 110 acres for indoor grows.

“The interest has been much more than I anticipated,” he said. “We’re poised to be one of the major hemp-producing states in this part of the country.”

Nuclear cleanup?

Jerry Fuentes and his partner, Gloria Castillo, have been advocating for industrial hemp in New Mexico – and the entire country, having made more than a dozen trips to Washington, D.C. – for a long time.

“It’s taken us 18 years to get to this point,” Fuentes said, adding that the potential is now there for New Mexico and its Native American tribes to cash in. “There’s a huge, huge, demand and very little supply.”

He said hemp provides a great opportunity for farmers.

“It’s perfect for small farmers. They can substitute alfalfa for hemp and do a lot better. I think we’ll start seeing it enter into the crop rotations from here on out,” he said.

Fuentes remembers his grandparents growing hemp on their land in Truchas before the 1937 Marihuana Tax Act made it illegal, though the ban was lifted during World War II to allow the production of canvas, rope and uniforms to assist the war effort. He said those types of products and many others could grow out of the hemp industry in New Mexico.

Recently, the focus has been on CBD products, which are used to ease aches and pains, reduce anxiety, help people sleep better and protect against some cancers. But many other products can be made from hemp, Fuentes said, including paper, building and packaging material, food for people and animals, biofuels and bioplastics.

“If they start making biodegradable plastics out of hemp, it’s going to be huge,” he said.

Mikki Anaya has also been an advocate for hemp. She served as volunteer communications coordinator for the New Mexico Industrial Hemp Coalition before it disbanded after its mission was met by last year’s Supreme Court ruling that allowed for the Hemp Research Cultivation Act to take effect.

While she owns a small farm in Glorieta, she’s decided not to grow hemp just yet. She’s more interested in the value-added opportunities created from industrial hemp.

“The vast majority of people are growing hemp for CBD; I’m primarily interested in the fiber,” she said. “So I’m looking at what are some of the strains and what is good for fiber, and what are the steps to do the processing.”

Anaya said she’s been shopping around for a decorticator, a machine that strips plant stalks to extract two types of fibers. Because hemp was illegal for so long in the United States, they’re hard to find.

“What I’m finding is that I would pretty much have to order one from overseas,” she said.

She’s also looked into making other value-added products.

“Right now, it’s looking like the easiest entry is with hempcrete,” which she said is used as a construction material and for insulation.

Or how about using hemp to clean up nuclear waste?

Scientists experimented with using hemp to detoxify contaminated fields near Chernobyl, Ukraine, in the 1990s, and it was considered as a means to remediate radiation in soils around Japan’s Fukushima Daiichi nuclear disaster.

So, could hemp be used to clean up legacy waste in soils around Los Alamos National Laboratory?

“The better question is, why aren’t we even trying?” said Zach Wright, an agronomist who has worked with farmers in different parts of the country, including a six-month stint in Nambé. “It’s a natural plant, and it’s through nature’s infinite wisdom that it’s available to us.”

Wright said cannabis sativa plants are bioaccumulators that produce phytoalexins, which work as a defense system for the plant and, in doing so, take contaminants out of the soil. He said that in his work, he has frequently seen cannabis plants growing around rusty vehicles, tractors and farm equipment.

Phytoremediation is considered by hemp proponents to be a cost-effective environmental restoration method and alternative to mechanical procedures that can be more destructive to soil.

“There’s been such a stigma for so many years now with cannabis sativa in general. We live in such a narrow-minded culture; people are starting to wake up about it now,” he said.

Wright, who now lives in South Dakota, agrees that New Mexico is primed to become a leader in the hemp industry. The semiarid climate is ideal, he said, with low humidity that reduces the threat of mold, which can be devastating to a crop.

“New Mexico is so ripe. And everyone seems to want to take the conversation (about hemp) further,” he said. “You could be the No. 1 hemp-producing state in the country.”

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