It’s late October in New Mexico, which means the state’s hemp harvest is well and truly underway.
While we won’t know the final numbers until the buds are off the plant, signs are pointing to a more cautious second year for the new hemp industry, thanks to new state rules, more consolidation and, of course, the COVID-19 pandemic. But some industry experts think that may not be a bad thing for the industry’s growth in the long term.
“Last year, there was an abundance of growers, and it crashed the marketplace,” said Jeff Apodaca, vice chairman at Santa Fe Farms. “We have seen those numbers stabilize.”
In 2019, the first year growing marijuana’s non-psychoactive variant was legal in New Mexico, the new industry grew like, well, a weed. The New Mexico Department of Agriculture reported that it issued more than 400 hemp cultivation licenses in 2019, several times more than the state agency forecast.
In 2020, however, some growers thought better of their decision. State agriculture secretary Jeff Witte said earlier this month that the department issued just 276 licenses this year. Witte said a number of small farmers, who grew a couple acres of hemp alongside chile, onions and other more traditional crops, made a different choice this year after finding hemp challenging to grow in New Mexico’s unique conditions.
“I think what we probably lost in licenses this year are those who tried it and decided it wasn’t for them,” Witte said.
Duke Rodriguez, founder of Ultra Health, has a different theory. Rodriguez said his company, the state’s largest cannabis producer, opted not to harvest hemp in 2020, citing a policy change from New Mexico Department of Health that hemp plants can not be grown on the same property as licensed medical marijuana. Rodriguez, who is among the petitioners challenging the rules in court, said they have prompted farmers growing both hemp and psychoactive cannabis to choose one or the other, stalling the hemp industry in its infancy.
“It literally brought our production … to a complete standstill,” Rodriguez said.
Of course, the pandemic hasn’t helped matters either. Ricardo Berroteran, lead cultivator for Rich Global Hemp in Las Cruces, said the company planned to grow up to 10 million identical immature plants, known as “clones,” in 2020. After the pandemic, the company came closer to 10,000 instead, due to lack of demand from farmers.
“Everyone kind of spooked,” Berroteran said. “No one wanted to strike out on a new venture.”
Still, all was not lost, for Rich Global Hemp or the state’s hemp industry overall. Berroteran said the company is expecting to wrap up harvesting 7.5 outdoor acres along with hemp grown in an indoor greenhouse. While fewer growers planted fewer acres in 2020, Witte said many of those growers benefited from a year of experience growing hemp in New Mexico’s unique environment. Witte said growers had a better idea of how to control pests and keep from exceeding the limit on THC, or “going hot.” He added that the state agriculture has issued 14 destruction orders for fields that went hot, compared to more than 30 last year.
“They had that one year of experience under their belt,” Witte said.
Similarly, Apodaca said the extra year has given the farmers that Santa Fe Farms works with a chance to identify the strains that grow well in New Mexico’s unique climate. Apodaca said 26 different varieties of seed were grown in New Mexico last year. In 2020, that number dropped to 16, and Apodaca said he’d like to see it as low as four in the future, as farmers hone in on a few strains that thrive in arid conditions. With fewer growers operating, Apodaca said he’d like to see New Mexico’s hemp industry cultivate a nationwide reputation for quality, rather than quantity.
“We’re still the new guys on the block,” Apodaca said.
Stephen Hamway covers economic development, healthcare and tourism for the Journal. He can be reached at firstname.lastname@example.org.