No one could have predicted such a steep oversupply of marijuana in Oregon. It has only been four years since the state voted to legalize cannabis. Excellent climatic conditions for cannabis cultivation and the enterprise of producers has led to an unexpected problem: a glut.
As prices continue to fall, some farmers are thinking of diversifying their crops to mitigate the potential losses from shifts in the balance of demand and supply.
Since 2015, the number of farmers seeking licenses from the state to grow hemp has increased twenty times. The hemp plant is related to marijuana, only that it does not intoxicate. Hemp production in Oregon has risen so sharply that now only Colorado produces more of it. Only 19 states have a hemp production industry so far.
Hemp was a natural choice. For one, it is closely related to marijuana and therefore adapted to many of the same growing conditions. Secondly – and more importantly – hemp is the source of an expensive product known as CBD oil, or cannabidiol, which fetches thousands of dollars for each kilo. The demand for cannabidiol is at an all-time high and supply is low. The high demand for CBD oil comes from a widely held belief that it has tremendous health benefits. So excited are growers about hemp, that some farmers have referred to the move towards hemp as a ‘gold rush.’
Because marijuana hasn’t been legalized in many states, Oregon does not allow growers to sell their product outside the state, even though it does not restrict the number of people licensed to grow it. This is what has put growers in a tight spot. A bumper harvest realized under such market restrictions is a blessing and a curse. Growers are learning, through experience, to roll with the punches.
The sheer volumes of usable flower available in Oregon are unbelievable. Almost 450 tonnes of the product is now available in the relatively small state of Oregon. On top of that, Oregon has 150 tonnes of marijuana extracts and related products.
Today, the Oregon Office of Economic Analysis reports that a gram of pot costs $7. It is hard to believe that only three years ago it cost at least $14.
One more unbelievable consequence of the glut in marijuana production is that storage facilities have run out. So much so that some industry players are considering destroying some of it. Not because of any restrictive laws but because there isn’t anywhere to put it. Here, growers themselves are thinking of destroying their products because they have so much of it and not enough storage facilities, or market to absorb it.
Marijuana first became legal in Washington and Colorado, where prices have also fallen, although neither has seen price fluctuations as drastic as what we see in Oregon.
Hemp is also a cannabis, only that it is not intoxicating like marijuana, and is not restricted by Federal Laws. This means that producers can sell it anywhere in America, unlike marijuana which they can only sell within the state of origin. Hemp has multiple uses compared to pot, but it is the valuable, gold-colored CBD oil that is of interest to growers because of its’ price and popularity. Today it is gaining popularity even among the mainstream population, people who are not necessarily cannabis users.
Oregon is bound to be the next largest producer of hemp. It already has an ideal climate for cannabis. It has a large number of experienced cannabis growers, who have already been employing many of the same production techniques on marijuana.
CBD has many uses. It can be added to food items like chocolate, drinks, and beverages, as well as cosmetics.
Cannabidiol is believed to have a plethora of benefits, from pain management to anxiety relief. So far it has shown great potential for pain relief, although a lot more research is still needed.
At the moment, a CBD oil derived drug for the management and treatment of epilepsy is awaiting approval from the Food Drug Administration in America. If it goes through, it will be a considerable boost to hemp producers; raising the profile of hemp as a medicinal demand and guaranteeing a long-term need for the plant.
Until it is officially recognized, hemp remains a grey area. A lot of the buyers are programs that are running pilot tests, to see the potential of the plant. For producers in Oregon, this is yet another big gamble; one that holds the promise of gold.
While marijuana is a local product, hemp is an international product, one that can be sold in different parts of America and the world.
Some growers are taking it a step further and using selective breeding to arrive at plants that have a higher CBD oil concentration. Hemp has such a multiplicity of uses. When the Chinese first domesticated it more than 8,000 years ago, they used it for fiber. When it made it to Europe and Americas, it was again as a fiber crop. It was much like flax. When WWII cut off the routes that brought fiber into the US, it was hemp to the rescue, as farmers began growing it to meet local demand for fiber. Hemp production in the US came to a decided end in 1938, when the Marihuana Tax Act came into force.
Today, hemp is the new kid on the block in America. Local demand for it was at first fulfilled by Canadian growers before local ones took it up. In 1970, hemp growing became illegal in the US, thanks to its relationship to marijuana the recreational drug. Today, the hemp industry likes to make it clear that hemp is not marijuana. Hemp has very little of the substance that makes marijuana. Even though hemp is hardly intoxicating, it is often banned together with marijuana. Some governments may allow cultivation of hemp and ban marijuana. Both may be illegal. Or, as in the case of Oregon, both may be permitted under license.
For clarity, hemp was already being grown in the US even before the Mayflower arrived. The indigenous Americans used it to make clothing and ropes. They used it because it was sturdy and long-lasting. When the pioneers came, they adopted it, starting in Virginia and soon in all of North America. Soon, word of this handy plant reached the UK, and they adopted it too.
It is believed that the Declaration of Independence was first written on hemp paper. Hemp was at one time so valuable that it was as good as money, and people would buy things with hemp. More than one of the founding fathers grew hemp in their plantations, and used hemp oil for lighting. America’s first paper mill used hemp as a raw material. The first American flag was made from hemp.
Industrial hemp was used to make paper, clothing, textiles, paint, animal feed, biofuel, biodegradable plastics, paint, food, rope, and insulation. The UK allows hemp to be used as food, as long as THC content is below 0.2%.
The shipping industry and the navy favored hemp rope for many years. Hemp was sturdy and strong. It was only phased out by manilla rope. Manilla did not need to be tarred to prevent water damage from rotting.
Hemp farming in America declined sharply in 1938, as a result of the government’s efforts to control the recreational use of marijuana. Hemp, as it were, was guilty by association, and by 1970 hemp farming was virtually nonexistent. There wasn’t enough understanding of the differences between hemp and marijuana at the time, and hemp growing suffered as a result. The difference between hemp and marijuana is the amount of THCs, the psychoactive compound that gives weed its ‘kick.’ Marijuana has 0.3% or more THC.
As of 2014, when Obama signed the Agricultural Act of 2014 into law, hemp was, for the first time recognized as distinct from marijuana. This opened the way for research programs on hemp to begin in all states. Every state has it’s own way of regulating hemp production. CBD oil is legal because it has a THC content lower than 3%. This is why the oil and many other products derived from the plant are legal in all states. It is all about the THC level. 33 states have already created regulation specific to hemp and 24 have already recognized the difference between hemp and marijuana. Even though everyone may not have noticed, hemp has always been present in cosmetic products. The oil has been an ingredient in shampoos, soaps, lotions, clothes, and even shoes. For use as a nutritional supplement, CBD oil is legal in every American state and is regulated by the FDA.
On the internet, there are easily hundreds of websites selling hemp products. Hemp coffee, protein powder, hemp seed oil, probiotics, plant powder, baking flour, and a plethora of nutritional supplements.