Is hemp the future of NC agriculture?

CORRECTION: July 23, 2018: People who want to grow hemp legally in North Carolina need to obtain a license from the North Carolina Industrial Hemp Commission. The original version of the story misstated the name of the organization that issues the licenses.

LUMBER BRIDGE — If someone were to wander across Al Averitt’s farm, past a corn field on the left and rows of red-flowered crape myrtles on the right, that person might be tempted to call 911.

Or he might be tempted to steal.

In tidy rows across 3 acres in northern Robeson County, Averitt has hundreds of cannabis plants. One every six feet. The plants are growing through sheets of white plastic that keeps down weeds, and their roots receive precise amounts of water and fertilizer from an underground irrigation system.

The plants look just like marijuana, with long, narrow leaves that have serrated edges. Sure to catch the eye of a law enforcement officer or someone looking to get high.

But Averitt’s plants are legal — he has a license to prove it, should the sheriff pay him a visit — and they can’t get you high.

Averitt is one of more than 300 North Carolina farmers experimentally growing industrial hemp. Hemp farming is otherwise illegal under state and federal law, because the industrial hemp plant is the same species as the marijuana plant.

According to Averitt and other growers, industrial hemp could be the next frontier of North Carolina agriculture — a boost to the rural economy of a state where the countryside has languished while the cities have boomed.

The key difference between hemp and marijuana: Industrial hemp plants have little THC, the chemical that makes people high when they consume marijuana.

Hemp is grown for its fibers, seeds and oil. It’s used in thousands of manufactured products, such as textiles, paper, food, cosmetics, concrete and car parts.

Proponents see so much market potential that the U.S. Senate voted on June 28 to fully legalize industrial hemp farming. It’s a provision in this year’s edition of the federal Farm Bill. Senate Majority Leader Mitch McConnell of Kentucky wants it to happen, according to news accounts.

It’s unclear whether the U.S. House will agree.

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Meanwhile, just this month, a new store called the Hemp Farmacy opened on Person Street in downtown Fayetteville. Owners Tiffany and Raymond Toler see high sales potential for the hemp-derived products on the shelves. These include nutrition bars and supplements, lip balms, coffees and teas, bath bombs, lotions and cannabidiol oil, commonly called CBD oil.

The Hemp Farmacy chain, based in Wilmington, sources its products from American-grown hemp, marketing director Chelsea Wetherell said. The company has a research farm in eastern North Carolina to foster hemp production in this state.

The farmers hope hemp will become the next big cash crop, one that can provide alternative or additional revenue to traditional crops such as tobacco, cotton, grains and the ornamental plants that Averitt sells.

“It might stand to be a lot more profitable than the nursery,” Averitt said. “Anything — anything helps.”

But first, Averitt and other American farmers have to learn how to grow hemp in commercial quantities and quality. America stopped growing industrial hemp about 60 years ago. The knowledge and skills to do it have faded.

“People say we haven't grown it for a long time, that is true, but what is even more of a problem it that we only ever grew it for rough fiber for products like rope,” said Keith Edmisten, a professor of crop and soil sciences at North Carolina State University. “We have never grown it for oils, seed or finer textile products.” Different methods are used for those, he said.

A Congressional Research Service report issued in June about industrial hemp says the industry needs to “re-establish agricultural supply chains, breed varieties with modern attributes, upgrade harvesting equipment, modernize processing and manufacturing, and identify new market opportunities.”

Hemp researcher Kadie Britt of Virginia Tech said she has had difficulty finding much in current scientific literature about how to grow hemp in the United States. But she has found old texts.

One of the more comprehensive books she found is “Hemp (Cannabis sativa)” by S.S. Boyce. It was published in 1900.

American growers are consulting their counterparts in Canada and Europe, said hemp farmer Bert James of Homegrown Agriculture of Bethel, a town north of Greenville. Hemp has been legal in those countries for years, he said.

“We’re behind, but we don’t need to re-invent and waste a lot of time,” he said.

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North Carolina farmers are in their second year in modern times of legally raising hemp, albeit on a limited and tightly regulated basis. As of late June, 328 farmers in the state were licensed to grow it, up from 124 last year, when state licensing began.

Industrial hemp farming was illegal in the United States between 1970 and 2014.

“Under current U.S. drug policy, all cannabis varieties — including industrial hemp — are considered Schedule I controlled substances under the Controlled Substances Act,” agricultural policy specialist Renee Johnson wrote in the Congressional Research Service report on hemp.

The blanket prohibition overrode precedent that is older than the country.

“Hemp was widely grown in the United States from the colonial period into the mid-1800s,” Johnson said. “Fine and coarse fabrics, twine and paper from hemp were in common use.”

Records from the 1700s say North Carolina governors encouraged farmers to grow hemp. The colonial legislature in the 1760s offered a bounty for hemp production.

In the late 1800s, cotton began squeezing out hemp for clothing fabric, Johnson’s report to Congress says. Still, American hemp production continued into the mid-20th century.

In the early 1900s, 33 states passed anti-marijuana laws but still allowed hemp to be grown for medicinal and industrial use, she said. These were followed by the Marihuana Tax Act.

“The 1937 Marihuana Tax Act defined hemp as a narcotic drug, requiring that farmers growing hemp hold a federal registration and special tax stamp, effectively limiting further production expansion,” Johnson wrote.

World War II gave U.S.-grown industrial hemp a temporary boost.

America had been importing hemp from the Philippines and India. But, as a 1940s U.S. Department of Agriculture film called “Hemp for Victory” reported, “now with Philippine and East Indian sources of hemp in the hands of the Japanese, and shipment of jute (another fibrous plant) from India curtailed, American hemp must meet the needs of our Army and Navy, as well as our industries.”

The film said hemp was needed to make thread for military uniforms, twine, rope, fire hoses and parachute webbing.

“In 1942, 14,000 acres of fiber hemp were harvested in the United States. The goal for 1943 is 300,000 acres,” the film said.

American hemp production peaked in 1943 at more than 150 million pounds, according to Johnson, compared with around 1 million pounds per year prior to the war.

“By 1948, production had dropped back to 3 million pounds on 2,800 harvested acres, with no recorded production after the late 1950s,” Johnson wrote.

The federal Farm Bill of 2013, signed into law in early 2014, authorized hemp farming on an experimental basis to “determine whether hemp farming would be beneficial for American farmers and businesses,” says a summary of the law by the Vote Hemp advocacy organization, which wants to revive the industry.

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Today, more than 30 countries grow industrial hemp for commercial purposes. The United States imported $67.3 million of it in 2017, mostly from Canada, according to Johnson's report. That was down from $78.1 million in 2015.

American farmers grew 9,770 acres of hemp in 2016 and 25,541 acres in 2017, Johnson reported. Researchers have estimated farmers can gross $21,000 per acre from seeds and $12,500 from stalks, she said.

The North Carolina Industrial Hemp Association has told lawmakers that farmers in the state will make an estimated $25,000 to $30,000 per acre this year from hemp flowers.

In practice, 21st century American farmers are still learning whether and how they can make money, said David Johnson of Fayetteville. Johnson and his son, Lewis, have 400 plants on just under half an acre in Harnett County.

It cost more than $500 just to apply for a hemp grower license from the North Carolina Industrial Hemp Commission, David Johnson said.

Hemp seedlings cost $7 to $10 each, he said. Factor in irrigation equipment and other materials and expenses, and the cost can reach $15,000 to $16,000 per acre, not including labor.

And then there are unexpected problems that drive up the expense, Johnson said. He learned this past week that his crop has a mite infestation that is damaging the plants and his irrigation water is too acidic. He was trying to figure out how to eliminate the mites and reduce the acid level of the water.

“There better be some money at the end of this, when October gets here,” David Johnson said. “If there’s not some pretty good chunk of change there, then … it’s going to be hard-pressed to make it happen in North Carolina.”

Lewis Johnson is confident. He sees growing demand for CBD oil products for medicinal purposes.

“There’s already a couple pharmacies in North Carolina, and a couple different pain clinics that have partnered with those pharmacies,” he said.

Most North Carolina hemp farmers in 2017 pursued hemp seed production, said Edmisten of N.C. State University. “This year, there are more growers who are, in general, planting smaller acres for the higher value flower market,” with the flowers used to extract oils.

Averitt, the farmer in Robeson County, said he lost money last year when he grew 18 acres for seed production.

That crop was poor, Averitt said, because he planted it too late. He needed to plant his seeds in April, he said, but Drug Enforcement Administration regulations prevented him from getting his planting seeds until June.

The DEA’s restrictions were a problem statewide in 2017, said Bob Crumley, chairman of the hemp association. Despite the shortened growing season, the farmers were able to harvest 30 percent to 35 percent of what they otherwise could have produced, he said in a presentation in April to the state legislature’s Agriculture and Forestry Awareness Study Commission.

Averitt’s 2017 crop further suffered because corn earworm caterpillars destroyed about 30 percent of it in the field, he said. Earworms can burrow into hemp’s seeds and buds.

This year, Averitt has just 3 acres of cloned seedlings. He plans to harvest the plants for their flowers in September. These are to be processed for CBD oil.

Averitt will have a buyer because he is a member of the cooperative Bio-Regen. Farmers help one another learn to grow hemp, and the organization finds buyers.

Still, Averitt remains concerned about the corn earworm. He allowed graduate student Kadie Britt of Virginia Tech to put a moth trap in the middle of his field. Pheromones will lure the male moths.

The trap can’t do much to protect Averitt’s crop, but it's one of a dozen that Britt has set on farms to study the earworm’s behavior.

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Despite the setbacks and restrictions, farmers including Bob Crumley of the state Industrial Hemp Association have high confidence that the crop will boom in North Carolina. He believes the flower farmers will take in $20 million to $26.4 million this year, which doesn't include sales of the extracted oils or income from seeds and fiber.

The total state economic impact should be well above $100 million, Crumley told lawmakers.

“We’re bigger than tomatoes, already just this year,” Crumley said Tuesday. Hemp is running ahead of about a dozen other crops, he said.

“We’ll continue to inch our way up and inch our way up. I think it’s going to grow very, very, very substantially,” he said.

Crumley anticipates that the federal government will fully legalize industrial hemp in the near future and that the North Carolina legislature will quickly follow suit.

Regulations would still be required due to hemp’s physical similarity to marijuana, Crumley said. Otherwise “it would be chaos. It would be worse than chaos” for law enforcement, he said.

For example, testing requirements for THC content — the chemical that makes marijuana a psychotropic drug — should remain in place, Crumley said. Industrial hemp by law must have no more than 0.3 percent THC content. Marijuana can have 1 percent to 35 percent THC content.

Corporations are already investing in hemp, Crumley said. And once hemp production is fully legalized, he thinks Kentucky, Tennessee and North Carolina will be the nation’s top three hemp producers, as they once were before it became illegal.

Tobacco is still North Carolina’s top cash crop — $724 million last year. Not for long, Crumley predicts.

“Hemp will be bigger in North Carolina than tobacco is now,” he said.

Averitt said tobacco is in decline and sweet potato prices have gone down. He thinks hemp could be a much-needed, new source of revenue for North Carolina farmers.

“I have high hopes,” Averitt said. “I really hope it will become a sustainable, viable, high-return crop.”

 Staff writer Paul Woolverton can be reached at pwoolverton@fayobserver.com or 910-486-3512.