Growing Knowledge: As Utah Launches Medical Pot, Hemp Industry Looks Back On Year 1 | KUER 90.1

Growing Knowledge: As Utah Launches Medical Pot, Hemp Industry Looks Back On Year 1

Feb 17, 2020

On a recent cold and snowy day in Logan, Nathan Snow’s harvest was in full swing. He wore sunglasses to shield his eyes from rows and rows of bright lights growing hundreds and hundreds of bushy plants. This hemp “farm” is located inside a large, nondescript warehouse where the air smelled tropical and loamy. 

Snow admitted his line of work is still a little unconventional.

“I don’t tell too many people what I do really,” he said. “After work, when I’ve been touching the plants all day, that’s where the funny looks come in. I’m like ‘it’s not what you think, it’s not what you think.’”

Utah’s medical marijuana program is set to start on March 1, but local farmers already have a year under their belts working with marijuana’s sister plant, hemp. Both plants are a type of cannabis — they’re almost impossible to tell apart — but hemp can’t get users high. 

Nathan Snow checks fly paper at the Earthspring Organics grow facility in Logan on Dec. 6, 2019. The company used to grow salad greens, but once Utah began its hemp pilot program in late 2018, Earthspring switched to a hemp growing and processing operation.
Credit Leia Larsen

State and federal law require hemp growers to maintain low levels of THC, the psychoactive chemical that naturally occurs in all cannabis. The Utah Department of Agriculture and Food requires farmers to test their hemp crops. Plants with THC levels above .3% must be destroyed. 

Snow said that’s one of the most difficult things about growing the plant — seeing his hard work turned into compost right before the crop was ready to harvest and sell. 

“It’s kind of hard because ... that crop was about to come down,” he said. “And the state comes back to you, they’re like ‘It’s .37. Guess what, it’s got to be chopped.’”

Utah lawmakers approved a pilot program for commercial industrial hemp in November 2018, which means hemp farmers and processors have had some time to experiment with the plant — with mixed levels of success. 

“It’s a bit of the wild, wild west right now across the U.S.,” said Ira Crawford, CEO of Earthspring Organics. “Sometimes that’s good; sometimes that’s bad.”

 

A 'Learning Experience'

In 2019, the state Department of Agriculture issued licenses for 218 growers. But hemp isn’t the cash crop it was even a few years ago when states like Kentucky and Colorado led the way in legalizing it for adult use. Andrew Rigby, who directs the Utah’s medical marijuana and hemp programs, said he spent much last season managing growers’ expectations. 

“There's this aura, and this gold rush mentality behind industrial hemp that it can save the farm and it's a replacement crop for the future,” Rigby said. “The window for making millions of dollars on industrial hemp by planting it on a whim ... has passed.”

Rigby said many farmers lost money growing hemp in their first year. Some ended up with plant strains that aren’t adapted to Utah’s climate. Others, like Jayden Howell, had a hard time finding buyers. 

Jayden Howell assesses trimmings from his plants. He started growing hemp after he graduated from Utah State University. After a learning curve his first season, he's onto the next step in his business — selling his harvest.
Credit Matt Herp for KUER

Howell, 24, grew about 500 plants over the summer outside on his family’s vacation property in Levan, a small town 10 miles south of Nephi. A recent graduate from Utah State University, Howell said he had no growing experience, but hemp quickly became his passion.

“I walk my plants every day. I sing to them,” he said. “I'm one of those weird people.” 

Still, Howell had plenty of challenges during his first year of growing. First, he had to convince his conservative parents to let him grow hemp on their land. Then he had to fight off grasshoppers and fire ants, which took down two of his plants. Halfway through the season, local irrigation water switched from well water to surface water, throwing off the pH balance. 

“I was like, ‘Oh wow! There’s a lot of stuff to learn!’” Howell said.

Now it’s time for the biggest hurdle of all — to actually make money. Howell grows hemp for its smokable flower, which is legal to grow in Utah, but isn’t legal to consume here. He had to find buyers out of state. So far, Howell has sold about five pounds out of the 30 he harvested.

Howell admits he’s not breaking even, but he figures he’s paying for his education. 

“It’s a learning experience. This is a research program for us too, not just the state,” Howell said.

 

Market forces

Hemp can be used in all kinds of products — clothing, rope, even concrete. Our founding fathers, including George Washington and Thomas Jefferson, grew hemp to make clothes, paper and, possibly, the first American flags

Cannabis was outlawed in the 1930s, but Congress made hemp legal again with the 2018 farm bill, which opened the door for Utah’s pilot program. These days, hemp is mostly used for medicinal purposes. 

That’s how Darren Johnson markets the pure CBD distillate. The company he co-owns, Salt Lake City-based Wasatch Extraction, extracts the compound from hemp. One of about 60 Utah businesses to obtain extractor licenses last year, the company sells its product to retailers for use in salves, edibles and tinctures. 

At Wasatch Extraction in Salt Lake City, raw material waits to be processed into various CBD products. It takes dozens of pounds of biomass to extract one liter of CBD.
Credit Matt Herp for KUER

“It’s kind of a fun industry to work in. You’re taking something that was taboo and making it mainstream,” Johnson said. 

Like THC, CBD occurs naturally in cannabis, and fans of the product say it helps with pain and anxiety. 

A liter of pure CBD, which looks a lot like honey, can sell for $2,000 to $4,000, Johnson said. It takes 50 pounds of biomass just to get one liter. Johnson’s smokable buds sell for between $90 to $500 a pound.

Those prices fluctuate wildly depending on how much hemp floods the market, and right now there’s a deluge. U.S. hemp biomass wholesale prices are down by about 65% over the last six months, according to a January report from Hemp Benchmarks

Once it's been extracted, a liter of pure CBD can sell for $2,000 to $4,000.
Credit Matt Herp for KUER

Despite the challenges facing hemp growers around the nation, Hemp Benchmarks still expects the industry will continue to grow. It projects the hemp-CBD market will reach $2.25-$2.75 billion in 2020, compared to $1.1 billion last year.

Industry insiders say Utah could help add momentum to that growth as the state is the nutraceutical capital of the nation, churning out products like supplements, essential oils and juices. 

“I would say, just given how important and how large the nutraceutical industry in the state, that this would likely, in the future, be the dominant economic engine for CBD and hemp extracts,” said Loren Israelson, president of United Natural Products Alliance.

While some farmers might not choose to return to hemp this coming season, Rigby with the Utah Department of Agriculture and Food said he has little doubt that Utah can support a viable cannabis industry.

“Utah’s a great place to grow, it’s a great place to do business in general,” Rigby said. “I don’t 

doubt there will be a number of people who thrive here.”

Leia Larsen is an independent journalist based in Ogden.