NIHC Board Member Patricia Sheikh Brings International Trade Expertise to the U.S. Industrial Hemp Sector

 

We caught up with busy Patricia Sheikh, NIHC board member and Senior Vice President, Programs, for Roots of Peace, to discuss NIHC, diversity and the future of industrial hemp.

In her work in the agricultural sector, Roots of Peace is a non-profit organization, with headquarters in California, that helps conflict and post-conflict regions and countries. Their philosophy is to provide market-driven solutions tailored to farming communities of war-torn lands, serving as a catalyst for industry-wide development. By improving farm techniques, addressing supply chain gaps, and supporting local exporters in reaching high-value markets, the organization improves livelihoods and contributes to building peace in war-torn lands.

“The conflict area we are currently focused on is Afghanistan, and the post-conflict country is Vietnam. You would think we wouldn’t have to go there,” Sheikh says referring to Vietnam, “but there are still issues related weapons of war still in the ground that adversely impact smallholder farmers.”

“Root of Peace helps countries rebuild and modify agricultural systems,” she says. “We help them build back their agricultural economy – things like convert from one crop to another – then export it. We look at the full value chain, seed to table. Small holder farmers are not left out of the equation, and they get a return on their money.” A strong agricultural system helps a county increase economic independence and thereby reduce potential for future conflict.

Here is our interview with Sheikh.

What is your view of the work of NIHC, and how you came about being involved?
I am a retiree of Foreign Agricultural Service, USDA. When NIHC board chair Patrick Atagi was a political appointee under President George W. Bush, I got to know him. He was serving as Deputy Director, Intergovernmental Affairs, USDA. I was then Deputy Administrator, International Trade Policy, Foreign Agricultural Service, USDA. Our interactions go that far back.

When he launched NIHC, he thought of me for the board position because I know international trade very well. At that point in my career, I oversaw all international trade – mostly trade with Asia. Personally, I like working in the big markets like China, Japan and India.  Patrick knew that my background could prove beneficial once industrial hemp industry comes into full potential.

What inspired your work with hemp conferences, you have moderated and participated in several, how do events like this help hemp the industry?

I see the hemp commodity as a very important export. It has the ability like no other crop to revitalize the U.S. agricultural sector. I participated as the event moderator in the February 2021 Oregon State University Global Hemp Innovation Center’s National Hemp Symposium because it was an opportunity to hear from many of the sectors in which industrial hemp has great opportunity.

The crop spans many industries, and we heard from energy and biofuel, manufacturing, automotive and transportation, retail, apparel, health and beauty sectors – even the defense sector presented. I have never seen a crop like hemp and it’s exciting; we needed something that can boost our agricultural sector and hemp can do it.

We have to keep the conversation moving forward in the United States. China, the EU and Canada all have vibrant hemp programs. They didn’t experience a shutdown of the crop like the U.S. who made it illegal due to the drug aspect of the plant. We cannot be frightened by the work ahead to catch up; we must keep a steady pace. NIHC is a big part of that effort, especially on the regulatory and trade aspects due to the experience of the entire board and the NIHC team. Patrick wants board members to network and lend guidance on other advisory boards, representing the work of NIHC, when they arise.

What are your views of minorities and women in agriculture and how is it changing?

Ag is a very conservative industry. There are very few women at the top of agricultural companies or even on boards, as well as other minorities. As the first – not the only – woman in the NIHC board, it doesn’t bother me. I will offer suggestions in the future for other women to join our board if their experience fits the needs, but I have to say Patrick has been keen at making sure we have a diverse group, and we have a board of various backgrounds and ethnicities. NIHC is leading and paving a path forward.

To encourage hemp farming among diverse groups of people, including minorities, I think there has to be increased education about hemp. There is still so many misconceptions of hemp. I have to correct people on the product. I am not sure how informed African-American farmers and others are about this particular commodity.

I think seeing the potential in all these sectors mentioned at Oregon State University’s conference was so powerful for participants. It shows that that there is room for everyone. We warmly invite more people to the table.

Tell us about your work with former Ambassador from Zimbabwe to U.S. on hemp industry and other initiatives in which you may be involved in?

That is a very interesting question. Ambassador Mutembwa was Zimbabwe’s Ambassador to the United States. He was very familiar with hemp because of his country’s interest in ramping up growing this commodity.

The Ambassador was looking for people who wanted to invest in their country’s hemp production. Because of my background in developing countries and agricultural systems, we connected on that effort. They were not necessarily looking to export to U.S. since their natural market is the EU. He really saw, as a developing country, how hemp could help propel economic development in his country.

Unfortunately, the Ambassador has completed his assignment in U.S., and is now Zimbabwe’s Ambassador to Brussels. I am hoping the new U.S. Ambassador will pick up on the effort, but it is too early to tell.

Where do you see the industry in five years?

If we play our cards right and produce more positive messages about hemp– especially the farmers potential to grow hemp and monetarily profit from doing so – and additionally having a market for it which is still in development, the hemp industry will grow very large.

Unlike cotton and other crops, hemp doesn’t need as much water to grow,  It is a crop that is environmentally-friendly and as I have said previously it has a multitude of uses. We will get to a comfortable position for this commodity, it just will take time combined with consistent effort by leadership organizations such as the NIHC.

What are the pathways to a thriving industrial hemp economy?

One thing is advising government. We have begun that process as NIHC is serving on some advisory committees for U.S. government agencies that are addressing hemp and agriculture.

Positive safety initiatives is another. We must get the FDA to engage and intensify its efforts. To ensure the consumer is safe when hemp is used in products they ingest or use topically. Some products are in the marketplace that have not been fully vetted. It is a great sign that these are appealing to the public, but we need consistent standards set by the federal government to continue to grow the marketplace.

We need to keep interactions with Congress moving forward. Hemp has bipartisan support, as seen by both sides overwhelmingly voting in favor of the Farm Bill. As you know recently, it has been a challenge to obtain bi-partisan support for legislation.

States that are hesitant will come along once they see momentum building and factual support for this commodity. They will have to.

Getting factual data is a must. It is exciting to see University’s like Oregon State gearing up their research so we can have this data. Having our own data will corroborate what we know from the European research already available.

Trade competition is a healthy instigator. China is moving full steam ahead. EU and Canada are too. This should inspire action from the U.S.

Are you excited to attend the NIHC 2021 Hemp Business Summit?

I was at the first summit in 2019, where we had to turn people away because we had exceeded our capacity level. It was a great success and there was so much enthusiasm and support among attendees. I look forward to the next one in November, and I know the information shared will take us further along this exciting journey. The conference will benefit anyone in the industry who is looking at the potential of hemp for their company or for their state.

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Safe Banking and Hemp: Working Toward Resolution

At present, most if not all banking service providers take a risk-management approach to hemp business customers that presumes that they may be held liable for their clients’ compliance with USDA regulatory requirements, even though these laws have no explicit bearing on the legality of hemp in commerce. (All hemp is legal for commerce nationwide if it meets the statutory definition of hemp, without regard to the USDA Rule).

This creates an onerous burden on banking service providers and their clients that is a significant (perhaps the most significant) factor contributing to the refusal of many providers to offer services to hemp businesses, and explains the excessive fees charged by those providers who do choose to offer them. Thousands of hemp business all across the country contend with this issue, particularly with respect to obtaining payment processing for credit card transactions, which are the lifeblood for most hemp businesses.

These problems arise largely from the duality in current law pertaining to hemp: one legal standard for hemp products—the Federal definition of hemp in statute—and another for hemp production in the U.S.—the USDA Hemp Rule, which applies only for production on a small percentage of acres licensed for such production.

While NIHC remains hopeful that legislation will soon rectify this duality by redefining hemp such that the USDA Rule will be revised to reflect the same legal standard, this has yet to occur and this duality will nevertheless persist for products made before such a revision is enacted.

NIHC strongly supports the normalization of banking services for hemp businesses, and we welcome the concerted effort by proponents of the SAFE Banking Act to achieve this through the bill’s hemp provisions (Section 11).  Despite the unambiguous Federal legalization of hemp in 2018, businesses engaged in hemp commerce continue to face great difficulty accessing banking services due to the perceived lack of regulatory clarity. Even when businesses are able to access banking services, the costs are exorbitant—much like the struggles faced by businesses engaged in marijuana, which remains illegal under Federal law. By providing regulatory clarity to banking services providers, the bill would go a long way toward relieving these difficulties.

However, we are concerned that the bill’s definition of ‘hemp-related legitimate business’ will cause the bill to fall short in achieving this desired outcome. This is because the definition will exclude businesses that buy or sell hemp produced on 76% of the acres licensed for hemp nationwide and as hemp produced outside the U.S. That would significantly hinder the industry’s domestic growth and potentially erecting a technical barrier to trade (TBT) in hemp on the export market as well.

The problem presented by the proposed legislation is that hemp produced on 76% of the acres licensed for hemp nationwide in 2020 (including 4 of the country’s 5 largest state programs) is not subject to USDA regulations pursuant to the 2018 Farm Bill because they are in states currently under 2014 Farm Bill authorities for hemp production. Even after the 2014 authorities expire at the end of 2021 (unless Congress extends them again), hemp goods that were produced under 2014 authorities will remain lawfully in commerce long thereafter. Hemp produced outside the U.S. is also not subject to the USDA regulations.

Even though the definition states “where applicable,” this re-introduces the regulatory uncertainty that caused banking problem in the first place. Banking services will either continue to shun hemp businesses, or incur excessive costs for risk mitigation, based on the perceived hazard that the bill’s protections may not apply where the business engages in hemp whose production is not subject to the USDA regulations.

We also see cases where regulators themselves adopt a similar risk-mitigation posture. A case in point is the policy promulgated by USDA Rural Development that excludes hemp producers in 2014 Farm Bill states from eligibility for funding under the Value-Added Producers Grant program, thus depriving most of the industry and state economies of much-needed investment in hemp processing capacity.

If regulations issued by USDA are vulnerable to such misinterpretation, then regulations by other agencies with far less understanding of these complexities (such as those that will administer the SAFE Banking Act) are all too likely.

Ironically, without these technical corrections, the SAFE Banking Act could normalize banking services for legitimate marijuana commerce and fail to do so for most legitimate hemp commerce.

The NIHC continues to work with policy makers in both the House and the Senate to look for ways to make these technical changes become law.

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Hemp Keeps Up Quick Pace

The hemp industry is moving at the speed of change.

Our industry has faced its own unique set of challenges since the passage of the 2018 farm bill and these growing pains are to be expected. NIHC’s core mission is to be your collective voice in front of lawmakers and regulators. Yet, NIHC can’t be your voice without your input and participation to solve these hurdles, current and new.

Some issues have yet to be resolved.

For instance, businesses in the hemp economy need equal access to the banking sector. The CBD market needs regulatory certainty; specifically whether or not CBD can be sold as food, or a supplement, or perhaps both? Because hemp looks like marijuana; we need safe transit resolved because on the spot, law enforcement can’t tell the difference. This is why we’re in constant conversations in Washington, DC and with states about testing and proper documentation. This will ensure that those involved in hemp commerce, including law enforcement and the financial markets, can distinguish between hemp and marijuana. This includes the controversial Delta-8.

The USDA continues to promulgate approvals for state programs to license farmers while other federal agencies lag behind in regulations for downstream businesses. We need certainty, but we need patience and a thoughtful approach. Last years’ election brought significant change to Washington with a new President who is still filling important roles and a new Congress. Patience is a virtue.

We are excited to see and be a part of the National Association of State Departments of Agriculture (NASDA) initiative on one percent. But what our industry needs is a coordinated state and federal strategy. We still have state legislators introducing a patchwork of laws governing our industry at the local level all across the country.

 

What our industry needs is a coordinated state and federal strategy. We still have state legislators introducing a patchwork of laws governing our industry at the local level all across the country.

 

To illustrate, here are just two of many examples of what is happening at the state level.

In New York state, Governor Cuomo recently signed into law an adult use marijuana legislation which creates a new state regulatory agency for both hemp and cannabis. That might make it easier to have one regulatory agency with jurisdiction over hemp and cannabis, but we need to better understand the role of the state department of agriculture. We also need to answer the question, what will happen to the hemp industry? It now appears it’s more lucrative to grow high-THC products in the second largest state in the country. Is the compromise on smokable hemp (that smokable hemp can only be sold in dispensaries) a positive thing for the hemp industry? Only time will tell.

In Alabama, there is a new bill that has been introduced in the state Senate that would add delta-8 and delta-10 to the list of controlled substances in the state. We can applaud the Alabama state legislature for trying to tackle the problem of delta-8. But, we believe the Alabama state senate is going down the wrong road to solve an easy problem. Delta-8 THC, per the 2018 farm bill, is a legal part of the hemp plant that exists in the plant’s natural form in only a minuscule amount that has no psychoactive effect. The problem is that some in our industry are taking advantage of a loophole in the law to manufacture artificially high concentrations of delta-8 and add them to hemp products, resulting in levels of 10% delta-8 and higher to create a psychoactive effect that would not occur otherwise. Changing the statutory definition of hemp from .3 percent delta-9 THC to one percent total THC, as has been proposed by NASDA and other stakeholders, would eliminate this loophole and prevent psychoactive delta-8 THC products from entering the market as hemp or any other non-controlled substance.

NIHC is a growing by the day.

We have a ten-year plan and have consistently exceeded our advocacy and policy goals in our nation’s Capitol. In our plans, our policy and operating budget didn’t include state advocacy. That means we don’t have the full-time staff yet hired to monitor legislation at the state level. We have been working since the beginning of the year to build and execute a strategy for successful state advocacy, it just needs to be resourced.

We realize there is a lot going on in our industry and we’d love to have NIHC member feedback on what we should be engaging on in your specific state. If you think we need to engage on a particular issue, please email us at info@hempindustrial.com.

If you haven’t become a member yet, please consider joining NIHC so we can all work better together. 

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Putting the U.S. Industrial Hemp Industry on the World Map

An Interview with NIHC’s Kevin Latner

“We have developed a comprehensive plan based on NIHC vision and mission to promote U.S. worldwide,” explains Kevin Latner, NIHC’s Senior Vice President of Trade and Marketing. “Policy initiatives, trade facilitation, supply chain development and market development will provide the framework for U.S. export success.”

In November 2020, USDA’s Foreign Agricultural Service (FAS) notified the National Industrial Hemp Council (NIHC) that it had been approved as a recipient of Market Access Program (MAP) funds. The funding, should be available by April this year, provides NIHC the ability to grow the international market for the U.S. hemp industry. This will allow the hemp industry to develop program success such as other industries (e.g., peanuts, cotton, beer and wine, raisins, poultry and eggs, grains, dairy) have created in international trade opportunities for their industries through MAP programming.

Traditionally, MAP programming includes developing trade policy, trade facilitation, supply chain development, and market development. What will programming for NIHC look like? “As a new to market product and a first-year program NIHC, our first priority will be identifying market opportunities, including priority markets, and communicating about the quality and availability of U.S. product to those markets.”

IMAGES FROM ISTOCKPHOTO.COM

Overview

Latner is spearheading the initiative and for good reason. He is an experienced executive leader, a change strategist and former U.S. diplomat. He has been in international agriculture and marketing for over 30 years delivering organizational leadership and operational excellence as a senior government, association and private sector leader. ​Specifically, his experience working at FAS for 15 years and running MAP programs for large participants provides NIHC the expertise to launch and maintain this initiative.

MAP programs extend to virtually every corner of the globe, helping to build markets for a wide variety U.S. farm and food products. FAS provides cost-share assistance to eligible U.S. organizations for activities such as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research and technical assistance. When MAP funds are used for generic marketing and promotion, participants must contribute a minimum 10-percent match. For promotion of branded products, a dollar-for-dollar match is required.

It is quite an accomplishment to receive MAP funding. There is only $175 million distributed amongst competitive applicants. The requirements are rigorous to get and maintain the funding. “It is the widely recognized as one of the best public-private partnerships,” says Latner. MAP programs benefits not just an individual company, but the entire industry by leveling the playing field. Individual companies benefit through greater access and market opportunities internationally. According to market research by Informa, it was concluded that the return on investment for Market Access Program funds is 30-35 to 1.

Rigorous application criteria and a comprehensive application process ensures that funds are allocated through a competitive process. Applications must understand their markets, be able to report on trade and have developed meaningful performance metrics to evaluate program results. “In addition, NIHC’s leadership is bringing the industry together behind a unified banner on trade development that has been a critical component to securing funding,” explains Latner. “We look forward to continuing to work cooperatively with stakeholders as we use this funding on behalf of the industry.”

Export Readiness – Are You Ready?

While the appeal to reap the benefits of a 35-1 return on investment is attractive, Latner says you must be qualified to navigate international business. If you need help determining your export readiness, individual companies work through the NIHC, state departments of agriculture or the state regional trade groups (i.e., FoodExport, the Southern U.S. Trade Associationand the Western U.S. Trade Association). These organizations will help direct companies to international trade shows where business relationships can be built. Some organizations will even provide translators, offer translation services for marketing materials, and other support.

With the pandemic, business-building programming is sporadic, but NIHC’s long-term plans include trade missions and sponsoring international trade shows. “In a new industry, like hemp, the best way to do this is get in front of people to establish trust in relationships. We want to help create the marketplace to offer business-to-business marketing.”

The demand for hemp worldwide is growing, notes Latner. “Last year, Bloomberg estimated that by 2023 the hemp industry would be a $25 billion global market. NIHC’s implementation of the MAP program will allow the U.S. industry to communicate to government about market access challenges, better understand market opportunities and create business to business marketing opportunities,” he says.

Ultimately, NIHC’s implementation of the MAP will build market development opportunities for U.S. hemp exports through education and communication to government, business and, long-term, even consumer.

To ensure industry-focused programming, NIHC has a marketing subcommittee that provides strategic guidance on long-term goals and reviews implementation. “The committee provides critical input and represents the diversity of the hemp industry,” Latner explains.

More information will be coming throughout the year on MAP efforts. If your company has an interest in doing international business, now is the time to start planning ahead!

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“Hemp Industry is a Solid Product and a Rapidly Growing Market” – An interview with Doug Farquhar

NIHC caught up with board member Doug Farquhar, J.D.,to discuss his involvement in the council and the industry. He is an attorney with close to 30 years’ experience working with policy makers on environmental and health issues, primarily working with state legislatures.

In his prior work, for 21 years Mr. Farquhar directed the Environmental Health Program at the National Conference of State Legislatures, where he worked on the issue of cannabis edibles. The EHP performs legislative analysis and outreach on state and federal environmental, health and trade laws; focusing on the delegation and authorization of federal and state laws; and provides legal and technical assistance to state legislators and agency staff on state, federal and international environmental, environmental health, and trade policies. He also has provided expert testimony before state legislative committees and task forces; reviews and comments on legislation and regulations, drafts memos, articles and books on state environmental health policies; and represents state interests before federal and international bodies.
As director of Environmental Health he worked closely with federal counterparts at the Food and Drug Administration (FDA), U.S. Department of Agriculture (USDA), Centers for Disease Control and Prevention (CDC), U.S. Environmental Protection Agency (EPA), Department of Housing and Urban Development (HUD), and the Commission for Environmental Cooperation (CEC).

Now, he is currently Director of Government Affairs for the National Environmental Health Association.

What about the industrial hemp industry has compelled your involvement with NIHC?

This industry really appeals to me as an exciting emerging area; it is a rare thing to be on ground level of an industry such as hemp and cannabis provides.

It was very much untouched from a state level until the passage of 2018 Farm Bill allowing hemp to be sold and declassified as a schedule 1 drug. This opened a whole avenue for industrial hemp. It is a rare opportunity.

I have worked on the state level in health policies for a good portion of my career. It is at the state levels that the industry will have a chance to thrive. And, I think there is real opportunity for NIHC to 1) help states know how to track what they are doing and 2) prepare states on how to address the issues.

“NIHC has a clear role in creating opportunity in the marketplace though educating lawmakers and regulators on intended and unintended consequences of certain legislation. They can navigate the way through many of the agencies that have a card in the hemp deck to play.”

How can your experience help NIHC drive the hemp industry forward?

The federal government will do some of the work, but it primarily lies with the state and local governments to do most of the heavy lifting, which is where my expertise lies. State legislators want hemp to grow as an industry and want to promote it as a sustaining crop for their state. Yet, there are still so many unknowns with it that need to be worked through.

The state-to-state issue is also working itself out. It would normally take a federal law to bring about swift and sustainable state to state harmonization, but Congress typically hates to do that. They usually allow each state to work out issues within their boundaries when there is no overarching need for federal intervention. Hemp does not have a public health issue attached to it, for instance, that would necessitate such federal action.

But to give you an example of how the federal government couldcome into play in states’ harmonization, we can look at the labeling on biotechnology. It wasn’t until Vermont became the first state to make it mandatory by law that Congress that it passed their own law in a matter of weeks. There was direct incentive to harmonize biotechnology, where hemp doesn’t provide that immediate need right now. I really don’t see the federal government regulating hemp, at least for now.

States need to address industrial hemp from a marketing point of view. NIHC and the checkoff program can help.

If hemp is restricted on how it is grown and sold, people will not want to do it. Most importantly, those who would normally invest in industry-wide growth of new products will invest in tight regulatory environments. It is too risky. Plus, there is lack of available data to inspire what investors, farmers and producers they cando. These were some of the problems we saw with the edible cannabis issue that we had to overcome.

Early on, the state of north Dakota conducted a huge effort to get the ag community to grow hemp. They saw it as a viable market and encouraged the farmers to grow hemp. They did all kinds of stuff to encourage it, but the then-federal restrictions held it back. The barrier is now removed with the 2018 Farm Bill, but there is still work to do. The states have to get busy forming their programs.

What is the role of NIHC from your perspective?

NIHC has a clear role in creating opportunity in the marketplace though educating lawmakers and regulators on intended and unintended consequences of certain legislation. They can navigate the way through many of the agencies that have a card in the hemp deck to play.

From an environmental perspective, the growing of hemp is an extremely good product for agriculture. Whatever we can do to encourage this marketplace will be beneficial for farmers and for consumers. It is a very viable ag product, which is why the states are so interested in it. It will grow with the marketing and promotion of it, which NIHC can also play a critical role though the promotion of the checkoff program.

NIHC can be a guiding force as the industry evolves and matures. We don’t know what we don’t know yet, such as what pesticides are best and which fertilizers are suited for hemp. From an ag standpoint, there is much to learn, and data is coming sparingly. But there is no doubt we will learn what will make hemp industry prosper; people will figure it out.

What do you think is the most important aspect concerning the industrial hemp industry today?

Its growth and marketing. Getting it out there and people using it for products. Showing that it isa viable product. Breaking the stigma for investors to contribute. Anything to get it out there and get it known. The wonderful thing is that it does not have issues attached to it that could make it problematic from a public health and environmental standpoint, both which can be huge obstacles in other circumstances like we saw with genetically-modified foods.

There needs to be a proof of product that using hemp is better than what is currently being used.

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Member Spotlight: New West Genetics

It is all about being in the right state at the right time.

New West Genetics is in the business of providing farmers with high quality hemp seed produced for grain, cannabinoids, and fiber since the opportunity opened in 2014 in the state of Colorado, the first to open its marketplace. Each variety has its own unique genetic profile in order to create a quality product. Each is backed by 7 years of industry research and development (a lifetime in this industry), plus over 20+ years each of Ag experience from the founding partners, Wendy Mosher, president/CEO, Dr. John McKay, Chief Scientific Officer (as well as Professor of Plant Evolutionary Genomics at Colorado State University) and Dr. Rich Fletcher, chief technology officer and director of breeding.

Yet, you might say that New West Genetics is as much of a technology company as it is an agricultural one. NWG uses genomic technology and data-driven discovery to create large-scale, harvestable hemp, greatly enhancing the sustainability of the industry and paving the way for large-scale product development.

NIHC caught up with Wendy Mosher to discuss her company, the industry and her thoughts on the work of NIHC.

I want the U.S. to be the leader of all things hemp. We have pushed this industry farther than any other country. We need to maintain that edge. We have got to keep pushing.

Tell us about your early-adaptor status to the hemp industry.

In 2014, we saw the opportunity unfolding. Because of my partners’ experience in breeding and genetics,  we knew what needed to be done and how long it takes. Colorado’s Amendment 64 mandated the state create a regulatory system for hemp, then the 2014 Farm Bill allowed R&D on hemp, which created the opportunity to launch New West Genetics.

We were attracted to hemp for all the reasons everyone else is, but we knew the plant needed tons of improvements, and still is evolving, which is exciting to us.

Our company believes in in multipurpose varieties, we license to larger CPG or processing companies, as well as sell seed direct to the farmers. We work closely with farmers and processors to make a positive impact for both.

As an early adopter, we like to think we have a premiere advantage, we had a head start. Breeding quality genetics takes time, the more cycles you select within, the more stable and reliable your variety becomes. Our product is not a strain, we produce varieties.

 

What value do you see in being a member of NIHC (and what inspired you to join)?

I appreciate their history and experience on Capitol Hill and in agriculture. There’s no other hemp industry organization today that has more experience within the regulatory side with the USDA and other agencies. They have filled a critical hole in the industry.

We were an original member of the organization, speaking a lot with chair Patrick Atagi as he was developing the NIHC mission. We saw the value in the working experience the Council has within regulatory bodies. From our experience, we understand that just knowing how all these federal organizations work is, in itself, a huge hurdle, which NIHC brings to the industry.

From our perspective, we have witnessed the collapse of pricing, the arrival at commodity like dynamics, which laid the burden primarily on the farmer. They bore the brunt of the CBD crash and other dips in the development of the marketplace. In my opinion, I want to see the industry come together to equally share some of that burden of a nascent industry by talking with transparency around the supply chain, with all the players, including processors, contributing to building the industry we all know has so much potential. That comes with building relationships and finding levels of trust that have been lacking in our history.

 

What value and services does your company bring to the industrial hemp industry?

Quite simply, New West Genetics creates certified U.S. adapted hemp varieties tailored to various market traits.

On a more complex note, we also provide the agronomic knowledge we’ve gained over the last 7 years in hemp and over many more years from other crops – we support our customers on the agronomic level to ensure their best opportunity for success. We ask about their planting time, talk about what equipment they have, what plate for planting drill they use, row spacing expectations, and help them with inputs. We also visit our farm clients at least once a season in addition to video calls. We have learned a lot having seven years of planting and research (in the greenhouse in winter and on acreage in summer) working with the individual needs and harvest expectations of the farmers and pass that knowledge back to the farmers.

From your perspective, what is the most important aspect concerning the industrial hemp industry today?

Without a doubt, market and supply chain development for grain and fiber, and regulatory movement.

The full potential of industrial hemp is yet to be realized because it is still new. There is a lot of opportunity to utilize protein and lipids, but we are all still learning. It is clear that the consumer wants this. I believe we are at a tipping point. They want it on the shelf, whether they are educated about it or it is just trendy is another discussion. Either way a strong and growing demand is clearly evident.

I have more seed than there are growers for it for the marketplace. There are two main issues concerning the industry right now from our perspective.

  • Regulations stifling the industry is ultimately the largest constraining issue. Larger companies who are positioned in the market, and new players waiting to large investments to the table, want to see the regulatory pathway clear. Ultimately, the FDA needs to approve grain across animal species and at the very least sanction the use of CBD as a dietary supplement.
  • Relatedly, the supply chain needs work – once that regulatory piece opens up, we as an industry need to be ready to scale. We have taken care of the genetics piece, now we need to see logistics, elevators, seed conditioners, scaled fiber processing, grain ingredient advancements, etc. Such an exciting time, every single one of these is being worked on, we just need to be sure we’re all staying in touch and collaborate on needs and progress, so we can create strong relationships that will be ready to serve these larger CPG companies.

Let me be clear, I want the U.S. to be the leader of all things hemp. We have pushed this industry farther than any other country. We need to maintain that edge. We have got to keep pushing. Other international players are already making strides quickly, and if we don’t move expediently, we could lose our edge.

How is your organization helping to move the industrial hemp industry forward?

New West Genetics is working hard to lay a strong foundation for the industry – by providing the first link in the supply chain – stable genetics. In addition, our R&D team has been cultivating for multiple seasons a year for 7 years, thus have one of the strongest agronomic understandings, which we are happy to share with producers.

We also spend countless hours shoring up the supply chain side, including downstream market developments. Much of my time is devoted to this – famers need a place to take their crops – but the market is still nascent, as I stated earlier. So, it is essential we spend time educating medium and larger CPG and processing companies on the value of hemp, both for its nutrition and sustainability. There is no other crop that can compete on both of those fronts.

 

Your website states “We are transforming the hemp industry by creating the most reliable, premium, proprietary hemp seed that reduces risk, increases yield, and enables sustainable large-scale production.” How you are accomplishing this?

We accomplish this by applying our expertise in agriculture and our dedication to data-based claims – we boast the largest, most accomplished team in genetics and agribusiness – over 150 years of experience bringing new crops to market.

To see more about New West Genetics, visit https://newwestgenetics.com/meet-the-team/

Check out the video from NWG’s last harvest festival:

https://www.youtube.com/watch?v=pzu2-Mc-Uyo&feature=emb_logo

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Getting to Know NIHC Chief Economist Beau Whitney, Whitney Economics

“While the higher THC market is really sexy, the industrial side is transformational.”

 

Beau Whitney of Whitney Economics is the NIHC Chief Economist. He closely follows the entire cannabis marketplace; medical adult-use and industrial. His foray began by creating data

in the west coast medicinal cannabis sector, then adult-use and ultimately in industrial. It has evolved into a focus on hemp as a grain commodity, where he sees the most significant potential in the coming years.

Drawing upon his previous hi-tech and supply chain experience, as well as agricultural and economic development analysis expertise, he gained operational knowledge by designing and implementing notable efficiencies into the cultivation, extraction, edible manufacturing, wholesale and retail distribution operations of a vertically integrated cannabis operation for a large scale operator.

Now focusing on data and analysis, Whitney has established himself as a leading economist in the hemp and cannabis industries with clientele in North America, Europe, Asia, The Middle East, Africa and South America.

Whitney took some time to discuss his support of NIHC, and how data can help the association’s industry advocates clear up regulatory and legislative ambiguities.

 

How is your company helping to move the industrial hemp industry forward?

Our mission is to provide the industry the data and predictive insights they need to make informed decisions. With our data we can help the industry lay the foundation to build a thriving sustainable market, as a global player.

 

What value do you see in being a member of NIHC?

I enjoy the collaborative participation as NIHC Chief Economist and serving on NIHC committees. In my work in the last 7 years, we are approaching the industry with similar mindsets, so there are synergies.

With the prior levels of experience that is present in the organization’s leaders and volunteers, the NIHC has the ability to impact, influence and shape overall policy on a high level. This is very important.

NIHC has been able to get data highlighting vital issues directly in front of federal regulators. The industry needs this critical advocacy, which is focused on industry viability, education and sustainability, and articulating on issues confronting farmers, cultivators, producers and manufacturers. This is half of the battle.

I believe when we can interject real data with compelling education, then legislators can make informed decisions that help all the stakeholders to move the industry forward. NIHC’s experience advocating for agricultural, as well as the ability to look at the global market, not just U.S., is exactly what the industry needs right now. Vision to see the bigger picture.

 

Grain uses are a game changer.

Why is data important and how can it help the industrial hemp industry?

Data shows trends and identifies potential successes and shortfalls based on historical evidence. I try to leverage that data to forecast where the opportunities will be in the future. In the beginning, I saw that no one was fighting for the farmer, so I went deeper into the data, collecting information through comprehensive industry surveys so that I could create benchmarks that we could track over time. The goal was to help the farmers use data to help operate businesses and scale.

My goal is to map out the entire hemp value chain so operators can understand their role in the industry. It also has helped organizations like NIHC to present accurate views to legislators.

As an observation, I would like to see industrial hemp growers become more business-minded. The numbers show that this is a real weakness. This might be where NIHC can help their members network to understand the business, and to connect the dots throughout the chain.

Since 2019, growers have typically planted crops without arranged buyers – a basic business function – with 65% of them over the past two seasons not able to bring their products to market. This is several hundred thousand acres of hemp.

In my research I found that pre-2020 harvest, there was approximately 135,000 million pounds of excess biomass. That is raw material without a place to go. It seems that farmers did not do their business 101 homework before entering into this space.

Some didn’t even know how to harvest. They did not have the skills to scale. They were unsure how to grow from 1,000 sq. ft. to 25 acres, basically from a hobby grower to commercial operator. Some did not even know how to harvest crops at this scale. How were they going to harvest 25 acres by hand?

Now, in the “second season” for some of the veterans, we are seeing decline in markets and acreage, where some farmers did not renew their licenses, some scaled back their operations, or some renewed simply to sell their product from last season.

Farmers need access to buyers in order to sell their harvest to processors, who, in turn can sell the product manufacturers. This are the steps to building a credible thriving marketplace of products. In earlier days farmers were mostly taken advantage of by unscrupulous brokers. Hopefully, as the market matures farmers and processors will become more savvy. What is really required is for all participants in hemp to really to understand the value chain for hemp.

Grain uses are a game changer.

Most of the previous hemp supply chain was focused on CBD-related products, but I am not forecasting that to happen much longer. In 2020, CBD was 82% of the market to the 13% for grain and 5% for fiber. I see these numbers swapping in the near future.

Grain is forecasted to overtake CBD in terms of acres licensed by 2023. Hemp for animal feed is in the FDA for approval process right now. Once this is approved, hemp for animal feed will increase opportunities for farmers and processors.

Fiber is still in is infant stages. Degumming process is an issue, but once it able to be supported domestically, the fiber market will grow. Automotive and textile industry uses are emerging. This too, will surpass CBD in terms of market growth and opportunity.

 

From the data, what are the most important needs of the hemp industry today?

In terms of what is most needed, it would be:

1) Policy deployment should be flexible and adaptable for a dynamic market, on both federal and state levels. It is too rigid right now and is actually suppressing the industry. If it becomes too oppressive, the industry will lose investor confidence.

2) Regulators have created current policies coming forth that are ineffective. We need to clear up the murkiness. The law is crystal clear: Hemp is an agricultural product and should be regulated as such. The current ambiguity is keeping much-needed investors from bringing in the resources to grow the industry, there is too much risk involved to bring a product to market, only to have it potentially deemed illegal.

3) The industry really needs infrastructural development so it can scale up to mass production. Farmers, processors and manufacturers should not enter a space unless they know the entire value chain business model they want to follow.

 

Participation in the process and being a voice in big issues such as testing protocols, especially for the smaller farmers, is important. Large commercial operators will have it all in house, but smaller farmers need to express their issues as well.

How can industrial hemp growers be a part of the solution?

The key for success is looking at the data, being involved in organizations like the NIHC, having a relationship with the state’s Department of Agriculture and getting to know your neighbors.

Participation in the process and being a voice in big issues such as testing protocols, especially for the smaller farmers, is important. Large commercial operators will have it all in house, but smaller farmers need to express their issues as well.

Smaller farmers need to pool resources, for example, in a cooperative model, to collectively drive scale to compete with the large players. This is actually starting to take shape now. Local cooperatives or hemp campuses will offer the services needed for testing. Whitney Economics has met with many economic development agencies to help educate them about hemp and how to successfully support the industry.

Right now, many successful hemp projects involve public/private partnerships. A private company will do research on deploying and scaling hemp and the state provides the funding to do it. There is usually a sponsoring university and industry associations, all invested in critical in development of that state’s industry. Then it is given back to the state to run.

The biggest wildcard issue industry-wide is a lack of money. Investors are waiting for clarity on the regulations before they enter and drive end-user products, which will drive a demand for supply. Investment money is like oxygen for the industry and without it, the development of the industry will stall.

However, given that regulation is unavoidable, the industry has to understand how to operate within regulations and, rather than stifle the market, the regulatory need to support and protect the U.S. marketplace. otherwise it will be overrun by suppliers from other countries. It simply takes education, partnership and creative flexible regulations.

Even with all of these challenges in the short run, farmers and processors will survive (maybe not all of them), but from my perspective, the long-term outlook is extremely bright.

Visit Whitney Economics.

DOWNLOAD WHITNEY ECONOMICS RECENT HEMP REPORT

[pdf-embedder url=”https://hempindustrial.com/wp-content/uploads/2021/02/Whitney-Economics-Hemp-Cultivation-Report-2020-Executive-Summary.pdf” title=”Whitney Economics Hemp Cultivation Report 2020 – Executive Summary”]

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NIHC on RFD-TV The Magazine

 

The National Industrial Hemp Council made an appearance on RFD-TV The Magazine (www.RFDTV.com) this week reporting on the Hemp Checkoff program. Board member John Johnson, principal of Agricola, LLC, was interviewed on the overwhelming support and plans for the program. He discussed the merits of the Hemp Checkoff Program, including support from 8 out of 10 farmers according to the recent NIHC recent survey.

“We put the survey out, and 80% of folks felt that we need some time of program to promote consumer education about hemp, product education on hemp, and research into a whole variety of issues for hemp production and hemp for their processing,” Johnson says.

“75% or so were comfortable with assessment, minimal assessment, and see that as a valuable use of their dollars. This coincides with an Texas A&M found in a study several years ago that checkoffs return back to a farm $3 to $17 for every $1 invested.”

Click on video below to view the interview:
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Getting to Know NIHC Member Rick Fox

 

NIHC Member Rick Fox

Owner, Meristem Farms, LLC

Morrisville, VT

 

Herrick (“Rick”) Fox has been a member of the NIHC since its inception and serves as co-chair of the NIHC Government Relations committee (GAC), with good reason. As owner of Meristem Farms, located in Vermont, he has an interest in securing a sound policy and regulatory foundation for hemp farms of all shapes and sizes, including smaller and independent farms like his, and he also has 15 years of policy, regulatory and management experience in USDA.

Prior to starting Meristem Farms, Rick finished his 15-year career at USDA as an executive in USDA’s Foreign Agricultural Service, leading a division in agricultural capacity-building. Before that, being a forester by profession, he worked with USDA Forest Service, first in land management on National Forests and later in forest policy with senior USDA officials and the U.S. Senate Committee on Agriculture. He also served as policy expert for USAID capacity-building programs in Russia and the Republic of Georgia, and in the 1990s he worked in Russia for 6 years on conservation issues and forest science research in Siberia and the Russian Far East.

Here is more about Rick, his operation, and his thoughts on NIHC’s potential.

 

Tell us a bit about your business.

We grow and manufacture specialty hemp flower products in Northern Vermont. We focus on bringing out the character of the plant and the land through the distinctive aromatic profiles of our varieties and the growing conditions in our particular neck of the woods.

My wife, Jen Daniels and I founded the company with a strong land ethic.  She’s a landscape architect and I’m a forester, and we both decided to leave the Federal government wanting to do something that more directly connects people with the land… what better way to do that than farm hemp for people’s health?  So we really try to focus on what makes each variety special with the land and microclimate where we farm.  Harvest season in Vermont is amazing, and we’re lucky to have regulations in Vermont that allow us to make the most of it.

 

How has your USDA experience helped you and the NIHC?

I was with USDA for 15 years, in a variety of management, rulemaking and senior policy positions, and I was lucky to detail to the Senate Ag Committee to help with the 2014 Farm Bill as well. Alongside helping Jen run our company, I know there aren’t many other folks in hemp farming with a USDA policy background, and fewer still who also have a background in science and statistics. So, I volunteer as much time as I can helping farmers, regulators and policymakers understand one another’s perspectives and the technical details that are critical to these regulations, in hopes that we can get better policy outcomes than what’s been put out there so far.  I enjoy the challenges of building a hemp farming company from scratch—terrifying though it has been at times—but in a lot of ways I’m still a ‘recovering bureaucrat’ and I miss public service so the policy work I do with NIHC is a way for me to do that.

 

What is the focus of the NIHC GAC in 2021?

Some of the things we are focusing on are the USDA rule and on developments in a few states, such as California and New York.  There still seems to be a lot of confusion on the part of regulators and policy makers about how their choices can impact smaller and independent hemp farms in particular.  What may seem like arcane details of chemistry, statistics and semantics actually put many if not most farmers at huge risk, and regulators too, and for no public benefit at all.  And, of course, regulations concerning hemp-derived products in foods and dietary supplements coming out of FDA and at the State level are a major focus as well.  Hemp has such huge promise, not just for farming but for the broader economy, our environment and society in general and I don’t want to see it derailed by poorly crafted regulations.

Right now, it’s all a moving target, but I’m optimistic that the new Administration will get it right and I also think their emphasis on the rural economy, equity, and climate-smart agriculture present important opportunities for hemp as well.

 

What is the role of the NIHC in all this?

NIHC has a high degree of professionalism and its leadership has longstanding history with USDA and other sectors that are important to hemp production. That gives NIHC an ability to be uniquely effective in interfacing with USDA programs and procedures for the benefit of the industry, as we’re seeing in its efforts with MAP and check off programs, for example.  I know first-hand that USDA is a complicated bureaucracy so I definitely appreciate that savvy.

I see NIHC working hard to become a big tent in the industry, supporting hemp farming of all kinds and promoting equitable value chains throughout the industry. We all share a grand vision of hemp for our future, but we recognize the need to serve the industry where it is today and help it grow in a way that brings everyone along. There is a lot of diversity in the hemp industry, all kinds of people and businesses – and NIHC is a voice for unity, so I’m proud to be a member.

There also needs to be better coordination with scientific and standard-setting organizations, and to make decisions implementable, with reasonable of expectations of success.  NIHC can play a major role in addressing those kinds of problems and clarifying confusion in the market.

 

What is the potential of hemp in your view?

Hemp has enormous transformative potential, not just for agriculture but for manufacturing and energy as well, and if we can get the regulations right and put hemp on that kind of trajectory, then I can imagine hemp becoming a keystone crop for our economy in the not too distant future.  Hemp is a great crop for CBD and other wellness products – that’s what we grow it for in my company – but though this will always be a significant part of the industry, the truly grand future for hemp is about food and especially fiber.

I also see hemp having huge trade potential. The world already knows American hemp is the best there is in the wellness market, and if we can unleash the ingenuity of American farmers and manufacturers I think we can easily become the world’s leader in climate-smart manufacturing and energy uses of hemp fiber, as well.  But this will require public investments in R&D very quickly or we could lose that edge to our competitors around the world, so I’m hopeful Congress and the new Administration can see their way toward making that happen.

Check out Meristem Farms!

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Next Bold Move in Agriculture – Industrial Hemp is Well Positioned for It

The future of industrial hemp looks bright as experts outline its potential at the 2021 National Hemp Symposium.

Industry experts from various private and governmental sectors convened this week for the first-ever virtual 2021 National Hemp Symposium, brought to life by the National Academies of Sciences Board on Agriculture and Natural Resources (BANR) and Oregon State University’s Global Hemp Innovation Center (GHIC).

National Industrial Hemp Council (NIHC)’s board member Patricia Sheikh, Senior Vice President of Roots of Peace, moderated the two-day event, along with organizers Jay Noller, Director and Lead Researcher, and Jeffrey Steiner, Associate Director, both of the GHIC. Sectors represented included energy/biofuel, automotive, environmental, USDA, food and nutrition, apparel, manufacturing, banking, food and pharma and defense.

The event explored industrial hemp potential as an up-and-coming top U.S. commodity on the national and international stage. Presenters outlined uses and opportunities from their sectors that could be significant streams of income for U.S. producers with adequate supply to meet demand – a concern cited by most of the presenters. Things such as wood replacement in construction, desirable fiber in apparel, and automotive parts were highlighted. 3M is testing alternative uses of hemp in their manufacturing as part of their commitment to sustainability.

The outlook is exciting and hemp is seen as a top contender that could significantly stimulate the American economy, once obstacles are removed.

NIHC’s Patrick Atagi presented an informative session on hemp commerce that reflected this potential. “We can absolutely change the world with hemp, it is amazing. There are so many ways to succeed,” he noted.

“Yet, there are many obstacles to getting hemp product to market, such as transportation,” Atagi continued. “Working at the national level to influence the Drug Enforcement Agency on their view of hemp enforcement will open up commerce.

“The federal and most state governments are not opposed to hemp. As an example, NIHC recently received $200,000 to promote U.S. hemp internationally through the USDA Market Access Program. NIHC is also pursuing a domestic marketing program through a national hemp checkoff initiative. A hemp checkoff has the potential to positively impact the industry in a substantive way similar to the ‘Got Milk’ campaign and ‘Pork the other White Meat’ checkoffs.”

In addition to protecting the hemp brand and marketing, which includes combatting negative attacks with positive data and facts, NIHC sees its role as a partner with the government, especially through participation on working committees. “As a recognized partner with USDA, it puts NIHC at the table in international negotiations, with their seal of approval. To be competitive in these markets, like Asia and Europe, we need solid research on what those unique consumers want, what they like, to avoid the unintended consequences of not knowing.”

Ultimately, there are many hurdles including standardization, certification, and testing here in the U.S. that must be addressed, says Atagi. “The consumer has right to know what they are buying and to feel safe. They want to know ‘what do I buy’ and ‘how much do I take.’”

Bonny Jo Peterson of the Industrial Hemp Association of Washington, and co-presenter to Atagi’s session, agreed. “We want to grow, harvest and automate an industrial hemp crop for a sustainable market, which produces a quality product that people can trust. We really need standardized testing and labs. We need to all be on the same playing field.”

Dr. Dionne Toombs, USDA, outlined their efforts to do “worldwide testing and research in our labs.”They are investing $66 million in an Agricultural Research Service lab intended to enhance research, which will include hemp, she says. Toombs also referenced the Farm Bill of 2018’s provision for National Institute of Food and Agriculture hemp research investmentsand the Supplemental and Alternative Crops (SAC) Competitive Grants Program, both which have their challenges and limitations, but are moving the needle in the right direction.

Looking ahead, Toombs says, “We are facing a future of challenges that will hurt us, that are attacking our natural resources.” She believes boosting ag productivity and helping to develop innovative solutions to maintain our leadership across the globe are the keys to the future, in which hemp has a role. She cited funding and resources, realigning priorities with the New administration, food and nutrition standards, and having enough data to make decisions as current USDA obstacles.

Symposium participant Deanie Elsner, CEO of Charlotte’s Web – a market leader in hemp-derived CBD extract products – made an impactful plea for regulations and standardization, an issue the plagues her business. “Have you ever known a CEO for the largest company in a segment begging for research? Well I am here begging. We have to get data in order to give the FDA comfort to move forward,”she said in regards to the need for regulatory certainty and an affirmative statement for CBD in dietary supplements.

She believes the mega-trend she calls a “wellness awakening” – a move from sick care to well care – is driving increasing consumer interest in hemp products. “In the end, we have this amazing plant that has potential to help millions around the world. It is up to us to make sure they have the access to full spectrum hemp extract. Research studies are needed. Research is the only thing that will get us through this, and lack of FDA regulation has been quite a challenge.”

 
 

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