In 2016, there was one permitted hemp grower in New York state. By Monday, that number had grown to 635, up more than 100 from just a few weeks ago.
“Early on, there was a total gold rush mentality about this crop,” said Janice Degni, a field crop specialist with Cornell Cooperative Extension of Cortland County and the extension’s top hemp specialist.
Hemp sales have seen exponential growth since 2015, according to Hemp Industries Association. In 2015, hemp sales totaled around $500,000, increasing to $47.6 million in the first 11 months of 2018. By 2019, it grew to $600 million nationwide, reports the state Department of Agriculture and Markets.
However, the market has been hindered by overproduction of hemp, which comes from the cannabis plant and produces cannabidiol, which is used to create products like CBD oil.
Now, potential hemp farmers are turning away from starting hemp fields, or from expanding the fields they have. The price for CBD oil dropped more than 40% between 2018 and 2019, she said, to about $3.50 per percentage point of CBD to less than $2 per point.
The crash “caused a severe sense of reality” for farmers looking to get into the business, Degni said.
Poor planning has also made potential hemp farmers more cautious, said Trever Sherman, the owner of Ithaca Organics in Freeville.
”There’s a lot of people who jumped on without a contract set up,” he said.
Sherman, whose farm produces CBD oil and CBD-infused products, has heard about farmers who have been unsuccessful producing and selling hemp go out of the business. But he added many producers remain in the game, and more are looking to get into it.
Additionally, the hemp market in the state is saturated with producers that grow hemp with low amounts of CBD, which have hurt those producers as buyers want higher concentrations, he said.
“People that don’t have as high quality of hemp, they’re never going to sell it,” he said.
Sherman’s harvest fared well last year as he grew 40 acres worth of hemp and sold about 20 acres of it to High End Multi Processing, LLC in Spencer and Hype Labs, LLC in Amherst.
He still has about 4,000 pounds worth of hemp in storage.
“Compared to everyone else I talked with, we did pretty well,” he said. He’s considering planting up to 200 acres of hemp this season.
Like Sherman, Allan Gandelman, owner of Main Street Farms in Cortlandville, said his production of hemp and CBD oil were good, but he has heard about farmers cutting production because of the overabundance.
COVID-19 has also made farmers rethink their plans for how much they’ll grow as the economy slides toward recession, he said. “It’s tough to predict what will happen.”
His hemp business, Head and Heal, wasn’t affected by the crash late last year as all of the hemp and products made from it are grown and produced at Main Street Farms. His business was better able to adjust.
What remains uncertain now for farmers like Sherman and Gandelman lies with how COVID-19 will affect buyers. Gandelman said he hasn’t planted this year’s crop yet, as he is seeing where the economy is going and whether stores that sell his products that have closed will reopen. He will continue to sell CBD products from his business online, he said.
“We hope the rest of the stores can open in the next four to six weeks,” Gandelman said.