Ag Policy Blog

Hemp's Shine Starting to Dim

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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A Colorado farm hangs harvested hemp to dry. A lot of farmers grew hemp this year without a contract, creating a glut. Along with that the FDA is questioning the use of CBD oil. (DTN photo by Chris Clayton)

Hemp so far isn't quite the panacea farmers hoped it would be.

Jerry Hagstrom, DTN's political correspondent, highlighted that notion in a column he wrote last month for National Journal after USDA finally came out with its rules for producing hemp.…

A Wall Street Journal article over the weekend highlighted what many had forecast would happen. Farmers face a glut of hemp right now.…

A lot of farmers dove into growing hemp this year without a contract in hand. Now they are struggling to sell the crop. Hagstrom, myself and others met a few of these farmers last month who were part of a group called the Hemp Federation of America. The federation had a handful of members who flew into Washington, D.C., to talk about hemp rules and problems with the crop. Surprisingly, the new federation had no one from the states that had established major hemp production, such as Oregon, Colorado or Kentucky, for instance. Everyone in the group was new to the crop.

In October, I highlighted that even established farmers were now having problems with merchant services and credit. Paypal, for instance, froze the accounts of hemp farmers for several months and new vendors who stepped in were charging triple the costs.…

The New Food Economy expanded on that theme, noting major banks had pulled credit lines for hemp farmers as well.…

Hagstrom highlighted in his column that Glen Smith, chairman of the Farm Credit Administration, said in a recent congressional hearing that he had warned lending institutions that they should make sure there is a market for hemp. "Just like any new crop, there is inherent risk."

The main product being produced by hemp growers right now is also under more recent scrutiny. Just last week, the Food and Drug Administration sent a letter last week to 15 companies, warning them that they are selling cannabidiol, known as CBD, in ways that violate the Federal Food, Drug, and Cosmetic Act.

The FDA also issued a revised Consumer Update on CBD, noting that they still “cannot conclude that CBD is generally recognized as safe (GRAS) among qualified experts for its use in human or animal food.”

“As we work quickly to further clarify our regulatory approach for products containing cannabis and cannabis-derived compounds like CBD, we’ll continue to monitor the marketplace and take action as needed against companies that violate the law in ways that raise a variety of public health concerns,” FDA Principal Deputy Commissioner Amy Abernethy said in a statement.

“In line with our mission to protect the public, foster innovation, and promote consumer confidence, this overarching approach regarding CBD is the same as the FDA would take for any other substance that we regulate.

“We remain concerned that some people wrongly think that the myriad of CBD products on the market, many of which are illegal, have been evaluated by the FDA and determined to be safe, or that trying CBD ‘can’t hurt.’

Aside from one prescription drug approved to treat two pediatric epilepsy disorders, CBD products have not been approved by the FDA. The FDA wants to be clear that a number of questions remain regarding CBD’s safety — including reports of products containing contaminants, such as pesticides and heavy metals — and there are real risks that need to be considered. "We recognize the significant public interest in CBD and we must work together with stakeholders and industry to fill in the knowledge gaps about the science, safety and quality of many of these products.”

It doesn't take much though to search for CBD products on sale everywhere. Social media highlighted "Cyber Monday" sales and new products for sale.

-Food & Drug Administration — FDA warns 15 companies for illegally selling various products containing cannabidiol as agency details safety concerns:…

-What You Need to Know (And What We’re Working to Find Out) About Products Containing Cannabis or Cannabis-derived Compounds, Including CBD:…

Chris Clayton can be reached at

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