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An industrial hemp crop was grown on UW-Extension test plots in Chippewa County in 2019.

Interest remains high in growing hemp in the third year of Wisconsin’s industrial hemp pilot program.

But the number of farmers exiting the program is just as high this year.

About 50% of both hemp growers and processors in 2020 are returning licensees and 50% are new licensees, according to Brian Kuhn, director of the Wisconsin Department of Agriculture, Trade and Consumer Protection’s Plant Industry Bureau.

“There’s still a high level of interest in this,” Kuhn said during the Board of Agriculture, Trade and Consumer Protection’s May 14 meeting. “I just think some of the word is getting out that this isn’t the way you’re going to make a million dollars. The reality is the marketplace is still evolving and growing and developing across the country.

“Those factors have brought a little reality check to the exuberance that was coming into the hemp arena.”

The hemp industry in the state has grown from 185 growers and 82 processors in 2018, the first year of the state’s industrial hemp pilot program, to 1,251 growers and 560 processors in Year 2.

“We saw a tremendous increase last year,” Kuhn said. “We’re seeing a flattening of that dramatic growth.”

In 2020, Wisconsin has 1,128 registered growers and 536 processors.

Registered acreage is up to 9,430, up from 5,000 a year ago, and hemp is expected to be grown in all 72 Wisconsin counties this year.

Kuhn said part of the reason for the turnover might be due to the difficulty farmers had in finding a market for their crop. Feedback from other states growing industrial hemp shows there was a lot of hemp in the marketplace last year, he said.

“We had a lot of growers grow a lot of hemp last year that they didn’t have a market for and couldn’t find a market for and are still struggling to sell that crop,” Kuhn said. “We’re not the only state in that situation. There was way more hemp available than there were markets to sell into.”

With the legislation that created the state’s industrial hemp pilot project program, the 2017 Wisconsin Act 100, set to expire July 1, Kuhn said DATCP is currently working on a new emergency rule that must be in place by that date.

Kuhn said the new emergency rule will likely have minimal changes from what is currently in place.

The 2018 Farm Bill provided the blueprint for the U.S. Department of Agriculture to develop rules for domestic hemp production, moving the crop from the pilot research program model to a commodity production program model, and DATCP will need to bring it’s rules in line with that program after this growing season.

“The hemp program, year by year, gets a little clearer,” Kuhn said. “The program is getting a little more stable, so our growers know what they’re getting into.”

Wisconsin was once a leading producer of industrial hemp, primarily for rope production, until it was prohibited in 1938. By the 1950s, much of the infrastructure that existed for turning hemp fiber into rope was gone, Kuhn said. Today, most farmers are growing hemp for CBD, a cannabinol like THC in marijuana. Plants grown for cannabinoids present different challenges than those grown for fiber, Kuhn said.

“We do have a really long history of producing hemp in the state,” Kuhn said. “But the CBD crops have a propensity to get hot (when the THC content rises above 0.3%) as the season continues.

“That’s where the risk comes in for growers. (CBD) is the focal point right now. That’s where people see the dollars, the way to make money right now is on the CBD side.”

Kuhn said the industry could see a return to fiber, but there are challenges in redeveloping that infrastructure along the way.

“I would say the long-term more stable agricultural commodity appears that it will be hemp fiber, but all of that infrastructure, all those markets, has to be reconstructed,” he said. “We’re on an evolutionary path down that track.

“CBD will still be there, but that’s a challenging area.”