During the 2019 New Mexico Legislature that ended in March, House Bill 581 passed both the House and Senate and was signed into law by Democrat Governor Michelle Lujan Grisham. The legislation established permits and regulations allowing the manufacture of hemp products in New Mexico.
New Mexico State Representative Derrick Lente, D-Sandia Pueblo, a supporter of the legislation, said hemp as an agricultural cash crop had the potential to immediately rival alfalfa as a cash crop in New Mexico. According to Lente, New Mexico has the right climate for hemp cultivation and noted “Agriculture is the lifeblood of New Mexico.” Hemp grown in New Mexico can easily be sent to in-state manufacturers, who could turn it products such as clothing and CBD oil products.
According to the New Mexico Department of Agriculture (NMDA), the harvest of the state’s first crop of industrial hemp since legalization has surged. The NMDA as of December 22, has issued more than 400 licenses, including 276 licenses to grow outdoors totaling 7,540 acres, and 132 licenses for indoor growers totaling 8,334,424 square feet. The 400 state permits in New Mexico are in 19 of 33 counties from Rio Arriba in the north to Doña Ana in the south. The largest growers are concentrated in southern New Mexico. The number of hemp license applications was more than double what the NMDA expected for a beginning program. Agriculture Secretary Jeff Witte said federal legalization has resulted in a burst of new farmers all over the country with acreage dedicated to production approach half a million acres.
GROWING PAINS AND WITH NO PROFITS TO SHOW
Notwithstanding the surge in licenses to grow hemp, the first year of operation for hemp farmers has been extremely difficult for them. The biggest challenge to the industry is to find hemp strains and growing techniques that will thrive in New Mexico’s climate and that will turn a profit. Complicating the situation is growing plant strains that have THC levels that are below the limit allowed by law. (THC is the hallucination chemical also found in hemp’s cousin, marijuana, but at much higher levels.) It was reported that some farmers had to destroy part or all of their harvest because the level of THC was higher than the 0.3% allowed under federal and state law. Plants that are above the limit of allowed THC must be destroyed resulting in losses.
A challenge to the industry is that a number of people went into hemp farming which resulted in an oversupply within the market. It is being reported that many New Mexico farmers who are growing hemp are struggling to make a profit with the commodity. New Mexico Agriculture Secretary Jeff Witte said there have been many “novices” trying their hand at hemp farming, who have never farmed and who have had to cope with issues all farmers face from labor shortages to pests and weeds resulting in reduced production.
Many New Mexico farmers despite the problems have said they plan to grow hemp again. Others hope to apply the hard lessons learned this year can be applied to growing marijuana if recreational use of marijuana is legalized in the up coming 2020 legislative session. Governor Michelle Lujan has already announce that the legalization of marijuana will be on the agenda in the 2020 legislative session that begins January 21.
HELP FROM THE STATE
On December 5, the New Mexico Economic Development Department announced plans to invest $400,000 in a hemp production and processing business. The investment commitment will be made to 420 Valley LLC represents in Las Cruces, New Mexico. The company is a CBD products supplier that cultivates hemp then extracts and refines the oil from the hemp into manufactured products such as oil, edibles and topical ointments, and even pens. The $400,000 state investment comes from the Local Economic Development Act. The city of Las Cruces has also pledged $150,000 for the project.
420 Valley LLC expects to begin hiring upwards of 55 employees beginning early 2020 and continuing over a 3 year period. According to a news release, employees will earn an average of over $33,000 annually. The company expects its payroll to be $2 million in three years. According to the Economic Development Department the investment is part of the state’s continuing effort to target sustainable agriculture and other economic sectors to help diversify the economy.
In making the announcement, Governor Michelle Lujan Grisham in a statement had this to say:
“Hemp production and sustainable agriculture are essential components of our mission to expand New Mexico’s economy. We must think broader than one industry and one industry alone; we must create opportunity for New Mexico entrepreneurs and residents of all ages who are eager to find fulfilling work and launch sustainable careers. … [T]hrough our Economic Development Department and other key initiatives we will do exactly that.”
Economic Development Department Cabinet Secretary Alicia J. Keyes for her part said that agriculture and related enterprises have always been part of the economic base in Southern New Mexico.
HISTORICAL BACKDROP OF A NEW INDUSTRY
A common public misconception is that hemp is somehow a part of marijuana cultivation, which is totally and 100% false. Marijuana and hemp are varieties of cannabis that developed with selective breeding. Hemp is used fiber and oils while marijuana is used for its narcotic components. Hemp is a “relative” of marijuana, but it has none of the chemicals in marijuana that causes people to become high like marijuana.
In 1937 Hemp production was banned throughout the United States, with the passing with the passing of the Marihuana Tax Act. Although it was illegal to sell or grow hemp in the US, it was legal to buy from international sources. Hemp was later added as a Schedule 1 controlled substance under federal law. Hemp is the non-psychoactive variant of the cannabis plant.
The Hemp Farming Act of 2018 removed hemp, defined as cannabis with less than 0.3% THC, from Schedule I controlled substances and made it an ordinary agricultural commodity. The United States farm bill became law on December 20, 2018. The growing of hemp is now legal throughout the United States subject to state regulation on agricultural crops. The federal law defines hemp as cannabis with concentrations of THC, the compound most associated with getting a person high, no greater than 0.3%.
Hemp has a long history of being used in textiles, paper and other material. The modern industry is largely centered on the production of cannabidiol, a compound that claims to have curative properties.
IMPORTANCE OF AGRICULTURE TO NEW MEXICO
New Mexico is home to 23,800 farms and 43.9 million acres of farmland.
The New Mexico’s top commodities include beef cattle and calves, pecans, hay, sheep, onions, chiles, greenhouses and nursery products, cotton, and corn.
Agriculture is deeply rooted in New Mexico and in the top 10 of its industries.
Following is a listing of New Mexico’s top 10 agricultural products and what they generate in cash receipts for New Mexico:
1. “According to the New Mexico State University Dairy Extension, just over 77 percent of the milk in New Mexico is produced on the eastern side of the state in Curry, Roosevelt, Chaves, Eddy and Lea counties. Milk and dairy products generated $1.3 billion in cash receipts.”
2. “About 10,000 families across the state raise beef cattle, and New Mexico lays claim to approximately 387,000 beef cows. Cattle and Calves generated $823.8 million in cash receipts.”
3. “New Mexico is second only to Georgia when it comes to pecan production in the U.S., and in 2017, the state’s farmers produced a record-breaking 92 million pounds of pecans. Pecans generated $220.8 million in cash receipts.”
4. “New Mexico is a major alfalfa hay producer, with 190,000 acres of the crop harvested in 2017. A legume hay, alfalfa is an excellent source of good-quality protein, fiber, vitamins and minerals. Hay generated $109 million in cash receipts.”
5. “New Mexico farmers harvested an estimated 7,100 acres of onions in 2017, and the state is one of the largest summer-onion producers in the nation. Onions generated $106.6 million in cash receipts.”
6. “Considered New Mexico’s signature crop, chile peppers have been cultivated in the state’s Rio Grande Valley for four centuries. New Mexico’s warm, dry climate and 350 days of sunshine each year make it an ideal place to grow chile peppers. Chile peppers generated $44.6 million in cash recipes.”
7. “New Mexico is one of 17 states that produce cotton, and production (in bales) ranks the state 16th. The Land of Enchantment’s upland cotton production is largest in Lea, Doña Ana and Eddy counties. Upland cotton generated $31.9 million cash receipts.”
8. “New Mexico farmers planted about 125,000 acres of corn and harvested 43,000 acres of corn for grain in 2017, resulting in a production value of more than $22 million. Corn generated $22.4 million in cash receipts.”
9. “In 2017, farmers across New Mexico harvested 135,000 acres of wheat. Wheat generated $15.7 million in cash receipts.”
10. “Sorghum is an energy-efficient, drought-tolerant crop, perfect for New Mexico’s climate. New Mexico producers planted 85,000 acres in 2017, yielding 187,000 tons. Sorghum brought in $7.65 million in cash receipts.”
Following is a link with information on New Mexico’s agricultural commodities:
New Mexico’s top agricultural crops include pecans, hay, sheep, onions, chiles, greenhouses and nursery products, cotton, and corn. Within a matter of just a few years, hemp can be yet another major cash crop in the New Mexico economy. Despite a difficult first year and all the setbacks, New Mexico still has a bright future in the hemp agricultural industry. The state needs to continue with its efforts to help the industry grow and prosper.