Kentucky hemp industry’s economic impact showed explosive growth in 2018

Gross sales of Kentucky hemp products more than tripled

FRANKFORT — Kentucky Commissioner of Agriculture Ryan Quarles announced today that sales of Kentucky hemp products in 2018 were more than 3½ times higher than the previous year and that the amount that farmers were paid for their harvests more than doubled.

“When I became Commissioner of Agriculture, I promised to make Kentucky the epicenter of hemp production in the United States,” Commissioner Ryan Quarles said. “Look at us now. We are building the critical mass of growers, processors, and researchers that will ensure the hemp industry’s success in Kentucky for years to come.”

Hemp processors reported $57.75 million in gross product sales last year, according to a Kentucky Department of Agriculture (KDA) review of 2018 hemp licensed processor reports. That compares with $16.7 million in gross product sales in 2017. Processors paid Kentucky farmers $17.75 million for harvested hemp materials in 2018, up from $7.5 million the year before. Hemp processors spent $23.4 million in capital improvements and employed a total of 459 people in 2018, according to the processor reports.

“It’s important to keep in mind that all of this economic activity took place before the 2018 Farm Bill legalized hemp production,” Commissioner Quarles said. “I am encouraged by these numbers and hope this news solidifies Kentucky’s reputation as the hemp center of the United States. I’d like to thank Senate Majority Leader McConnell and Congressman James Comer for working to include hemp legalization in the 2018 Farm Bill.”

The 2018 Farm Bill removed industrial hemp from the federal Controlled Substances Act and gives hemp growers increased access to USDA programs. Federal crop insurance and other USDA programs will take time to develop as the Trump Administration works to implement all aspects of the 2018 Farm Bill. It also outlined the minimum requirements a state regulatory framework must contain to earn approval by the U.S. Department of Agriculture (USDA). Commissioner Quarles submitted Kentucky’s hemp plan to U.S. Agriculture Secretary Sonny Perdue minutes after President Trump signed the farm bill on Dec. 20, making Kentucky the first state to file its plan. The USDA announced in February that it plans to finalize regulations and approve state plans in time for the 2020 growing year.

The KDA will conduct an analysis to reduce administrative regulations deemed no longer necessary due to the 2018 farm bill. However, there will be few program changes in 2019.

Quarles also released updated numbers on hemp acreage and announced that more than 50,000 acres have been approved for the 2019 growing season, more than triple the number of acres approved in the previous year. The number of approved hemp grower applicants for 2019 is set to be 1,047, nearly five times the number of growers in 2018. Last year, 210 growers were licensed to plant up to 16,100 acres of industrial hemp and planted more than 6,700 acres. Program participants planted more than 3,200 acres in 2017, 2,350 acres in 2016, and 922 acres in 2015. Thirty-three acres were planted in 2014, the first growing year.

“With the increased energy and enthusiasm in the industry, it is important to realize that we are in the beginning stages of this transition to commercialization,” said Commissioner Quarles. “Like all crops and business ventures, there is risk in this industry. I encourage all approved growers and processors to do serious research on the crop and be clear-eyed about the opportunities and challenges this unique crop faces.”

In addition to the more than 50,000 acres approved for outdoor farming in 2019, the KDA approved more than 6 million square feet of greenhouse space for hemp cultivation. The department has approved 110 hemp processor/handler license applications for 2019 so far and is expecting more applications.

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