June 13, 2024

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Government fees create major barrier for industrial hemp farmers

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Legislators worked hard to allow farmers to grow industrial hemp but license fees imposed by the Kansas Department of Agriculture are a significant barrier to the potentially lucrative cash crop.

Kansas Governor Jeff Colyer signed a bill in 2018 allowing for the cultivation of industrial hemp as part of a research program. The deadline for farmers to apply for the industrial research hemp program is June 1st 2019. Hemp is having a moment in the United States and even in Kansas. The 2018 Farm Bill allowed for states to make plans regarding commercial growth of hemp.  A bill signed in April 2019 by Governor Laura Kelly allows the state to develop a commercial growing program for Kansas, but as of now the industrial research program is the only way.

However, farmers have voiced frustration over the licensing fees associated with the hemp research program. Brett Fairchild a farmer from St. John attended an industrial hemp conference put on by the Pratt Chamber of Commerce.

“The main thing that I was surprised about was that I didn’t know that were all that many fees. I don’t know that there would be thousands of dollars’ worth of fees,” says Fairchild.

Representative Willie Dove (R-Bonner Springs) sponsored the industrial hemp bill in the state legislature. He says farmers have approached him with why they won’t grow hemp.

“Individuals were saying they don’t want to grow industrial hemp because of these obstructions that they are putting before us and one them was the actual cost of the license,” says Dove.

The license fee for a grower is $1,000. The license fees to process hemp start at $3,000 to process fiber and grain, and top out at $6,000 to process floral material. The cost to distribute the hemp is $2,000. There is also a $47 fingerprint fee for the Kansas Bureau of Investigation to do a background check. Licensing fees can easily top $13,000 before distribution even happens. Kelly Rippel with Kansans for Hemp notes that cost for the research program are due to the program being new.

“There are fees associated with this. Those fees came from the Department of Agriculture doing an analysis, an internal analysis, to understand what it would take ad far as full time employee work to accommodate it, to actually make the program work,” says Rippel.

One reason for the high cost to start the program is the legal issues surrounding Hemp. At the federal level hemp is still categorized as a schedule 1 narcotic.  According to The Brookings Institute the 2018 Farm Bill removed hemp derived products from Schedule 1 status, but it does not legalizes cannabidiol (CBD), a major and profitable compound in hemp, in general. Only those grown and manufactured in line with Farm Bill legislation is legal. The only exception is pharmaceutical grade CBD which falls under the purview of the FDA.

“There are a of restrictions that have gone on due to law enforcement wanting to control and keep their thumb on certain aspects that they believe could have gotten out of hand,” says Rippel.

Hemp is a strain of the cannabis plant that is grown specifically for industrial purposes and though related to marijuana, hemp strains contain do not have psychoactive properties of marijuana. Tetrahydrocannabinol (THC), the psychoactive component of cannabis, is limited in Kansas’ industrial hemp research program to 0.3 percent in hemp grown. This is in line with Farm Bill legislation but iIt also leads to more fees for testing paid for by farmers.

“The department of Ag is going to have to reevaluate those fee structures. And I have heard they will lower them in the future. Because they want this to be successful for the state and for farmers, but they had to start out at a certain level to accommodate the program,” says Rippel.

According to the Kansas Department of Agriculture 159 licenses to grow hemp have been issued; 32 have signed up to process hemp and 16 to distribute. However, the success of hemp in Kansas could be limited given so few are willing to pay the fees to grow hemp.

“The department of Ag is going to have to reevaluate those fee structures. And I have heard they will lower them in the future. Because they want this to be successful for the state and for farmers, but they had to start out at a certain level to accommodate the program,” says Rippel.

It is a sentiment echoed by Dove who has gone back and forth with the Department of Ag over the fees.

“I started to haggle with them, with the department, and tell them hey you got to cut this down, and make it a little easier for them. You are putting too many road blocks up, so the farmer can’t do it.”

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