Why 2020 Looks Like a Ghost Year for New York Hemp

Why 2020 Looks Like a Ghost Year for New York Hemp

Wed, 06/24/2020 - 16:00
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The state’s growers are sitting on a pile of surplus from the 2019 season, while they desperately wait for rules to guide the industry going forward.

For New York’s hemp industry, it’s almost as if 2020 is turning out to be the year that never was. 

In many ways, 2019 was a boon for New York’s hemp farmers. The 2018 Farm Bill legalized hemp, or low-THC cannabis, and the market for hemp-derived products exploded across the state. 

The problem, though, as in  many areas of the cannabis and hemp industries: The excitement outpaced the regulations. While Governor Andrew Cuomo signed a bill last year to establish a more robust framework for the cultivation of industrial hemp, and for the production and sale of hemp-derived products, the final rules haven’t yet been released. That includes consumer protections, like quality control and packaging and labeling requirements.   

After the governor signed the legislation, the task of developing regulations was handed off to the Departments of Health and Agriculture and Markets in May. The anticipated timeline is that the draft rules would come out in mid-July, “ideally,” Assemblywoman Donna Lupardo, who sponsored the bill and is a longtime supporter of the hemp industry, told Cannabis Wire. Then, a window for public comments would be opened, those comments would be considered, and potential changes made before final rules take effect—next January. So much for 2020. 

What about 2021? “I have had no indications from anyone that we are not all committed to that timeframe. I’ve been in touch with the governor’s office on a number of occasions. I’ve expressed to them this is the ideal time frame. I’ve gotten nothing but positives,” Lupardo told Cannabis Wire

Lupardo said that she’s communicated to Cuomo that the state has an entire industry of growers, processors, manufacturers, and retailers who are “anxiously waiting” for the rules to be released. 

“We have a whole industry on pause. And it has been exacerbated by the surplus that was grown last year,” Lupardo said, adding that the surplus adds an “urgency” to the situation. 

Lupardo remains hopeful. She mentioned Governor Cuomo’s daily press briefings, held every day since March with a focus on the COVID-19 pandemic, especially when New York was the epicenter with the top number of virus-related hospitalizations and deaths. A number of times, Lupardo noticed, Cuomo mentioned “reimagining” everything from New York’s economy to business, so she decided to use his words in discussing the hemp industry. 

“I am saying this is a great opportunity for us to not just reimagine agriculture, but reimagine a whole new commodity that has a lot of promise on a number of fronts, not just on the extract side, but on the fiber side as well, and on the grain side. So I’m just using his language, which I think is a great word: to ‘reimagine,’” Lupardo said. “I’m saying, ‘okay, let’s put hemp into that story.’” 

Meanwhile, New York’s hemp industry is on hold for more than one reason. 

“It’s kind of a perfect storm, in terms of COVID and then also the lack of regulations and oversupply of hemp on the market, both in New York state and nationally,” Allan Gandelman, president of the New York Cannabis Growers & Processors Association, told Cannabis Wire. “Some farmers have decided not to grow hemp this year. And some farmers have decided to scale back, which is very different from 2019, when people were scaling up their operations and growing a lot of acres across the state.” 

For consumers of CBD products, there could be market challenges to come, due to the use of old hemp from last year’s surplus. Hemp fiber products aren’t a concern, Gandleman said. 

“What we’re seeing on the hemp crops in terms of storage is that if you’re just going to make isolate, you can store hemp for a really long time. The CBD molecule itself is very stable,” Gandelman said, referencing purified CBD that becomes a sort of powder. But, he added, “If you’re going for a nice full spectrum extract, you do start losing quality after a certain time frame.” 

Canopy Growth, the Canadian cannabis company that is one of the world’s highest valued, made national news last year when it unveiled a hemp park in New York’s Southern Tier, in Lupardo’s district. This April, the company announced that it would halt US growing operations in Springfield, New York, “due to an abundance of hemp produced in the 2019 growing season.” The company plans to use existing supply to “produce hemp-derived CBD products for the US market.” 

Canopy’s presence in the area “was a big deal for a manufacturing standpoint,” Lupardo said, but she added that growers in her region didn’t necessarily leap at the opportunity to grow for the international company, or for others, for that matter. 

“There was a lot of reluctance, to be honest, with a lot of people and farmers that I know to contract grow for anybody. Some of them had very bad experiences with misunderstandings, poorly written contracts. I’m not targeting Canopy, per se. But there were a lot of bad contract growing experiences. The farmers that I’m hearing from, folks who grew on their own and really weren’t expecting much out of the Canopies of the world, they were highly skeptical.” 

When asked whether a COVID-19 spike might divert attention from the hemp rules, Lupardo said that “it’s just gummed up the work a little bit in terms of the focus,” but that she didn’t expect the virus to cause any delays or hurdles. 

But what happens if the rules are further delayed, for any reason? 

“It would be disastrous if the New York regulations do not come out, really, immediately, and then don’t get implemented by January 1st,” Gandelman said. “The New York industry, when we talk about New York farmers and processors and consumer packaged goods companies, you’re not going to be able to compete with out-of-state imports. It’s just never going to happen. And so we’re really just going to crush the New York hemp industry completely if these regs don’t come out.”