More evidence of an industrial hemp bust appeared this week as Great Eastern Hemp seeks to unload a Broome County building it bought last year to process CBD.

Sale of the Johnson City industrial site comes eight months after the company sealed a $2.2 million deal to acquire the property with the expectation of outfitting the former sheltered workshop for hemp processing and storage. It marks the second enterprise to drop plans to process industrial hemp in Broome County.

The decision by Great Eastern Hemp to pull out of the business in the Binghamton region further deflates what was expected to be an industrial resurgence in the area driven by wide adoption and escalating sales of oils derived from the low-THC variant of the cannabis plant.

"I don't know if it speaks to the state of the industry," said Assemblywoman Donna Lupardo, D-Endwell, Broome County, who has been a state leader in pushing the development of the hemp business.

"It speaks more to their business planning."

There's a simple reason for the change of direction: Industry economics cratered, said Brian Haynes, a spokesman for Great Eastern Hemp.

"There's enough manufacturing and processing now to satisfy the market," Haynes said. "You can buy extracted, high-quality product cheaper than you can manufacture it."

Hemp boom goes bust in New York

Farmers across New York jumped into the crop last year, planting an estimated 6,000 acres to be used in the production of CBD — a substance claimed, without clear scientific evidence with the exception of one approved use, to cure a variety of maladies.

Some crop promoters were projecting prices as high as $30,000 an acre for the crop, leading to peaked interest in the long-depressed agricultural community.

However, with little or no processing in the state, much of the crop went unused as no market developed of the raw product.

Last year's crop — at least the bales that have not spoiled — still lies in warehouses. This year, estimates indicate less than one-third of last year's acreage was planted across the state.

In the spring, Southern Tier Hemp dropped its plan to develop a hemp processing plant at the former Gannett Central New York printing plant in Johnson City.

It failed overcome a deed restriction that severely limited uses at the 100,00-square-foot site next to Walmart. Binghamton University is now in the process of buying the site to use as a library annex.

CBD, or cannabidiol, is derived from the cannabis plant with low levels of the psychoactive THC, the substance that produces the marijuana high.

Another development that could jump-start industry in New York is the approval of adult-use marijuana, which could get the green light from the state Legislature next year after stalling this year due to the COVID-19 pandemic.

Where other hemp processing sites stand in the Southern Tier

Meanwhile, construction at the Canopy Growth "hemp industrial park" in Kirkwood, unveiled to much celebration last year, appears to be moving slowly.

Canopy said it will invest up to $150 million in its first U.S facility with representatives expressing optimism the operation eventually could generate hundreds of jobs, starting with 200 at the 46 Pine Camp Drive facility.

However, Great Eastern Hemp's decision to forgo CBD production calls into question initial optimistic scenarios painted by county and state officials about the industry's potential.

An offering flyer for 60 Lester Ave. lists the Great Eastern Hemp property at $2.95 million, touting a fully insulated warehouse, 61,000 square feet of space, and proximity to Binghamton University's new Health Science campus.

Lupardo blames stalled progress on a still-developing regulatory process.

New York is expected to release industry rules early next month that will, in addition to licensing growers and processors, require seller licensing in an attempt to clean up a retail market that is believed to be rife with illegitimate products.

"When you're doing something that's brand new, you learn things along the way," Lupardo said.

One small-scale hemp processing operation, Kaelen Castetter of CSG Hemp, is still moving forward.

It expects to be producing branded CBD salves, creams, tinctures and roll-ons under the name of "Empire Standard" using material from his drying facility at the former Kmart on Binghamton's North Side.

Production is contained in a converted storage trainer at the Modern Marketing Concept office in Kirkwood. Seven people will be employed by the venture.