Montana Legislature weighs bills to encourage hemp industry

(UM Legislative News Service) Colby Johnson was celebrating his 30th birthday in Las Vegas when he noticed the neon advertisements for CBD. The letters were everywhere.

The hemp-derived tincture cannabidiol is said to relieve pain, anxiety and other health issues, though science hasn’t yet corroborated such claims. Regardless.

“When I see those signs, I think to myself, the best CBD can be grown here in Montana,” said Johnson, who farms north of Conrad.

He isn’t alone. A wealth of Treasure State growers believe hemp can supplement thinning profit margins on traditional crops.

That wasn’t so viable before last year’s federal Farm Bill, which legalized hemp nationwide. Now states across the U.S. are setting their own regulations to produce everything from CBD to cooking oils, T-shirts and plastic.

That includes Montana, which grew the most hemp in the country last year, about 22,000 acres, as part of a pilot program. Three bills currently working their way through the state Legislature were written to help increase that number ahead of this year’s growing season.

That’s only logical to Johnson.

“Montana’s in a very unique position now to either be the frontrunner or sit back and watch everybody else,” he said. “I’d rather see us take the lead.”

Johnson is a fourth-generation farmer, and expects his son to be the fifth. Traditionally, his family has grown wheat, malt barley and other staples, but underwhelming commodity prices inspired them to start looking for something new several years ago.

At that point, hemp was still federally illegal — a Schedule 1 substance along with heroin, LSD and ecstasy — even though it contains negligible amounts of THC, the psychoactive substance that gets marijuana users stoned.

But the federal government was exploring legalization by allowing states to establish test programs.

Johnson’s family joined Montana’s hemp pilot program when it began in 2017. Their business, Big Sky Hemp LLC, grew by 100 acres that year and 350 the next.

Recently, Big Sky partnered with some folks in Conrad to produce CBD, which Johnson himself uses as medicine. He wrestled through college, and said CBD relieves shoulder joint pain and improves the quality of his sleep.

Yet turning hemp into cash has been slow going.

The U.S. market remains nascent. That’s why state Sen. Tom Jacobson introduced legislation to speed local development.

The Great Falls Democrat is sponsoring a bill that would establish a marketing label akin to the Montana Natural Beef Certification.

The hemp certification would require laboratory testing to meet safety and labeling laws, and it would include other to-be-determined information.

Jacobson said the “seal of approval” could make local products stand out from the rest.

“Montana internationally has a bit of mystique to it, or a brand in and of itself. And it makes sense for hemp producers to be able to leverage that in the marketing of their product,” he said.

The legislation is currently in the House.

Another bill passed by the Legislature last week would discard Montana laws requiring grower fingerprinting and background checks. As the adage goes, hemp is rope, not dope.

But where does the crop go after it’s grown?

Andy Gray, Montana’s hemp program coordinator, said there are fewer than 10 hemp processing facilities statewide, and most of the low-volume operations are extracting CBD, not making paper, flour, or “hempcrete,” which is used in building.

Start-up costs are “excessively high,” according to Jacobson. Hemp processing machinery, much of it from Canada and Europe, can cost millions.

The senator’s third hemp-related bill exempts such equipment from taxation, which could reduce transportation costs for farmers.

“For hemp to a be viable product for farmers to grow they have to have a market for it, and if we don't have a market for processors — it’s all for naught,” Jacobson said.

The bill passed the House and Senate by wide bipartisan margins. Amendments to the House version have been sent back to the Senate for what could be a final vote.

Not everyone is in favor of the tax exemptions. Sen. Dick Barrett from Missoula is one of five senators who voted against the bill during its first run through the Senate.

With local tax abatements and generic business exemptions already available in Montana, Barrett generally doesn’t support incentivizing specific industries — especially as lawmakers are forced to cut coveted programs from a tight state budget ahead of the session’s conclusion.

He’s also a little skeptical of CBD, which generates perhaps the most talk of any hemp product.

“It’s supposed to be good for everything from warts to schizophrenia. Whether or not it has those benefits, garbanzo beans have benefits as well,” Barrett said. “There’s no reason why we should discriminate in favor of one kind of business over another.”

Still, proponents say Montana needs processors to keep jobs and dollars in the state, and prevent bottlenecks with hemp-loaded growers.

With the plant federally legal, products can now be sold over state lines, dramatically increasing potential customer bases. Some analysts believe CBD alone could balloon into a multi-billion dollar industry in only a few years.

Colby Johnson, the farmer in northwest Montana, doesn’t need a get-rich-quick scheme, though.

He just wants another option that won’t make or break the farm, a rotation crop to stay in the black.

“I just want it when times are tough like they are now. I want people to say ‘I can get to next year with hemp.’ That’s what my goal is right now,” he said.

Kevin Trevellyan is a graduate student at the University of Montana School of Journalism. His work has appeared at Montana Public Radio, the Post Register and other news outlets.

https://missoulacurrent.com/business/2019/04/montana-canada-hemp/