Maine Farmers Fear Federal Hemp Testing Rules Could Lead to Crop Losses

For a lot of hemp producers, the U.S. Department of Agriculture’s (USDA) interim final rule on hemp wasn’t the Hail Mary they thought it would be. For months, the department was pressured by producers and interested parties to provide a comprehensive regulatory framework for the massive industry that had grown around hemp.

Farmers were at a major disadvantage as service providers like banks and insurance companies shied away from working with them.

After the USDA published its new rules, states and tribes were given the opportunity to write up their own hemp programs and submit them to the USDA for evaluation. As states put the finishing touches on their own programs, a number of farmers are quickly realizing that uncooperative banks and insurance companies are the least of their worries.

Hemp producers in Maine are prickling under the state’s new hemp regulations, saying they are too tough on a majority of them. The state is proposing a new formula for calculating the amount of THC in state-licensed plants, a move that will lock out at least 27% of hemp farmers for exceeding allowable hemp levels.

For example, Joe Saltalamachia grew 17 acres of hemp at his state-licensed operation, Top Flower Farms, and he says that if the new testing procedures were applied to his harvest, his venture would have sunk. “All the hemp I was selling becomes illegal, and potentially, I could go to prison,” he says. “But a guy down the road sells marijuana dabs or flower and he’s fine.”

He and his business partner were planning to buy new hemp farming equipment worth at least half a million dollars, but they had to put a pin on that once the new regulations came out. Since the equipment was highly in demand, they lost their spot on the waiting list.

He says that if the new regulations were to be implemented as-is, his profit margins would reduce drastically. At the moment, an acre of hemp that’s used as biomass for CBD extraction goes for around $60,000 to $80,000, but the new rules could bring this down to just $5,000 an acre.

According to state horticulturist Gary Fish who runs Maine’s hemp program, there aren’t many strains of commercially available hemp that would comply with the new federal guidelines. He adds that the price of seeds that will satisfy the federal THC limitations will go up even higher than they already are.

“The cost of business will go up and the return on investment will go down. That’s not good.”

Experts hope that hemp companies, such as HTC Extraction Systems (TSX.V: HTC) (OTCQB: HTPRF) and No Borders Inc. (OTC: NBDR), have made their unequivocal voice known to the USDA on these concerns.

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