Why Are Local Governments Sabotaging Hemp Industry?

Hemp has been the enemy to many business sectors for decades, and its illegal status kept it from competition. The 2018 US Farm Bill changed this, re-opening an industrial hemp market. But what should have taken off, hasn’t. What’s most confusing, is that its actually local governments which pose the biggest blockades to the hemp industry thriving. Why would they do this when it means getting in the way of a lucrative industry?

The federal government might have chosen to legalize hemp production in 2018, but local governments have repeatedly made it hard for hemp farmers and the overall market; with incredibly strict, over-bearing regulation. Our 100% independent news publication focuses on stories in the growing cannabis and psychedelics spaces. We provide the Cannadelics Weekly Newsletter for readers to stay updated, and offer tons of deals for a range of products, from smoking devices to cannabinoid products like HHC-O, Delta 8Delta 9 THCDelta-10 THCTHCOTHCVTHCP HHC. You can find deals in our ‘best of’ lists, for which we ask you only buy products you are comfortable with using.


Hemp in the US

The history of hemp is a sordid story which reminds us that the US government doesn’t always act for the good of the people, and sometimes in direct contrast to it. Back in the beginning of the US, during colonial times and beyond, hemp was a widely grown crop, used for all kinds of industrial purposes. It was such an important crop, that some colonies like Virginia instituted grow laws in the 1600’s to ensure hemp was grown by local farmers, mostly for use by the military.

During this time, hemp had tons of applications including clothing, paper products, sails and rope for ships, and so on. It was also a main component of many medications starting from the 1800’s, when Dr. William O’Shaughnessy brought it into Western medicine; after researching it in India. Why hemp was illegalized is a great question, and depending on where you look, you can find different answers to this question; some that make more sense than others.

Hemp, and cannabis in general, was used industrially, but rarely smoked for recreational purposes. This changed with an influx of Mexicans in the early 1900’s, who did smoke the plant. This happened around the time that industries started popping up that posed a direct competition to hemp. These included the burgeoning synthetics/plastics industry, run by the DuPont family; and the wood paper industry, with William Randolph Hearst at the helm, who owned a huge newspaper chain, and didn’t want to compete with hemp paper. Between the Mexican association, and push from these industries, as well as the pharma industry; cannabis was illegalized.

government hemp

The process of prohibition started with 1937’s Marihuana Tax Act, which made it harder for cultivators by instituting more strict licensing requirements. WWII changed this temporarily, and there was a push for hemp farming due to supply issues into the US. This was all quietly shut down by the government post-war, and the case against marijuana and hemp was built even further. It was marijuana, and smoking it specifically, that was essentially used to illegalize the hemp industry, even though that logically makes no sense at all.

Though there was an understanding about the difference between high-THC and high-CBD plants, this information was ignored by the government upon passage of the 1970 Controlled Substances Act, which treated both the same. This law put cannabis of all kinds in Schedule I, saying it was so dangerous that it wasn’t even fit for medicine (which it had been in for 100 years on the Western side, and thousands of years on the Eastern side).

The distinction between the two types of cannabis wasn’t officially re-established until a federal court case – HIA (Hemp Industry Association) vs DEA that ran from 2001-2003. This case, and the re-institution of a definition between hemp and marijuana, allowed the entrance of hemp back into the legal market years later with the 2014 and then 2018 US Farm Bills. The latter of which legalized the cultivation and production of industrial hemp products nationally.

Why do local governments get in the way of new hemp industry?

You’d think that legalizing something and setting up a market is an indication that that market is desired. Sure, visually it looks like hemp production is promoted, but in what looks like a passive-aggressive move, local governments continue to set obstacles to the hemp industry, possibly implying that the legalization is more for show. This sounds odd, for sure, but let’s remember that hemp is growing in understanding as a more environmentally-safe competitor to massive, and massive-waste-causing, industries like the paper industry, the plastics industry, the cement and building industry, and even the oil industry. This on top of it already being a threat to pharma companies.

The thing is, all the industries above have corporations and lobbyists that pay greatly into the pockets of congressional representatives on both state and federal levels, making it more than possible that there is quite a large financial push from within, to keep this industry down. Along with this, its place as a ‘cash cow’ has led to insane taxation seeking to squeeze out every penny, to the detriment of the actual industry.

Recently it was reported that the hemp industry in Oregon is in trouble, and that its not about a lack of interest either. Farmers are repeatedly trying to jump through hoops to create these enterprises, and are continually being thwarted by new, and often overbearing, regulation. Governments usually make it easy when they want an industry. Consider the opioid industry, and the multi-billion-dollar lawsuits, which haven’t slowed anything down. Those medications are still sold, with a recent governmental proposal to lower prescribing guidelines…that’s how much their sale is desired. Even the travesty of overdoses hasn’t limited the industry, and that’s a real danger…so why are governments giving hemp farmers such a hard time? And what exactly are the problems?

hemp vs marijuana

How do local governments get in the way of new hemp industry?

What are the tactics used to slow down what should be a skyrocketing industry? Jackson County is one of the biggest cultivation areas in Oregon, and yet in March of this year, state regulators declared a state of emergency for cannabis, which creates a moratorium on new licensing. In fact, by law, when a state of emergency is called, such applications must be denied. The state of emergency announcement acts retroactively, going back to the 1st of the year, and continues till the last day of the year, effectively meaning no new licenses for growing hemp can be given out or used for an entire year.

Why is this happening? What terrible threat is there that now keeps hemp from being grown, as opioids are still widely prescribed and sold? Apparently, the biggest concern is rooting out all those farmers (reported as 53% last year) whose crops exceed the .3% THC maximum. Though this is advertised by the government as something done by sneaky growers cultivating marijuana under the guise of hemp, simply being over the limit can actually imply no more than, say .4% THC, which hardly makes it what they’re saying.

Considering its already known that its hard to stay precisely within these limits, the more reasonable factor is that farmers are just barely missing the mark, and this is a massive excuse to stop production. I mean, again, opioids…everywhere. Still. Even if it’s real marijuana, though the growers might not be sanctioned, it is a legal state. Should this really stymie the entire industry?

The other issue? Unregistered growers. Translation? Growers for which no tax money is collected by the state. Translation? Black market. Let’s remember, the legal cannabis industry can’t compete with the black market past a point, and this means both state governments and the federal government (federal for hemp only) are constantly trying to find, and get rid of, operators in this market. Whereas it really should be obvious by now that this won’t work, apparently, its not. Realistically, if governments want their legal industries to work, they need to stop with the overtaxing (both excise and to consumers), drop overly strict regulation, and stop treating the industry like a cash cow.

Instead, governments have retained their insane, non-working tax structures, and incredibly restrictive regulations, and then do antics like this where they stop the real industry, so they can have more time to find anyone making an illegal buck. Again, is this really an issue that should stop a legal market?

I don’t remember any large clothing manufactures being forced to stop all function until every knockoff vendor was found and put out of business. Does anyone else? Nope? Once again, no danger to consumers. After all, consumers have lived off this black market for the last 100 years. Calling it dirty and unsafe now, is about the dumbest smear campaign, yet that very logic is used to explain why these growers need to go. Translation? Money lost to taxing bodies. Period.

hemp farm

Into the future

Similar issues of regulation and/or high taxes are seen nearly anywhere that hemp (and marijuana) industries exist in the US. Take Washington, for example, where complaints over taxes still exist ten years after the start of the market. Or California, where the market has suffered so badly, that the state is actually overhauling its tax structure in hopes this can reinvigorate it. Hawaii is yet another example, with cultivators in the state fighting against overly restrictive regulation that restricts access to the local market, and requires a painful three-day notice period for crop transport, testing, and inspection.

There are plenty of other factors that also effect the hemp industry, like overproduction. 2018-2019 was a good time for CBD sales, and this led to inflated expectation for demand, which was subsequently not met. Operators jumped in without thought or research, and somehow no one considered it could be nothing more than a fad. This misconception led to a massive amount of overproduction, lowered prices, and a harder time competing. The inflated expectation came from nearly every publication, which all touted unrealistic numbers, based on no experience. Never a good idea.

Right now, a lot of hemp production is geared toward the CBD and cannabinoids market, which in and of itself shows the lack of understanding among growers of applications outside of drug-related or wellness products. Perhaps as actual industrial uses like plastics and paper start to pop up more, the hemp industry will see further invigoration, and a massive rise in production. After all, THIS is what ‘industrial’ hemp is meant for in the first place. And yet even despite this, I have yet to hear of a government promoting these uses.

Conclusion

Why hemp for plastic and paper (among other uses) hasn’t ballooned out exponentially could be related to many things including existing industries that don’t want competition. Perhaps this is why local governments get in the way of the hemp industry, which was just legalized. It should be understood by now that leveraging too-strict regulation, forcing high taxes, and trying to weed out black markets at the expense of legal ones, will never lead to anything good. And though stories abound about the large taxes brought in for cannabis, in states like Massachusetts, one can only wonder what that number would be, if governments stopped trying to sabotage the industry.

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