In September, all licensed Georgia hemp farmers and processors received an email stating public comments were open for changes to the 2022 hemp rules. The Department of Agriculture gave examples of the proposed changes, and offered until middle October for anyone to make comments on the rules. Below are my comments on the current rules, and my perspective on positive changes that would benefit the hemp industry in our state.
Now let’s be clear, I am not a large grower in the state. Honestly, I may be one of the smallest. I like to consider myself a craft grower and educator.
My perspective tries to consider both large and small-scale grower’s views, along with basic business perspective. I’ve been operating a web design business for 20 years (www.wargraphicarts.com), and another niche indigenous instrument education business for the last 7 years (www.archaicroots.com).
My passion for the positive benefits of the cannabis plant (hemp) fuels my energy toward growing and educating about hemp. I’ve mentioned in previous articles why I support hemp and believe in cannabinoids such as CBD.
As I write this post this morning, I am waiting on my pre-harvest site check, which is required by the state of Georgia, scheduled in about 2 hours from the time I am typing these specific words. So let’s get into the post.
Below are my comments on the current hemp rules in Georgia, and what I think would benefit our hemp industry.
Problems with the current hemp rules in Georgia
- Growers cannot package and sell their own flower retail
- Growers must pay extra to package their flower
- Site checks (compliance checks) are too expensive
- Processor licenses are too expensive
- Major restrictions how growers can sell hemp
- Processing definition should be only extractions and isolation processing
- Overall rules limit the ability for farmers and processors to compete and prosper in the hemp industry
Here’s a link to the current proposed rule changes for 2021, with all changes red-lined for easy navigation.
Growers cannot package and sell their own flower retail
(48) “Process” or “processing” – converting an agricultural commodity, including
hemp, into a legally marketable form.
This definition does not include: 1. Merely placing raw or dried material into another container or packaging raw or dried material for resale;Line 48- Ga Hemp Rules
Grower’s cannot process without a license, but we can place in container or packaging for resale. Resale isn’t defined in the hemp rules, but is usually defined as “the sale of a thing previously bought.” This could be seen as we can only sell to others who will use for resale, or could be read as we can resell after packaging. This portion of the rules isn’t clear enough for many growers.
“Hemp Product” – all products with the federally defined THC level for hemp derived from, or made by, processing hemp plants or plant parts that are prepared in a form available for commercial sale, but not including food products infused with THC unless approved by the United States Food and Drug Administration.Line 35- Ga Hemp Rules
A hemp product is anything made by processing hemp plants or parts. As growers, we cannot process.
it shall be unlawful for:
(3) A licensee to provide or sell hemp to any person other than another licensee, a college or
university authorized to conduct research.
(7) Any person to offer for sale at retail the unprocessed flower or leaves of the hemp plantGeorgia Hemp Bill 2021
So combining the hemp rules above, it makes it very hard to discern whether we can legally package our own flower to sell.
Mark Eurachek, a prominent Atlanta attorney, makes similar comments in his article about smokable hemp in Georgia, which is linked below.
Growers must pay extra expense to package flower for retail
If the above statements are true, which many hemp growers and attorneys are perceiving them to be, then farmers are forced to pay more to package their hemp for retail purposes. Currently, many farmers are going out of state to package their hemp. I’ve heard prices from $100 per lb to $100-200 a day (to come and package your own hemp at their processing facility).
This fact alone costs Georgia hemp farms much more than other nearby states, making it harder for us to compete within the regional industry. Currently, a farmer may pay an out-of-state processor $100 per pound to package hemp in farmer provided packaging.
A farmer could make around $1000 retail for a pound of quality flower, that means there’s roughly a 10% packaging fee attached to each pound. Packaging is done in-house at almost every other hemp farm in the country that sells flower. Georgia’s hemp farmers therefore have more overhead costs than other farmers nationally.
Site checks (compliance checks) are too expensive
Neighboring states’ hemp rules vary greatly with ours; one major difference is cost of licensing and compliance tests. Within Georgia, our grow license fees aren’t horrible, at $50 per acre or per covered grow site (greenhouse or indoor grow space). This is still more than many states, which have flat fees of $100-300 per year, with no acreage limit. This higher cost of site checks, or compliance tests, adds to overhead cost for each crop and product.
Site checks in North Carolina are usually around $100. A site check for my farm is near $600. This is again limiting Georgia farmers from competing with other regional farmers. You must consider that before each harvest this fee is applied. When you have multiple plots to harvest a year, this fee adds up quickly.
For small farmers, this fee could equal a fair portion of each harvest’ profit, especially if that farmer is selling their product wholesale and not retail.
Processor license fees are too expensive
Compared to other nearby states, our processor license fees are hugely unfair. In Georgia, our processor license fee is currently set at $25,000 per year. In North Carolina, this fee is around $100-200 per year. Many states across the country don’t even require a license to process hemp, or processing rights are given with each grow license automatically without extra costs associated.
This is limiting Georgia processor’s ability to provide affordable service fees for state growers, compounding the issues expressed above, and creating another catalyst for Georgia hemp industry failure. Those costs are tacked on to the processor’s fees, which trickle right down to farmers and customers, making out of state hemp products generally cheaper and out of state processing more cost-effective.
This is a major factor as why you don’t see more hemp products made with hemp grown in Georgia. We just can’t be competitive with product costs compared to other states.
Processing definition should be restricted to extractions and isolation processing only
Another issue with this version of the rules is the inclusion of processing for things as simple as hemp paper or fiber products. Under the current rules, one must have a processor license (25k per year) for even processing paper. This is a simple process that anyone can do in their home with other plant material, we as citizens or farmers cannot do this legally without a processor license.
This was one idea a customer reached out to me about recently, but the part of the bill that states “processing hemp plants or plant parts that are prepared in a form available for commercial sale” is the main issue limiting something as benign and basic as hemp paper making without an expensive yearly license.
The initial $25k per year license fee for producing anything from hemp is detrimental to the growth of the hemp industry. Even someone who makes paper (handmade paper, paper towels or even toilet paper) would be required to get a license to use hemp fiber for their process of producing a paper product.
One of the biggest markets of hemp fiber is clothing, so under this rule, even a cotton processor looking to use hemp for fiber would need to pay an additional $25,000 a year for that ability. This limitation is absurd at the very least, especially if you want the hemp industry to succeed in Georgia.
Restrictive rules on how growers can sell hemp
One of the biggest hemp farm tourism ideas in the last few years is “u-pick” hemp events. These events draw large numbers to hemp farms across the country during harvest season. When searching online, you will find tons of links to “u-pick” hemp events. Many farmers love the ability to connect with their customers directly on their farm, adding an agricultural tourism benefit to their farms. Additionally, many customers love their ability to pick their own hemp, much like picking their own apples or pumpkins.
This is something farmers cannot offer in Georgia. We cannot sell unprocessed hemp flower directly to customers, so this type of high-demand event is illegal for growers in our state.
Once the crop is tested, as farmers, we should be able to sell our flower to anyone we want. The current rules make farmers funnel hemp toward processors, and the processors that are in Georgia already have a competitive disadvantage to other out-of-state processors.
Overall these rules limit the Georgia hemp industry
When you look at the Georgia hemp bill and rules that go with it, you start to see that it’s not written for a prosperous or competitive Georgia hemp industry. This bill restricts the farmers and processors in the state, making it much harder for the industry to succeed. We need some major changes to our current rules to bring Georgia back into the hemp industry. In the past, Georgia was a major producer of hemp for the country.
What should be changed?
- Clearly define that hemp farmers can package their own flower for retail or wholesale
- Make hemp site checks (compliance checks) more affordable
- Lower the processing license fee and give a cost-effective option for processing abilities to all licensed farmers
- Define processing as extractions only (oil processing and cannabinoid isolation processes specifically)
- Exclude using seeds, stalks, and leaves in the processing definition (since extractions are best using flower)
- Make it legal for farmers to sell compliant hemp crops, whether raw or processed
These few changes could have huge benefits to the Georgia hemp industry in total. Without some of these changes, less hemp will be grown and processed in our state, this has already happened in the first 2 years of hemp farming in Georgia. I hope we can find the best solution to helping the hemp industry thrive in our state.
If Georgia really wants a successful hemp industry, some of these issues will need to be addressed in the near future.
Thanks for reading my article about this topic. Feel free to reach out to me if you like.