New regulations could send hemp industry packing, report says

Image by Niksy from Pixabay.

The hemp industry has seen explosive growth in the four years since the Legislature passed a law legalizing its cultivation and sale.

The low- to no-THC cannabinoid has emerged as a multipurpose crop amid a period of uncertainty and reduced volume for many crops traditionally associated with Florida. Orange production, for instance, has fallen by nearly half since the turn of the century due to citrus greening.

Hemp has helped many farms struggling with production losses survive and thrive, according to a recent study conducted by Whitney Economics.

There are currently more than 600 active hemp cultivation licensees in the state, and they are growing the crop on a combined 18,000 of land across Florida’s 67 counties. Additionally, there are about 9,260 businesses that have hemp permits in Florida.

The research conducted Beau Whitney, a cannabis economics, operations and supply chain expert, shows the hemp industry has a $13.7 billion annual economic impact on the state economy. That includes $6.8 billion in wages paid to nearly 190,000 Floridians with an average wage of $17.24 an hour.

But growers, retailers and extractors say the young industry is fragile and could face serious negative impacts — or outright eradication — if the state pursues new regulations on selling or producing hemp products.

Lawmakers are considering such policy in the 2023 Legislative Session.

A pair of bills (HB 1475/SB 1676) proposed this year would reclassify hemp extract as “a food that requires time and temperature control for safety and integrity of product” and impose several other regulations on the industry.

The bill language encompasses items not traditionally considered as food, such as “snuff, chewing gum, and smokeless products derived from or containing hemp,” but excludes synthetic cannabinoids, defined as products where acid or other solvents are used to adulterate the product and artificially infuse it with cannabinoids not organically present.

The proposed legislation require products be manufactured in a facility with a “current and valid permit” by a regulatory entity, along with a report confirming that the facility meets baseline requirements.

The bill also sets up requirements for containers, including establishing that they are “suitable to contain products fit for human consumption,” that they mitigate exposure to light and high temperatures, and that they are not designed to be “attractive to children.” The containers cannot contain more than 2 milligrams of THC, an attempt to close a loophole that currently exists.

Hemp advocates claim the proposal is a product of “big marijunana,” and nearly half of hemp businesses surveyed by Whitney Economics said they would be forced to shut down if it became law. Another 24% said they would experience significant revenue loss and 15% said they would relocate to another state.

“I am seriously rethinking expanding my operation here,” said Savage Enterprises CEO Matt Winters, whose company has plans to hire 280 new workers at its 60,000-square-foot hemp manufacturing plant in Orlando.

He said he relocated from California to Florida “because of Gov. DeSantis’ message about the freedoms provided to citizens here,” but the bills under consideration in the Legislature are giving him second thoughts.