Southern Oregon hemp growers look to oil to make good money

By John Darling
For the Daily Tidings

Posted Jan. 26, 2016 at 12:01 AM

The Oregon Department of Agriculture will resume issuing licenses for hemp growers in late February just as the industry is veering away from industrial uses and toward the more lucrative market of medical marijuana products.
Hemp is a hybrid cousin of marijuana but with low levels of THC, the chemical that produces the high. It has been used over the centuries for fiber, clothing, food, oil and other industrial purposes. But since the legalization of medical marijuana 18 years ago, growers have found that hemp’s high levels of cannabidiol can provide patients with some of the same medical benefits as marijuana but without the psychotropic effects.
“There’s a lot of interest in CBD extraction with hemp,” says Lindsay Eng, ODA director of Market Access & Certification. “It’s allowed. It just has to be .3 percent THC or lower. Given Western Oregon’s good climate and the high price of land, it’s probably the most marketable (in contrast to industrial hemp). There’s absolutely a huge difference in profitability.”
ODA suspended its hemp licensing program in August, citing the need for legislative clarity in regulating a crop that’s rapidly changing from fiber- and seed-based to CBD extraction.
Policy questions will be sorted out in the February legislative session with a bill that brings Oregon into compliance with the 2014 federal Farm Act, a law that includes limited legalization of long-banned hemp, says state Rep. Peter Buckley, D-Ashland.
The bill, written by Rep. Carl Wilson, R-Grants Pass, will be “strongly supported,” says Buckley. It will regulate hemp for industrial uses as well as medical, and will help regulate farms “in smart ways that don’t threaten marijuana farmers nearby with pollen pollution.”
The legislation likely will loosen up the present 2.5-acre minimum for hemp farms, allow starts of hemp seedlings in greenhouses and support hemp farmers in “best practices,” so pollen from male hemp plants doesn’t migrate and compromise high-THC female marijuana plants growing nearby, Buckley says.
ODA will issue one-year permits (rather than former three-year permits) at $500 a year once the Legislature wraps up the short session, Ing says.
The hemp industry is in its infancy with no stand-alone infrastructure or handlers for pressing oil or processing fiber, Ing says.
“Most of our licensees are processing their own,” she says. “But once a crop matures to a certain point, it’s a natural progression. It will take a lot of investment.”
As for cross-pollination fears between hemp and marijuana, Eng says, “There’s nothing in our rules or statute about that. We don’t have the authority to regulate it. We think they should co-exist. … Landowners will figure it out on their own. It’s a civil matter.”
Hemp grower Cliff Thomason, a partner in Orhempco in Josephine County, was one of only 11 licensees in Oregon last year. Most of his 2.5-acre crop was eaten by deer and the rest came in with slightly too much THC. These problems, he notes, can be “remediated.”
Southern Oregon has a “dense population of pot growers, and they have a well-founded fear of pollination by hemp grows,” Thomason says. “If cross-pollination happens, it would degrade the THC content and the marijuana would lose all its value.”
Thomason reproduces hemp with clones and cuttings, growing only female plants, which don’t produce pollen. Orhemco plans to grow plants for seed in the Willamette Valley, away from the marijuana grows of southwestern Oregon. The seed is valuable for hemp oil.
A partner in Orhempco, Cherryl Walker — a Josephine County commissioner — says hemp oil is the big market for her and other hemp farmers. About cross-pollination, “We are respectful and do the best we can. We had marijuana farmers a quarter-mile away and it wasn’t an issue last year,” she says.
Walker says hemp is a “hefty investment,” requiring intensive labor and expensive seeds and processing equipment. Seeds have been difficult to come by, Ing says, with the most common source being Canada.
Keith Mansur, editor of Cannabis Connection magazine, located in Medford, says he doubts Southern Oregon has much of a future in hemp, as there’s not enough level, arable land with water. “It will be happening in the South and Midwest. The Willamette Valley is too damp and Eastern Oregon is too cold and dry.”
To resolve the threat of cross-pollination, Mansur suggests a cannabis growers association should divide the state into appellations, as France does with wine, and declare southwestern Oregon a “no hemp zone.”
However, Mansur adds, hemp is being grown here because “CBD oil is worth a hell of a lot of money. In a dispensary, it’s more expensive than high-THC oil or extract. They can get $50 a gram for their 80 percent CBD oil. That’s a lot of money. Would I grow it for $50 a ton for fiber when I can get a million dollars? People are just starting to catch up on their learning about it. The state needs to regulate hemp farms as medical grows, if it’s that valuable.”
Rose Gerstner, owner of Sympatico Clothing near Jacksonville, uses a hemp blend milled into cloth in China. “It’s great, and I think fiber is the future for hemp,” says Gerstner. “But here in Southern Oregon, we’re in the early stages of finding out what hemp grows here. Some is grown primarily for medical or food (the seeds). Other hemp has industrial applications. But it’s gotten off to a rough start, not being able to find seed and also the problems with medical growers, not wanting to cross-pollinate.”
The Legislature legalized hemp cultivation in 2009, but the law wasn’t implemented because the U.S. Department of Justice classified hemp the same as marijuana. The federal classification remains, but the Justice Department has said it won’t interfere with hemp production in states that have adopted a robust regulatory system.
Industrial hemp was included in the November 2014 Oregon ballot measure that legalized recreational marijuana use, possession and cultivation, and the state issued the first hemp licenses as a result.
Oregon State University has asked the federal Drug Enforcement Agency for permission to import hemp seed and conduct basic crop research, which is allowed under the Farm Bill. Jay Stratton Noller, head of the university’s Department of Crop and Soil Science, said he anticipates the DEA will approve the request and test plots could be planted in April. Three to five years of experiments would be necessary for Oregon State to produce useful data for growers, he said.
Researchers are starting from scratch because hemp germ plasm had to be destroyed in the 1970s when the federal Controlled Substances Act classified hemp the same as pot and other drugs, Noller said.
Noller said hemp was a viable crop in the past and is grown around the world. In the U.S., the first American flag was made of hemp, he said.
“In terms of the number of uses, it obviously buoys a lot of people’s optimism,” he said. “Farmers are always looking for an alternative crop: One, for rotation, and two, for the alternative markets.
“The enthusiasm is not hyperbolic,” he said.
Reach Ashland freelance writer John Darling at [email protected]. Eric Mortenson, of the Capital Press, contributed to this story via The Associated Press.