Q&A: Iowa making plans for hemp farming by 2020

Rod Boshart
The Gazette, Cedar Rapids, Iowa

DES MOINES — During the 2019 legislative session, lawmakers approved Senate File 599, which opens the door for commercial hemp production by legalizing it as an agricultural commodity now that the federal government has removed it from the list of controlled substances.

Gov. Kim Reynolds signed it into law effective July 1. Even so, hemp cannot currently be legally grown in Iowa.

The Iowa Department of Agriculture and Land Stewardship now must develop a state plan to license and regulate the production of hemp and submit it to the U.S. Department of Agriculture for approval.

Farmers cannot legally grow hemp in Iowa until the USDA approves the state’s plan — which means hemp production likely will not be legalized until the 2020 growing season at the earliest.

Hemp produces fibers that can be used to make products like textiles, oils, paper and rope.

State officials note that when the USDA approves Iowa’s regulatory plan, an individual farmer who has obtained proper state licensure could legally grow up to 40 acres of hemp.

The law legalizes the production, processing and marketing of hemp plants with tetrahydrocannabinol, or THC, levels of 0.3 percent or less in Iowa. The Iowa law does not legalize marijuana, and plants with THC levels above 0.3 percent still are considered controlled substances.

Iowa Agriculture Secretary Mike Naig recently shared his thoughts on developing Iowa’s industrial hemp production plan.

Q: What is the time frame under which the Iowa Department of Agriculture and Land Stewardship will develop a state plan to license and regulate the production of hemp in Iowa and submit it to the USDA for approval?

A: “We expect that we will have a program ready to go for the 2020 growing season. That’s the end game. USDA has to promulgate their rules from the (2018) farm bill and create their program and then we will make application after that. We anticipate that we’ll have that USDA program details by the end of August or early September, and then we will make our application. We’re ready essentially today. We just need to know the details around what they need to see in an application and then they’ll have 60 days to approve. We fully expect by the end of the calendar year that everything will be in place.

Q: Is it expected there will be a viable, profitable market for commercial hemp production, or does that remain to be seen?

A: “I think that’s an open question. We think there’s lots of opportunity. Hemp is a famously flexible product. What does the marketplace look like for the end product — fiber, oil, CBD, that marketplace is still very much undefined, and that’s still developing. CBD (cannabidiol) is the big market opportunity that most folks are looking at, but I think it remains largely untested.”

Q: As medical cannabis is more widely used and accepted, would it make sense for Iowa farmers to be able to grow hemp for medicinal CBD production?

A: “This is an important subject. Right now the issue that needs clarity is that FDA (Food and Drug Administration) has not approved CBD as a food or feed ingredient, and until they take some action it’s still not legal to add that to a food or feed product. So I think if there is clarity around that and FDA does in fact make that approval then, yes, our producers should be able to supply that market. But we really do need federal clarity on that particular issue.”

Q: What is the potential for hemp to become a major cash crop in Iowa? How much do the tight government regulations impede that?

A: “I don’t know. That’s the truth. I think from an agronomic standpoint we can grow it and grow it very well. I don’t think we know enough about what that end-user market looks like to be able to say exactly how this plays out in Iowa, but I think there is definitely potential for this to be a sizable crop in the state of Iowa. But it will be very, very competitive as other states also are making moves.”

Q: Do you envision a time when the limit of up to 40 acres of hemp will be lifted?

A: “ ... If the market develops in a way that we think there’s more opportunity then I think we should absolutely consider lifting that cap.”

Q: Is there any other crop in Iowa where farmers are required to get a state license before they can begin production?

A: “Not that I’m aware of, other than the medical CBD production, which is highly regulated. But I’m not aware of any other crop where a license is required. It is a very unique situation.”

Q: Could the licensure costs of up to $1,200 a year to get started and the minimum of $1,000 to inspect and test pre-harvest deter farmers from joining the program?

A: “I think there’s a balance here. That’s always a concern for us. We need to make sure that folks have the wherewithal to get into this program and do it the right way, but we also didn’t want to set that bar too high. We have to learn an awful lot about what’s going to happen here. I think those are all things that we’re going to have to continue to monitor as the program is implemented.”

Q: Is there any other area of farming in Iowa where growers need to submit official fingerprints and be subject to an FBI national criminal history background check?

A: “I don’t think so. Other states are wrestling with those types of things, too. You’ve got to make sure that you’re complying with the federal program requirements and yet trying not to be too restrictive. Again, I think it’s a unique situation in that regard.”

Q: Are you concerned that this new law makes Iowa ag department employees quasi-law enforcement or drug control agents?

A: “Our piece of this is really pretty straightforward. We oversee the growing of the product. But you’re absolutely right that there is a hand-off or a nexus with law enforcement. If something is below 0.3 percent THC, it’s a commodity; if it’s above 0.3 percent THC it’s a controlled substance. We are definitely playing a regulatory role here.”

Q: How much interest do you encounter among Iowa farmers?

A: “There’s definitely been a significant amount of interest. Given the challenges that we’re seeing in the ag economy I think there’s an interest in diversification in trying something new, and so there’s quite a bit of interest in this.”