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Starting a Hemp Business in Nevada

Starting a Hemp Business in Nevada

Starting A Hemp Business In Nevada

Thanks to the 2014 U.S. Farm Bill, Senate Bill 305 (SB305), and Senate Bill 396 (SB396), those who are interested in growing, producing, or handling industrial hemp in Nevada are able to do so under the State of Nevada Department of Agriculture Industrial Hemp Program. However, starting a hemp business is more than just planting hemp seeds in your backyard and waiting for them to grow. As a matter of fact, it is a felony to grow hemp in Nevada without a license. If you are interested in getting licensed to grow, produce, or handle hemp, the Nevada Department of Agriculture (NDA) has its own application process and fees.

What is hemp?

Hemp comes from the Cannabis sativa plant and contains a very low concentration of THC, or tetrahydrocannabinol (the chemical component of marijuana that is responsible for the “high” you feel after consuming it). Historically, hemp has been used to make rope, textiles, canvas and clothing. Additionally, it can be used to make oils and food.

Is hemp basically the same thing as marijuana?

No. Although hemp comes from the same species as marijuana, it has a completely different chemical makeup. While marijuana contains a high amount of THC, hemp contains less than 0.3%. Additionally, hemp contains high levels of cannabidiol (CBD), which will not have intoxicating effects on a person’s body. Although hemp is not considered a “drug” like marijuana, it is still important to remember that it is a federal crime to grow, produce, or handle it without a license. Unlike marijuana though, there are far fewer restrictions on purchasing hemp products (such as CBD oil, clothing, or even smoothies) from a licensed producer for your own personal use/consumption.

How can you start a hemp business in Nevada?

If you’re interested in growing, producing, or handling industrial hemp in Nevada, you will need to fill out the necessary applications, which can be found on the Nevada Department of Agriculture’s website. There are currently 3 applications:

  1. Industrial Hemp Grower’s Application – for those who will grow hemp.
  2. Industrial Hemp Seed Producer Application – for those who will grow hemp in order to sell/distribute the seeds.
  3. Industrial Hemp Handler’s Application – for those who will process hemp (i.e. make it into products).

Additionally, per the NDA’s website, a “harvest report” is to be submitted by an “active grower/seed producer” 15 days prior to crop/seed harvest.

How much does it cost to start a hemp business in Nevada?

Compared to starting a business in the marijuana industry, starting a hemp business is considerably less expensive. From the NDA website:

Industrial Hemp Grower:

  • Application Fee: $500.00
  • Acreage Fee: $5.00/Acre, or:
  • Square Footage Fee: $0.33/1,000 Square Feet

Industrial Hemp Seed Producer:

  • Application Fee: $100.00
  • Acreage Fee: $5.00/Acre
  • Square Footage Fee: $0.33/1,000 Square Feet

Industrial Hemp Handler:

  • Application Fee: $1,000

Other fees include:

  • Inspection costs at $50.00/hour. Inspector drive time will also need to be reimbursed. Please note that annual inspections are required.
  • Additionally, per the NDA website, “The Department may charge a fee for any analysis which it conducts.”

Conclusion

If you need help applying for a hemp license or have any further questions regarding Nevada’s industrial hemp program, contact Connor & Connor PLLC at 702-750-9139 today.

Starting a hemp business in Nevada can be tricky. As marijuana attorneys in Nevada, Connor & Connor knows the legal complexities of starting a hep business.

Growing hemp in nevada

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Budding Hemp Farmers Struggle To Find Success In The ‘Green Rush’

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Farmer Elizabeth Melson dries hemp in a converted garage in Sperryville, Va.

Hemp farming exploded after the 2018 Farm Bill passed last December. The bill decriminalized the plant at the federal level, opening the door for many U.S. farmers to grow and sell hemp.

Over the past year, licensed hemp acreage increased more than 445%, according to the advocacy and research group Vote Hemp. More than 510,000 acres of hemp were licensed in 2019, versus about 112,000 acres in 2018.

At the same time, products made with cannabidiol — a chemical compound found in hemp — are being sold everywhere from gas stations to CVS. CBD is promoted as a cure-all for anxiety, depression and post-traumatic stress disorder, even though the science isn’t there yet.

Farmers see an opportunity to get in on the “green rush.” But now, some are worried that their first harvest could leave them empty-handed.

The “green rush”

In Sperryville, Va., “there’s more cows than people,” Elizabeth Melson says. In the distance shadows lift off the Blue Ridge Mountains. Golden, crimson and scarlet ash and birch trees hiss in the wind, lining the Thornton River. Melson surveys a quarter-acre plot of hemp — the dense, Christmas-tree-looking plants shimmer in the morning light.

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Melson started farming seven years ago. Now, she manages a small farm for Sperryville eatery Off The Grid. But this is the first time Melson has grown hemp.

“We’re all in the green rush, we wanna grow for CBD,” Melson says. “It’s the most amazing, you know, hyped-up, nutraceutical on the market right now, and [I] didn’t realize how labor-intensive it was.”

Growing hemp for CBD is particularly grueling. Melson and her farmhand do everything by hand: cutting, picking and curing. They finished their harvest of 220 plants last week. To cure the hemp, the team hangs the plants from strips of neon-orange plastic safety fence on ceiling rafters and walls in a converted garage.

Still, Melson doesn’t have the space or the equipment to process the plant into CBD oil. There are companies that can process Melson’s hemp, but they’re maxed out. One company was supposed to come to the farm and pick up her harvest, cure it and broker it.

“And then they call back and they said, ‘We’re booked; we’re completely booked,’ ” Melson says.

Growing pains

Melson’s not alone. Hemp farmers across the U.S. are grappling with harvest challenges: erratic weather, a spike in hemp production and a dearth of processors and buyers.

“We really haven’t seen any type of production since the ’40s and ’50s in the U.S., so this crop is almost like starting brand new,” says Tyler Mark, a production economics professor at the University of Kentucky who researches hemp.

The young industry is going through growing pains. And it’s expanding quickly, Mark says.

Mark estimates about 250,000 acres of hemp was planted this year — an increase of around 220% from last year. Up to 90% of this year’s harvest will be processed into CBD products, he says.

That much hemp makes for a competitive market.

“So since we don’t have enough people to process it all,” Mark says, “you’ve got a glut, you’ve got an oversupply of [hemp] biomass in the market right now.”

Since May, the average price of harvested CBD flowers and leaves has gone down by around 50%, according to a report by Hemp Benchmarks, an industry publication. But at places such as CVS and gas stations, “we haven’t seen those CBD prices fall in those stores as much as we’ve seen the biomass price fall at the farm level,” Mark says.

Jane Kolodinsky, an applied economics professor at the University of Vermont, puts it more bluntly: “[Hemp farmers’] markets have bottomed out, and they don’t have buyers for their products.”

Many farmers who jumped into the industry after the farm bill passed are inexperienced, she says.

“It’s the farmers who just came in and decided, ‘Oh, there’s a CBD market — I’ll plant hemp,’ who really didn’t have a business plan,” Kolodinsky says. “They’re probably going to be hurt the most.”

What are the rules?

Even farmers who did have business plans are still learning the ropes of growing a new crop.

In lieu of federal hemp regulations, states have enacted their own rules. States such as Virginia and Wisconsin require farmers to produce hemp with no more than 0.3% total THC, the psychoactive compound that gets people high. If interim rules the USDA released last month are written into law, all 50 states will have to comply with the 0.3% total THC limit.

For farmers trying to grow high-quality CBD flowers, getting a crop within the 0.3% THC window can be challenging. The two cannabinoids “move together,” Mark says, so when CBD concentration goes up, so does THC.

Unlike soybeans and canola, it’s possible that hemp can go “from one day being a legal crop to the next day being an illegal crop, in terms of THC content,” Mark says.

How old the hemp is can also impact THC concentration, as can weather changes.

Wisconsin hemp farmer Phillip Scott struggled to find a balance with his crop this season. Scott switched to being a full-time farmer in 2018. The former UPS worker started farming after he was injured on the job. Nerve damage left him with a limp, and Scott found relief for his pain using high-potency CBD tincture.

“It was that or opioids,” he says.

Scott grew 37 acres of hemp this season, which he is processing into tinctures. But Scott had to burn 10 of those acres to the ground: They tested 0.1% over the acceptable limit for THC.

“Even if I lose one plant it’s a big deal,” Scott says. “It’s frustrating that we have to destroy any of those crops, but we have to comply.”

He estimates burning those 10 acres means a loss of between $150,000 and $1 million.

Farmer Tom Lauerman is hopeful. Lauerman has been farming cannabis for about 20 years and got into growing CBD-bearing hemp this year. He is creating tinctures, salves and lip balms on site.

“I think that’s a way that small farmers can actually do well in this industry,” Lauerman says, “make their own products, tell their story.”

The hemp side hustle

Some farmers are staying out of the CBD green rush altogether, opting for the long game by growing hemp grain and fiber.

Glenn Rodes is an eighth-generation Virginia farmer who raises turkeys and beef cattle and grows corn, soybeans and canola. He started experimenting with hemp in 2016, but this is the first season he could see some profits.

“For now it’s a very, very high risk, high reward on the CBD side,” Rodes says. “It would be lower risk, lower reward on the grain and fiber side. But we still think rewards nonetheless.”

Unlike most farmers, Rodes isn’t growing female hemp plants — those that yield CBD flowers and oil. He harvested 10 acres of male hemp bark, seeds and stalk this season. Those parts of the plants can be transformed into cosmetics, fabric, fuel, food, building materials and even plastic replacements.

Still, “It’s difficult to compete with things like petroleum when you can pump it out of the ground and manufacture,” Rodes says.

Rodes planted 10 acres of hemp. He even has the equipment to turn hemp seed into oil. But his shop isn’t up to food-grade standards, so he can’t sell the hemp he processes on site.

Rodes is currently in talks with hemp processors and buyers. He hopes to sell 35 bales of fiber, and 3,000 pounds of seed.

At this point though, hemp is still a side hustle.

“I’ve actually gotten that phone call from a dairy farmer wondering if he could save his farm,” Rodes says. “And I just had to say, well, it’s just too early. We don’t have the infrastructure. We don’t have the market right now.”

Growing hemp in nevada 1289 S. Torrey Pines Dr. Las Vegas, NV 89146 Staff Board of Directors Employment CPB Compliance Our Policies Our Business ]]>