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Where does the industrial hemp/medical marijuana industry stand in Arkansas?

Businessman explains drive to bring new industry to the state

Approved by voters in the 2016 elections, medical marijuana is coming to Arkansas. Focus for many – pro and con – is the psychoactive side of the plant and products. But the industrial hemp side is also set to be farmed in the state.

Jason Martin is one of those at the forefront of bringing the medicinal and industrial businesses to Arkansas. Shortly before a Feb. 22 workshop aimed at education about the plant and industries being built around it, Martin spoke with Delta Farm Press about cannabis.

Among his comments:

How did you get involved with this?

“I grew up in Arkansas. All of our owners are Arkansans. Brian Madar and I founded the company.

“Back in 2011, I was in the franchise industry building brands across hotels, restaurants, service-based businesses – both from a Fortune 500 standpoint and also for someone at a mom-and-pop level wanting to go nationwide. That’s my background and corporate experience.

“Brian grew up an Arkansas farmer and had been doing it for 40-plus years. The oil and gas industry came into the state and Brian’s knowledge of the local area, farms and the like gave him an advantage in starting many service-based endeavors in the natural gas industry. He ended up doing that not only in Arkansas but into Louisiana, western Texas and even Pennsylvania. 

“Because our wives had been longtime best friends, we spent a lot of time together, vacationed together and had a lot of time to talk. So, in 2011, he and I decided to look into the cannabis industry. We wanted to do it in Arkansas as a main goal. That issue was on the ballot that year for medical marijuana and it failed.”

On what happened after the failed ballot measure…

“We decided to become even more familiar with the issues and started traveling several times a month around the country to find out about the cannabis industry. Early on, we found because we were registered citizens of Arkansas we weren’t able to own a lot of associated businesses in other states.

“What we did find, especially with hemp, were other opportunities. The cannabis industry, for marijuana – even if federally legal whether for medicinal use or (recreational) use – is the market size is only so large. There will only be so many people who will consume marijuana. Even though that number may be high, the bigger opportunity is with hemp.

“Some 50,000 products throughout history have been made with hemp. So, we wanted to tap into that.”

On the company’s specialty…

“We specialize on a medicinal product – a CBD (cannabidiol) that’s derived from industrial hemp. With it, you don’t have to worry about a drug test, worry about the psychoactive high of marijuana. You can still get the medicinal benefits without the things some people don’t want.

“In 2015, we launched Tree of Life Seeds in Denver with a master breeder. While most other breeders were trying to capitalize on the marijuana side of the business -- breeding up the THC levels to make it more valuable in adult use -- we met a breeder doing the exact opposite. He was trying to breed the THC out of the plant as much as possible while bumping up the other cannabinoids, like CBD and CBG, that aren’t psychoactive. Those genetics have been improved ever since and we’re working with farmers across six states.

“The biggest difference between hemp and marijuana is the THC. Under the 2014 farm bill, an industrial hemp product is qualified as anything with less than a .3 percent THC. Above that, it’s considered marijuana.

“California is only one of few states that allow marijuana to be grown outdoors. In Arkansas, it can only be grown indoors. The lighting, the nutrients and everything else needed to do that is very expensive.

“The difference is we can grow hemp outdoors in mass acreage as long as it’s in compliance with the .3, or less, THC level. It’s much more economical to do the outdoor growing for medicinal purposes. Of course, there are also hemp products making use of the plant fibers and other nutritional products, a type of concrete, animal feed and other things.

“One thing the farm bill did was to create a research program for hemp. What typically happened as the program came on, you could get a license from the state and grow one acre, three acres, 10 acres of hemp. The downside of the current set-up is almost all the industrial hemp is being imported into the country.

“Unless we can grow more hemp per farm in the United States, it takes a co-op of farms to have enough product to sell into a market. So, we’ve been able to help put those farms together to sell their full biomass at the end of harvest or to process their crops into oil that is used in medicinal products.”

More on hemp growing in other states…

“In 2017, nationwide there was just over 23,000 acres of hemp planted throughout the United States. 

“Those acres are very fragmented. But take a state like Colorado, the acres leader at 7,500 acres of hemp, and they’ve been at this since 2014. At this point, they’ve had enough farmers who’ve been compliant enough year after year and some are growing hundreds, if not thousands, of acres.

“The thing is, we’re all Arkansans and tired of throwing all this business to other states. And there have been mistakes made in other states. Arkansas has the opportunity to do things better than anyone else.”

Where do regulations in Arkansas currently stand? Are you expecting the rules to be in place in time for a growing season in 2018?

“We are expecting them to be in time.

“The rules are actually the second version, a draft, made available late last year. After public comments, the second draft was approved and released in late January by the Hemp Committee of the Arkansas State Plant Board.

“The Plant Board – and the people we’ve been working with have been great to work with -- has been given the task of drafting hemp-related regulations and enforcing those. The second draft will now go to the full Plant Board and a public hearing.”

Are you pleased with the process so far?

“Yes, we expect to have applications out in late March and farmers to be able to apply for the ability to grow or process industrial hemp in April. We’re happy with the rules as they’re put together now. They’ll need to be tweaked in later years but they’re just fine. Actually, the proposed Arkansas rules are really similar to those adopted by Kentucky.

“It’s a bit frustrating that it’s taken so long to get to this point. As we kept asking questions about the timeline we were told the dicamba situation was taking up everyone’s time. New projects couldn’t be looked at until that had been dealt with.”

TAGS: Regulatory
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