Efforts to legalize recreational marijuana are continuing to advance in the state Legislature and hemp farmers are starting to feel the impacts as the bill would move both products under one regulating authority.
Hemp farmers celebrated last year’s law that created a full regulatory system for the industry after years of deliberation on the topic.
Now hemp farmers are again bracing themselves for change, as the recreational marijuana legalization bill progresses. It creates a new regulation authority that will cover both cannabis and hemp called the Hawaiʻi Hemp and Cannabis Authority.
Grant Overton, CEO of Agripelago, an industrial hemp company that works on creating food and biofuel from the crop, said the potential new law is again creating uncertainty in the industry and impacting investment.
“We need capital investment to grow and regulatory uncertainty is something that gives investors reason to say no,” Overton said.
His company is already seeing the effects and started looking at options for other crops to work with instead.
“It’s going to and already has impacted the investment potential for hemp in the state of Hawaiʻi,” Overton said.
“And likely will do so for probably the next three, four or five years if not longer.”
Hemp and marijuana are from the same species of plant, but what makes them different is hemp contains 0.3% or less THC — which is the chemical that gets people high.
That’s why hemp is carefully regulated due to concerns that bad actors will derive other chemicals from the plant that will get people high and pass it off as legal hemp.
Another difference between the substances is that hemp is federally legal while marijuana is still considered an illegal Schedule 1 substance.
President of the Hawaiʻi Hemp Farmers Association Gail Byrne Baber explained that there could be impacts on insurance, banking and marketing platforms by co-mingling the two together.
“They don’t want to have to sort through, assume the risk of the responsibility of assuming what might be a Schedule 1 drug funds and what might be hemp,” Baber said.
She worries that despite the Legislatureʻs best intentions, the costly impacts of uncertainty will hurt the hemp industry.
“No farmer can afford that. No farmer in this state, just like every other farmer, we have the highest costs of farming in the country,” Baber said.
“This industry really was founded by food farmers and people who believed in sustainability in Hawaiʻi and most farms here subsidize food production with an outside job or something. Many farmers here grow passionately, especially since most of our farms are small family farms,” she said.
However, the state said it’s working with the hemp farmers as much as it can to minimize the impacts. It’s implemented adjustments like renaming the regulating authority to include the word “hemp”, adding a full-time hemp coordinator, removing some additional licensing requirements for industrial hemp products and creating a hemp grant program.
Currently, hemp is regulated by three agencies: the federal and state Department of Agriculture and the state Department of Health.
Deputy Attorney General Andrew Goff said the marijuana legalization bill would streamline regulation for hemp and in the long term create more certainty in the industry.
“It’s kind of like ripping the band-aid off,” he said.
“If we can get a consolidated agency together now, then moving forward, everyone has one point of contact, one agency to discuss these products with. And we can have a consolidated approach moving forward.”
The marijuana measure narrowly passed out of second reading in the House of Representatives last week in a 24-22 vote, with five members excused.
There were concerns from members about the safety of youth if recreational marijuana was legalized.
However, this is the furthest any piece of recreational marijuana legislation has gotten in Hawaiʻi, and that’s in large part due to the robustness of the measure, explained Rep. David Tarnas, Chair of the House Judiciary and Hawaiian Affairs Committee.
“The only reason why it’s made it this far is because the bill is so comprehensive,” he said.
“The House is more skeptical about this whole issue than the Senate. And so in my caucus, I have had a lot of members who say, ‘Here’s my problems with it.’ … and so my job was to come up with a bill that really addressed the concerns of members and mitigated the negative impacts.”
Tarnas was also clear that this effort to legalize marijuana is not to raise money for core government services. He said the taxes on recreational marijuana would fund the operation of the marijuana and hemp programs, and then anything extra should be going to mental health and substance abuse treatment.
The measure will be heard Tuesday in the House Consumer Protection & Commerce Committee.