For Minnesota to be national leader, more hemp farmers are needed

WACONIA — Just off Hwy. 5 in this quiet Carver County community sits one of the nation's largest hemp processors, Hemp Acres.

"Our goal in the next five years is to be processing 30,000 to 50,000 acres of hemp [annually]," founder Charlie Levine said Monday.

Only problem? That's a big jump in production that would match or surpass the entire U.S. hemp harvest last year when farmers reaped just 33,000 acres of hemp, according to the Department of Agriculture.

In Minnesota, hemp has quickly moved from a niche farming crop to a hot-button topic thanks to a series of updates to state hemp laws that legalized small amounts of hemp-derived THC to be sold in foods and beverages to those 21 and older.

The supply is not ready to meet demand. On Monday, Hemp Acres opened its 37,000-square-foot processing facility in Waconia — a first step in meeting that anticipated demand.

"We need to make sure we're sourcing that from inside Minnesota," Gov. Tim Walz said Monday at the grand opening. "Minnesota is ready to lead on this."

Hemp Acres can process hemp into products, but there also needs to be more hemp farmers.

The number of Minnesota growers and acres planted have fallen in the past two years from highs set in 2020.

There were 348 licensed growers in 2021 and 2,800 acres planted, according to the Minnesota Department of Agriculture. Just 233 growers were licensed this season, the lowest since 2018.

Even with the decrease, Minnesota had the third-largest hemp harvest in the nation last year.

The application period for hemp licenses in 2022 closed April 30, before the Minnesota Legislature provided legal certainty surrounding CBD sales and before the low-dose THC edible market became a surprise reality.

While CBD and THC are profitable parts of the plant, they are a small part of Hemp Acres overall business as an ingredient wholesaler.

The company largely will focus on the long list of nonintoxicating uses of the cannabis plant: oils, seeds, fiber and hurd. A number of other products and byproducts are sold in bulk to food, animal feed and clothing companies.

"We specialize in processing every aspect of the hemp plant, from the grain to the stalk to the botanical flower material," Levine said. "This new bill that passed is just basically tapping into one more ingredient of the hemp plant."

Food and drinks with up to 5 milligrams of hemp-derived THC, the main high-producing part of the cannabis plant, became legal July 1 after the Legislature included the measure in a suite of hemp industry reforms.

The law makes Minnesota an anomaly among states that have fully legalized — and taxed and licensed — recreational marijuana. Walz didn't comment directly on the new law Monday but said the state has the infrastructure to help hemp growers and processors succeed.

Canada, with an older and more well-developed industrial hemp industry, is Minnesota's main competition. Hemp Acres was founded in 2017, before hemp was made federally legal, and was Minnesota's first licensed processor.

Tony Cortilet, the hemp program manager for the Minnesota Department of Agriculture, said he'd like to see the state have 7,000 to 10,000 acres of hemp planted in the coming years.

"When you compare that to corn and soybeans, that doesn't seem like a lot," Cortilet said, "but it is a lot for a crop that's really trying to get started."

The Hemp Acres expansion, he said, is "really huge for our state" and can make that acreage goal a reality.

"Farmers like to grow crops, but they also like to have a place to sell and make money," Cortilet said. "And I know that on behalf of our hemp farmers statewide, they're going to really look at this as a boon to the industry moving forward."