Minnesota hemp farmers hit brakes as the state's industry opens up

DRESBACH, MINN. — Pam Hartwell calls it her "little bonfire."

Earlier this year, half her inaugural hemp crop growing near a goat pasture "went hot" — that is, tested over the state's legal limit of THC. The Winona County farmer had to raze 20 plants.

"As soon as I watched it starting to grow — blooming really early — I knew I had questionable genetics," said Hartwell, who farms a small plot of land in the wood-choked Mississippi River coulee she grew up on.

Three months after Minnesota legalized hemp-derived THC edibles, the biggest logjam to a vibrant local industry could be on Minnesota farms. In addition to the quixotic regulations and fluctuating markets, botany may be the real problem.

At some point in the field, hemp can morph into outlawed marijuana without the farmer knowing it. State regulators visit every hemp farm within a month of harvest to cut samples. If the laboratory reports THC levels that exceed 0.3%, that crop is illegal. Minnesota offers remediation paths, but many growers destroy the plants.

The Minnesota Department of Agriculture says between 10 and 12% of hemp crops fail.

Consumer demand is one thing, but from the Minnesota farmer's perspective, why grow a crop you can't sell? Why plant a crop you can't even grow?

Farmers experiment

Just west of Austin, Minn., fourth-generation farmer Tom Cotter is renting grain bin space to a hemp farmer who will also likely have to destroy his harvest.

"He grew a beautiful crop," Cotter said, "But, it tested hot. And now he's going to lose his [expletive]."

On July 1, Minnesota stumbled into becoming the only state in the nation to legalize hemp-derived edibles. But the half-a-dozen farmers who spoke with the Star Tribune for this story say the lack of pass-through markets stymies even those smaller farmers looking to land their product in a local beer or gummy.

"It's kind of almost impossible for farmers to make money," said Cotter, who also co-owns Superior Cannabis Company, with storefronts in Austin, Duluth and Superior, Wis., and sells products developed from Cotter's hemp crop. "This hemp program was supposed to be for the Minnesota farmer."

Other farmers, who successfully grew legal crops, are still looking for reliable purchasers.

Nathan Collins, a farmer from Murdock, Minn., told the Star Tribune in July that he still had 98% of a hemp crop from 2019 sitting in a shop, after he was unable to find a buyer. Collins said he hoped to parlay his hemp into a growing CBD market for pets.

"There's no established anything," Collins said of the pathway to commercial markets.

It's a ubiquitous story across Minnesota's farm country: farmers eager to grow the new commodity, but pausing at the fine print. While Minnesota ranks third in the nation for the number of hemp acres planted — 2,830 in 2021 — the number of growers and the acres dedicated to hemp has shrunk since 2019.

Hemp advocates call it a wonder crop. The seeds produce oil used in homeopathic tinctures or mixed into a brewpub ale. The stalk can be processed to power batteries or dampen noise in a car. In 2021, before Minnesota's new law, revenue for industrial hemp topped $824 million nationally.

In commercial agriculture, however, that's not much. By comparison, corn growers in Minnesota that same year produced $6 billion worth of sales.

Regulator sees boom, then cooldown

Just a few years ago, the sentiment toward hemp in Washington D.C. began to soften, resulting in some more experimentation by old-school commodity growers as well as smallholder farmers who harvest by hand.

"When the 2018 farm bill was signed and went into effect — in late 2019 — we saw an explosion of licensees," said Katy Mutschler, hemp program manager with the Minnesota Department of Agriculture.

But since that burst, some farmers have abandoned hemp after crops failed or buyers didn't materialize.

According to a 2020 MDA report, 45% of hemp farmers listed "unknown" or "no buyer" for the end uses of their product.

Some farmers, Mutschler said, are looking to the flower market.

"Our acres are also dropping off because we're having more people produce" CBD, said Mutschler.

Growers who want the CBD rather than industrial hemp will use more greenhouses than fields, and will harvest by hand rather than use tractor combines. Mutschler said it's like "growing tomatoes, more than corn," which means fewer acres.

Reliable seeds

Historically, Minnesota farmers grew hemp, turning its durable grain into paper or fuel or rope for the military during WWII. But the industry went dormant mid-century as hemp vilification got wrapped up in the nation's war on drugs.

In a 19th-century shed tucked back in the woods in Winona County, Hartwell hangs the half of her hemp crop she didn't burn, reflecting on her lessons this first growing season.

Her hemp grew on a small patch of grass above her duck pond. Goats munched on the stumps.

"I got some [seeds] from a farmer I didn't know," said Hartwell, whose crop tested at 0.4% THC, just over the state's legal limit. "I could've moved up the testing, but the testing is so expensive."

Minnesota should be a leader on hemp, say top state officials, including Gov. Tim Walz, who visited Hemp Acres, a hemp processor in Waconia, this summer. But restarting that industry is easier said than done.

On 40 Acre Co-op, a hemp farm in rural Pine County, Angela Dawson said she's taken the sourcing into her own hands to ensure reliable genetics.

"I grew my own strain for the same problem that people had," said Dawson. "Quality. It's mainly a quality thing."

Unlike a seed store with Pioneer or other certified hybrid corn, growers say the hemp seed market still relies on a lot of trust.

At Verist Farms in Eden Prairie, Nicola Peterson says she and her husband, Aaron, are vertically integrated — selling their hemp directly to consumers.

"When we first got into this, we naively thought there'd be more infrastructure in our state that hemp would be eventually like corn, like soybean, like wheat — that there'd be a place to sell your biomass," said Peterson. "Four years later, that's still not the case."

End markets

Today, only 348 growers are hemp certified in the state, compared with 461 a year prior. The boom and cooloff is not unique. In Colorado, after state regulators saw 85,000 acres apply for hemp in 2019, that number dropped to less than 10,000 in 2021.

Minnesota state officials say the July 1 law is likely to boost applicants for the upcoming state-certification window, which opens in November and runs till the end of April. Many will wait and see what sort of maneuvers the state legislature makes.

"I think we'll see a gigantic crush of people at the very end of the application window," said Mutschler. "People are going to be smart."

In the meantime, harvest on this year's crop has begun — or ended — for many hemp farmers.

As a child, Hartwell recalls hiking in the bluffs of her parent's farm when she stumbled upon their tenants' "weird garden," which turned out to be marijuana. Afraid for their liability, her parents alerted the county sheriff, who ordered the crop destroyed. At her parents' suggestion, they disposed of it by fire.

As Hartwell watched her crop go up in flames this summer, it all felt full circle.

"Now I feel terrible," she said. "But burning our own felt cathartic."

Unlike those tenants, she'll have another shot at the crop on her farm next year.