In the wake of the Washington County Circuit Court's preliminary injunction against the Cannabis Reform Act (CRA), the Maryland Hemp Coalition advocates for a common-sense approach to regulating hemp-derived products. Despite the current legal uncertainties, there are steps we can take to establish reasonable regulations and foster the growth of the hemp industry during the 2024 legislative session.
Where Do We Go From Here?
While awaiting the results of the State's Appeal, collaboration with the Maryland Department of Agriculture (MD Dept. of Ag.) becomes crucial. Expanding licensing for processors and retailers, while establishing regulations for packaging, labeling, testing, combined with existing law for age-gating the sale of these products, similar to neighboring states like West Virginia, can promote consumer safety and protect the hemp industry.
Value-Added Agriculture Model
Hemp, recognized as an agricultural commodity under the 2018 Farm Bill, opens avenues for a value-added agriculture (VAA) model. Drawing inspiration from successful industries like beer, wine, and liquor in Maryland, we can apply the VAA concept to hemp-derived products. Products produced by these industries are considered “Value-Added” and raw materials for these products are produced by the diverse MD agricultural community. This aligns with the federal legality of hemp and its derivatives as agricultural commodities, supported by both state and federal courts.
VAA is crucial for several reasons. It elevates the value of farm products, particularly beneficial for smaller parcels. This approach stimulates job creation, promotes agri-tourism, engages the public, and builds strong communities. By increasing farm value, it ensures that farms continue to function as vital contributors to the agricultural landscape. In essence, Value-Added Agriculture is a versatile strategy that enhances economic opportunities, fosters community well-being, and sustains farming practices.
Encouraging Entrepreneurship
The Maryland Hemp Coalition proposes a concept akin to initiatives supporting "intoxicating" value-added agricultural products. Referring to a 2021 presentation to the Governor’s Intergovernmental Commission for Agriculture (GICA) by Grow & Fortify, the report defines VAA as altering raw agricultural products to increase their value to consumers, subsequently boosting revenue for farmers, producers, or processors. This approach, backed by supportive policies, can lead to long-term success for the hemp industry and the agricultural community in Maryland. As quoted in the report:
“Encouragement of the entrepreneurial spirit, as well as supportive policies will help farms and related businesses, succeed and thrive for generations to come”.
A Call for Unity
A quote by global cannabis industry expert and Corporate Attorney Robert Hoban emphasizes the need for unity within the hemp industry. Recognizing and respecting all uses of the hemp plant, despite controversy, is vital for the industry's success. The Maryland Hemp Coalition looks forward to collaboration to help the hemp-derived cannabinoid industry thrive, contributing significantly to Maryland's economy.
"For the world to fully recognize the 50,000 uses of the hemp plant, we need to stand in unity and support for all uses of the plant. Detach yourself from your notion about what the hemp industry is supposed to be, and recognize and respect your fellow entrepreneurs, hustlers, and the like. Respect all uses in hemp’s family of uses. All of them. You don’t send one member of a family, because of controversy and disagreement, into the wilderness to die or jettison them, you must embrace them and work with them or you really do not have a family at all. For hemp to succeed as an industry, the entire family of uses MUST be recognized and respected.” — Robert Hoban
Economic Impact
A comprehensive economic impact analysis by Whitney Economics reveals the substantial contribution of the U.S. hemp-derived cannabinoid industry to the national economy. With a conservatively estimated market size of $28.4 billion, hemp-derived cannabinoids outpace both the medical and adult-use cannabis markets combined (estimated to have a value of approximately $13-17 billion in 2022). Based on data from the American Brewers Association, total sales of hemp-derived cannabinoids were roughly the same as all of the craft beer sold in the U.S. in the same year.
Maryland stands to benefit significantly, with per capita demand for hemp-derived cannabinoids reaching $693,557,180. As the largest commercial industry in the state, agriculture employs around 350,000 people, including nearly 6,000 full-time farmers. The Port in Baltimore City, closer to the Midwest than any other East Coast port, is within an overnight drive of one-third of the nation's population. This economic potential creates an opportunity for Maryland to emerge as a key player in the hemp industry, but supportive policies are needed to make this possible.
Addressing False Narratives
A few false narratives spread against the hemp industry include: Selling intoxicating hemp-derived cannabinoids competes directly with cannabis products; and Hemp operators are not paying taxes. Contrary to false narratives, hemp-derived cannabinoid sales generate substantial tax revenues for states, exceeding $1.5 billion in sales tax. Also, the majority of the market for hemp-derived cannabinoids are individuals that have no interest participating in the medical/recreational markets.
A ban on retail sales or limiting hemp-derived cannabinoid products to MD cannabis dispensaries, does not eliminate consumer access, as many products are still available online, raising concerns about public safety, youth access, revenue diversion, and sales tax losses for Maryland. By establishing reasonable regulations and allowing the hemp-derived cannabinoid industry to operate independently of the medical/recreational cannabis industry, we can address these concerns while capitalizing on this industries economic potentials.
Conclusion
The Maryland Hemp Coalition advocates for a forward-looking, common-sense approach to regulate hemp-derived products, emphasizing collaboration with the MD Dept. of Ag. and drawing inspiration from successful VAA models. As we navigate the legal landscape, supporting the hemp industry can lead to substantial economic benefits, rivaling or surpassing other established markets, including alcohol and medical/recreational cannabis. Together, we can cultivate a thriving hemp industry in Maryland.
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