New Mexico’s hemp growers still waiting to strike gold
The legalization of hemp is spurring U.S. farmers into unfamiliar terrain, enticing them with profits amid turmoil in agriculture while proving to be a tricky endeavor in the early stages (Nov. 21) AP Domestic
COLUMBUS — New Mexico farmers eager to cash in on the hemp craze the first year they could legally plant the crop say it did not pan out.
“It was like a gold rush,” said James Johnson, a Columbus-area farmer.
His Carzalia Valley family farm and produce company is famous for its sweet onions, but, this year, he also planted 142 acres of hemp.
Johnson, like many New Mexico farmers, saw an opportunity after the federal farm bill legalized industrial hemp last December.
Hundreds got licenses to grow hemp in New Mexico with an eye on the burgeoning market for Cannabidiol, commonly known as CBD, extracted from the plant. CBD is now found in a variety of products promising relief from a wide range of ailments, including chronic pain, insomnia and anxiety.
Many farmers coped with their own anxiety as they struggled with uncertainty of growing hemp in New Mexico.
“I think you would have a hard time finding a grower who made a profit, and if they are, it’s few and far between,” Johnson said.
A hemp strain named Nacho Libre at the Table of Beyond Organica during the 2019 New Mexico Hemp Conference, held in May at the New Mexico Farm & Ranch Heritage Museum. (Photo: Josh Bachman/NMSU)
He said his crop yield was lower and the CBD content was not as high as promised by the broker who sold him the seedlings. The price he got was also a third lower than he estimated at planting time, he said.
Johnson was also critical of the Department of Agriculture for the way it managed licensing. He said the greenhouse he wanted to use in New Mexico could not get a license in time to plant so he had to buy from California.
“How supportive is our state when they know that timing is everything?” Johnson asked.
NMDA was flooded with applications. The department so far this year has issued more than 400 licenses, including 276 licenses to grow outdoors totaling 7,540 acres, and 132 licenses for indoor growers totaling 8,334,424 square feet.
“The No. 1 thing we learned is we did not anticipate the level of excitement or the number of people who would actually get licenses,” said New Mexico Secretary of Agriculture Jeff Witte.
Jeff Witte, director and secretary of New Mexico Department of Agriculture speaks at the announcement of 420 Valley, LLC business in Las Cruces on Wednesday, Dec. 4, 2019. (Photo: Nathan J Fish/Sun-News)
The number of hemp license applications was more than double what the NMDA expected for a beginning program, according to Witte.
“There was a challenging year in the state, and quite frankly across the country, because there were a lot of people who jumped into it and basically oversupplied what was traditionally in the market,” Witte said.
There were plenty of novices trying their hand who had to cope with issues all farmers face from labor shortages to pests and weeds, according to Witte.
But even experienced farmers had to deal with uncertainty.
“This first year in New Mexico was very, very difficult,” said Lucas Ogaz, agronomist and harvest manager for Seco Spice.
His family has farmed chile in the Hatch and the Mesilla Valleys for four generations. Ogaz planted 20 acres of hemp on the same plot previously used for organic chile.
He and others looked for expertise from neighboring Colorado, which has legally grown hemp since 2014. But there was a problem with that strategy.
“Nobody had ever dealt with hemp in our climate, in our area,” Ogaz said.
Hemp plants. New Mexico State University regents approved the New Mexico Department of Agriculture’s proposed hemp manufacturing rule at its regular meeting Sept. 4. (Photo: Courtesy of New Mexico Department of Agriculture)
“You get so much sun, so much longer of a growing season that that plant is going to react differently in our area than in Colorado, California, Kentucky and in Oregon,” he explained.
As he watched farmers struggle, he and a team started Pharm True, a new company to manage the process from seedlings to processing to sales.
“A lot of inexperienced farmers who had never even farmed an acre in their life were jumping into this hemp game because they thought there was money to be made, not knowing there were some sharks in the water,” said Ogaz.
Ogaz and others said scammers moved in to take advantage of growers. Inexperience also meant some farmers did not produce quality hemp because of moisture, mold, insect damage or chemicals, according to Ogaz. And they struggled to sell their crop or find processors to extract CBD oil.
Others had to destroy part or all of their harvest because the level of THC was higher than the 0.3% allowed under federal and state law. THC is also found in hemp’s cousin, marijuana, but at much higher levels.
The climate, growing season and other stress on the plants meant some developed more THC.
More than 52 acres with approximately 3,927 plants were destroyed because of higher than allowed THC levels, according to NMDA.
NMDA inspectors supervised sampling crops on hemp farms, which are sent to an independent lab for testing. Those who meet the limit get a harvest certificate.
“We had 6- to 7-foot plants full of blooms, full of flowers, but they just didn’t meet the requirement for the state,” said former State Rep. Bealquin “Bill” Gomez of La Mesa.
When he was a member of the Legislature, Gomez sponsored a bill in 2017 to allow New Mexico farmers to grow hemp. Gov. Susana Martinez vetoed the bill passed by lawmakers, but the New Mexico Supreme Court overturned the veto in 2018.
State Rep. Bealquin “Bill” Gomez, D-La Mesa, pledged at a June 2017 meeting of the tax board to fight for additional state funding for the spaceport but also urged approval of using excess tax revenue for operations. “I want this to work,” he said of the spaceport. (Photo: Heath Haussamen/NMPolitcs.net)
This year, Gomez had to disc under or plow under some of his hemp plants that had THC levels that were above the limit, or “hot.”
“Some of my partners got some seed, and it turned out to be too hot. That was a half acre of probably the best plants in the valley,” Gomez said.
New Mexico farmers near the border area that is a lucrative drug smuggling corridor also had to contend with law enforcement confusion about hemp and its close cousin, marijuana.
“The feds don’t know the difference between hemp and marijuana,” Johnson said. His farm near Columbus is right on the border with Mexico. In September, as he was harvesting hemp, the smell of the crop permeated the fields and filled his large processing shed.
“I got a visit from Border Patrol; they wanted my hemp license, a copy of it, so I gave it to them,” he said.
A young Border Patrol agent, according to Johnson, asked “How do we know you’re not growing the real stuff?” He said he answered, “Why would I risk a 101-year-old legacy growing a crop that I know to be illegal.”
In September, during the harvest, authorities detained one of his workers. The same thing happened to one of Ogaz’s employees at a Border Patrol checkpoint near Hatch.
“Our machine harvester guy, he got hit by the border dogs. They ran through the truck and everything like that,” Ogaz said.
After they saw documents proving he was legally harvesting hemp, Border Patrol agents let him go through the checkpoint.
Despite the setbacks this year, many see a future in hemp.
“I knew this was probably going to be a learning curve. There’s no infrastructure set up yet,” said Hilda Chavez, of NNMCP Consulting.
At her practice in Las Cruces, as a traditional naturopath and Cannibas expert, Chavez works with medical marijuana patients but also sells CBD and other hemp products.
New Mexico medical cannabis patient consultant Hilda Luz Chavez is seen with legal hemp products used as a dietary supplement. (Photo: Anayssa Vasquez / for the Sun-News)
Chavez has been getting high-quality CBD oil from Kentucky, a state that has been growing hemp for years. She would like to use locally grown New Mexico hemp and is a consultant for some New Mexico farmers who ask, “What are the products we can make out of this so we can produce whatever you need?”
She sees a future in hemp beyond CBD with hemp fiber used for clothing, textiles and construction materials, including sturdy “hemcrete” as a substitute for concrete.
Many New Mexico farmers say that, despite the problems, they plan to grow hemp again. Others hope to apply the hard lessons learned this year to another crop they want to plant legally in the near future: marijuana.
“It will be happening, and we’ll look at it. This was a trial run, basically looking at the future of recreational marijuana, recreational cannabis,” Johnson said.
New Mexico’s legislature is expected to take up a bill legalizing recreational marijuana as early as January when the new session begins.
“That could open up even more opportunities for some of these New Mexico farmers just because of how big a market this marijuana thing is becoming. That stigma seems to be fading away,” Ogaz said.
New Mexico farmers eager to cash in on the hemp craze the first year they could legally plant the crop say it did not pan out.
After rocky first year, New Mexico’s hemp industry poised to bloom
By Stephen Hamway / Journal Staff Writer
Ricardo Berroteran, head of cultivation for Rich Global Hemp, tends to a hemp at the company’s Las Cruces facility. (Roberto E. Rosales/Albuquerque Journal)
Copyright © 2020 Albuquerque Journal
LAS CRUCES – Less than a year ago, tumbleweeds and out-of-service farm equipment were the most visible features of a massive abandoned warehouse in Mesilla Park, situated among the pecan and chile farms that have long defined agriculture in southern New Mexico.
Today, the 1 million-square-foot facility is the home of Rich Global Hemp, one of the largest industrial hemp growers in the state, and the facility hums with activity.
About 100 workers are busy checking irrigation lines, repotting immature plants and monitoring the tens of thousands of cannabis plants being grown indoors, even though spring, when outdoor hemp farms begin planting, is still months away.
In 2019 – the first year that hemp, marijuana’s non-psychoactive cousin, was legal in New Mexico at the state and federal level – Rich Global Hemp sold 1.2 million immature plants to New Mexico farmers, according to Ricardo Berroteran, head of cultivation for the company.
And that’s just the beginning.
Ricardo Berroteran, head of cultivation for Rich Global Hemp, tends to a hemp at the company’s Las Cruces facility. (Roberto E. Rosales/Albuquerque Journal)
Buoyed by state and city incentives and a year of experience, Rich Global Hemp, the brainchild of California-based entrepreneur Josh Rich, is planning to sell between 6 million and 10 million immature plants in 2020.
“Right now, we’re happy and we’re rolling right along,” Berroteran said. “And I think this next season will be pretty cool.”
Rich Global Hemp may be one of New Mexico’s largest hemp producers, but it’s far from the only company trying to capitalize on the newly legal industry. The New Mexico Department of Agriculture issued more than 400 hemp cultivation licenses in 2019, several times more than the agency forecast.
“We did not think we would have the interest in the first year,” said Brad Lewis, division director for the state Agriculture Department.
Growers and industry experts characterized 2019 as a year of trial and error, in which growers had to navigate which strains of hemp could endure New Mexico’s often erratic weather, while complying with state regulations and finding buyers for their new product. Some officials estimated that up to half the permitted acres never made it to harvest.
Despite the challenges, growers and state officials were quick to point out that New Mexico’s hemp industry has several advantages over other states’ – and potential for meaningful growth. Particularly in the southern half of the state, officials touted optimal growing conditions and an abundance of relatively cheap land as advantages for the new industry, which is estimated to contribute around $2 billion in sales nationwide in 2020.
“This seems to be a particular boon and opportunity,” said Davin Lopez, president and CEO of the Mesilla Valley Economic Development Alliance.
Because of that, a sense of optimism permeates the industry, with companies like Rich Global Hemp looking to double down on its first year in operation.
“We want this industry to boom,” Berroteran said. “It brings jobs to the area, it brings commerce, it’s good for the culture.”
How we got here
Brandon Junker, irrigation specialist for Rich Global Hemp, connects water lines inside a grow house for immature hemp plants. The company plans to sell between 6 million and 10 million immature plants in 2020. (Roberto E. Rosales/Albuquerque Journal)
Hemp fiber can be used in a variety of products, from rope to clothing to plastics, though those markets have been slow to re-emerge after production was legalized federally in 2018. Today, the hemp industry largely revolves around the production of cannabidiol, a compound that advocates claim has certain curative effects.
Last spring, New Mexico approved a legal framework to grow hemp in the state, in compliance with federal regulations. While New Mexico’s rules came after early adopters like Colorado and Oregon – which both legalized hemp production before it was legal under federal law – it created a framework before neighboring states like Texas, which is looking at starting production in 2020.
Still, there were plenty of setbacks in 2019. Lewis said some growers struggled to obtain seeds and immature plants in time to plant them.
Even for farmers who planted in time, some strains of the plant reacted poorly to New Mexico’s weather, according to Duke Rodriguez, president and CEO of Ultra Health, New Mexico’s largest medical marijuana producer and the parent company of Ultra Hemp.
The plant thrives in mild, dry conditions, but Rodriguez said a colder-than-normal spring across the state delayed planting, while a hot summer killed some plants in their infancy. Additionally, Rodriguez said finding plants that adjusted well to New Mexico’s famous winds proved difficult.
“The plant was hit with every challenge,” Rodriguez said.
Between the weather and the rocky soil, hemp strains like Cherry Wine – which had proven itself in markets like Oregon and California – disappointed in New Mexico.
Another challenge for the nascent industry was a shortage of processors who could convert the harvested plant into extract that could be used for CBD, both in New Mexico and across the country.
Jeff Anderson, agronomy and horticulture agent for Doña Ana County Extension Service, said many growers who didn’t find buyers for their product before planting struggled to find markets once it was time to harvest.
“You need to have nailed that down earlier,” Anderson said.
Still other fields went “hot,” or exceeded the allowable amount of THC – no greater than 0.3% – in a test sample, which prompts the agriculture agency to issue an order requiring the farmer to destroy his or her crop. Lewis said the department sent out 33 destruction orders, out of around 500 inspections.
Forecast for 2020
With a year behind them, growers and industry officials are working to address some of these unexpected roadblocks. Rodriguez said the tough growing conditions provided useful data on which strains were a good fit for New Mexico.
According to a report commissioned by Fathom New Mexico, a hemp exchange founded by former Democratic gubernatorial hopeful Jeff Apodaca, many of the strains that performed best in New Mexico had CBD levels between 14% and 23%.
He added that this information can be used to retain strains that do well in the state’s unique conditions and breed new ones, resulting in lower numbers of crops that are lost to heat or unexpected frosts.
Apodaca said his company, which consolidates hemp from farmers all over the state in a single location for processors to find, can also help alleviate New Mexico’s marketing woes when it comes to hemp.
Rather than forcing out-of-state processors to travel from Las Cruces to Farmington to find the right strain, Fathom will pick them up and transport them to the company’s Albuquerque facility.
“They’re not gonna fly to Albuquerque and drive from farm to farm to farm,” Apodaca said.
The shortage of processors remains a challenge statewide, one that the state is working to address. The New Mexico Economic Development Department has designated “sustainable and value-added agriculture” as one of eight key industries to focus on. Bill McCamley, Cabinet secretary for the New Mexico Department of Workforce Solutions, said the goal is to keep adding links in the supply chain, rather than sending more profitable portions of the industry to other states.
“We want to make the products that our agricultural products contribute to,” McCamley said.
One southern New Mexico company is taking a unique approach to adding processing.
After investing in a group of farmers based in Luna County in 2019, Rick Morales, a Las Cruces-based entrepreneur, decided to scale up his investment. He and his business partner found an empty 13,000-square-foot warehouse at 420 S. Valley Drive in Las Cruces, and decided it could house a new development that’s one part hemp production facility, one part entertainment complex.
The new facility – named “420 Valley” as an homage to the number associated with cannabis consumption as well as the facility’s location – is expected to feature a restaurant and brew-pub alongside a working hemp manufacturing facility and a retail shop that offers CBD products as well as branded merchandise.
Morales said he hopes the facility can open, appropriately enough, on April 20.
“We’re hoping that this is just our entry into the hemp space,” Morales said.
Morales, who was born and raised in Las Cruces and attended New Mexico State University, said he thinks the hemp industry can help transform a portion of the state that has long lost young graduates to other regions and states. After receiving up to $550,000 in funding from the city and state through the Local Economic Development Act, Morales said he plans to hire more than 50 employees.
“What I’m trying to do is create some jobs so these kids out of NMSU and even out of high school don’t have to leave,” he said.
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Can hemp get me high?
No. Both state and federal law caps THC levels at 0.3%, well below the threshold where hemp users would experience psychoactive effects.
Why do business leaders believe New Mexico can be a hemp industry leader?
Growers and state agriculture officials agreed that the cannabis plant grows well in areas with dry conditions and ample sunlight, both of which New Mexico has in abundance. Jeff Anderson, agronomy and horticulture agent for Doña Ana County Extension Service, said northern New Mexico has the potential to be home to smaller, high-end hemp producers, while the southern part of the state can be a leader in producing large volumes of hemp.
How can I start growing hemp?
As required by state law, New Mexico Department of Agriculture issues licenses to businesses and individuals producing hemp, depending on the results of a state background check. For a full list of license types and requirements, visit www.nmda.nmsu.edu/hemp-registration.
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