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What’s fueling the growth in North Carolina hemp production

A growing number of North Carolina's farmers are turning to hemp production as a new source of revenue, spurred by the popularity of CBD products and the Trump administration's trade war with China, which has hit the state's tobacco industry especially hard by decimating the export market. But is hemp production the future of family farms in North Carolina? Hari Sreenivasan reports.

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  • Hari Sreenivasan:

    While the legalization of marijuana across the United States gets all the attention, there is a close cousin of the plant; hemp which is having a moment. It's not the fiber of the plant which can be used to make everything from t-shirts to tote bags but the oil called CBD that can be pressed from the flower.

    It is not an FDA approved medication but proponents consider it a panacea for a wide range of ailments. So it is still labeled a wellness product similar to vitamins. What we found on our recent drive through the state is that this new interest in hemp might help save a group of farmers going through a tough transition.

  • Hari Sreenivasan:

    Randy Edwards has been harvesting tobacco for 43 years. Ever since he was a boy helping out on his dad's farm, tobacco has kept the family farm in business, through blight, droughts and hurricanes. Edwards is proud of the tobacco he grows.

  • Randy Edwards:

    Feel how thick that is. That's the good North Carolina quality of the crop.

  • Hari Sreenivasan:

    But this could be one of his last tobacco harvests. This year he's growing just half of what he did three years ago. Americans are using less tobacco. That's part of it, but most of the tobacco grown here is sold overseas. The number one buyer: China.

    Thanks to the strength of the U.S. dollar and the trade war that began last year, China made American tobacco so expensive to buy that it decimated the export market.

    North Carolina — the biggest tobacco-producing state– was hit especially hard.

    According to the state's Farm Bureau, in 2017, the state exported $162 million worth of tobacco to China. In 2018, they sent $4 million worth. That's a 98 percent drop.

  • Hari Sreenivasan:

    Edwards is one of the few tobacco farmers in his county who's been able to survive.

  • Randy Edwards:

    When I was a young boy there was 50-60 tobacco farmers in this area. As of today, there's two. Two left.

  • Hari Sreenivasan:

    The Edwards family have been farming for four generations with the next one on the way. But to hedge against the unsteadiness, there are now 50 acres of solar fields providing a steady income, and he is trying something new: hemp, it looks and smells like marijuana, but it's not. More on that in a bit.

  • Hari Sreenivasan:

    Why is this a hemp field now?

  • Randy Edwards:

    Because we've had so many problems with tobacco the last two or three years with the government tariffs and the U.S. dollar is at an all-time high right now.

  • Hari Sreenivasan:

    It's such a new crop, that there's a lot to learn. One challenge: keeping male plants out of the fields. A single male plant can spread its pollen over a seven mile range.

  • Randy Edwards:

    We've got to go through all the plants and look at the plants.

  • Hari:

    To see if a male one snuck in here.

  • Randy Edwards:

    It pollinates the rest of the field. And it lowers the quality.

  • Hari Sreenivasan:

    Is this going to be more labor costs for you?

  • Randy Edwards:

    Much more labor. Because every one of these right now has got to be cut by hand and carry it to the barns and dry it. And then strip the flower and buds to get it to the processor. This is very much a test, ongoing test. We're planting all the varieties that we can get our hands on.

  • Hari Sreenivasan:

    You're starting over.

  • Randy Edwards:

    Starting over. It's like backing up 100 years in time farming. A lot of it, going back to hand.

  • Hari Sreenivasan:

    So you feel like what, your grandpa, your great-grandpa?

  • Randy Edwards:

    A lot have made that comment lately. (laughing)

  • Hari Sreenivasan:

    Edwards isn't the only farmer experimenting with hemp.

    Five years ago, the 2014 Farm Bill allowed states to begin growing industrial hemp under "agricultural pilot programs" for research purposes. In 2017, North Carolina started its hemp pilot program.

    Last December, when President Trump signed the 2018 Farm Bill, hemp became a legal agricultural commodity to grow across the country for the first time. That new status has ushered in a flood of industrial hemp growers from North Carolina to Kentucky to Arizona.

  • Larry Wooten:

    I've never, I've never in all my days here on the farm, seen anything that was as hot as this hemp production right now.

  • Hari Sreenivasan:

    Larry Wooten is president of the North Carolina Farm Bureau. The state's industrial hemp pilot program began with 100 licensed growers in 2017. Now…

  • Larry Wooten:

    We have over 1,500 growers that are licensed to grow hemp now in North Carolina, and it's growing every day. That's as many hemp farmers certified as we have tobacco farmers.

  • Hari Sreenivasan:

    An hour south of Raleigh, tobacco farmer Ryan Patterson began growing hemp two years ago. He started with just 300 plants in a greenhouse. This year he planted 120 acres.

  • Hari Sreenivasan:

    What'd your neighbors think? He's growing pot?

  • Ryan Patterson:

    Yeah, everybody. I used to be called the 'mato man because I grow greenhouse tomatoes, and now everybody calls me the 'weed man'. (laughing) Guess you could be called worse.

  • Hari Sreenivasan:

    Hemp looks and smells like its cousin plant, marijuana, and is also part of the cannabis family.

    But there's a big difference: The primary psychoactive compound in marijuana is tetrahydrocannabinol, or "THC." It's what gives people a high. Hemp contains THC too, but in much smaller amounts. Under federal law, legal hemp must contain less than 0.3 percent.

    Recreational marijuana in states like Washington contains an average of nearly 20% THC, more than 60 times as much.

    Franny Tacy is a former pharmaceutical sales rep who says she found her calling in hemp farming. She grows 11 acres of hemp on her farms.

  • Franny Tacy:

    Hemp is the only crop that can feed, clothe, shelter and provide medicine.

  • Hari Sreenivasan:

    Tacy, who was the first female hemp farmer in North Carolina, is breeding hemp plants to have little to no THC.

  • Franny Tacy:

    Legally what identifies hemp is that it has less than 0.3% THC.

  • Hari Sreenivasan:

    Instead she is growing hemp plants to extract a different chemical compound also found in cannabis called cannabidiol, or "CBD". Tacy sells CBD products from her farm and others at one of her three stores in and around Asheville.

  • Franny Tacy:

    The tinctures are our number one selling product.

  • Hari:

    You do what with this?

  • Franny Tacy:

    That is taken sublingually, which means under the tongue.

  • Hari Sreenivasan:

    She sells everything from tinctures and lotions to chocolate bars and pre rolled cigarettes.

    Proponents like Tacy say that CBD helps reduce anxiety, depression, sleep deprivation. Those claims have not been evaluated by the Food and Drug Administration, but that hasn't stopped the CBD industry from growing.

    The CBD market was estimated to be worth $1.9 billion last year, and projected to surpass $20 billion by 2024. But Tacy says that before that there needs to be a way to ensure the safety of CBD products.

    Franny Tacy The biggest thing right now: this market is unregulated. Regulations are coming. And in an unregulated market, the most important thing for a consumer to know is where did it come from?

  • Hari Sreenivasan:

    For now, the FDA is still setting guidelines for the sale of products containing CBD.

    They recently said "…it is currently illegal to put into interstate commerce a food to which CBD has been added, or to market CBD as…a dietary supplement." And the agency has sent letters to companies warning them not to sell "unapproved new and misbranded drug products" and not to make "unsubstantiated advertising claims" .

    So far, the FDA has approved only one therapeutic use of CBD, as an ingredient in the anti-seizure drug Epidiolex, which is used to treat two rare pediatric diseases.

  • Hari Sreenivasan:

    Besides questions about CBD's medical benefits, there are also concerns about the accuracy of product labeling. In a 2017 Journal of the American Medical Association study, researchers bought 84 CBD products online and found 70 percent were mislabeled, containing different amounts of CBD than advertised.

  • Hari:

    How do you know how people react to something that they buy at your store?

  • Franny Tacy:

    We're not physicians. We're never going to say this is how you dose it. We say these are the resources. This is what we find. This is how it's generally taken and consumed. There's a very fine line there. We are here to help people. It is a wellness product. It is not a prescription.

  • Hari Sreenivasan:

    Besides questions about CBD's medical benefits, there are also concerns about the accuracy of product labeling. In a 2017 Journal of the American Medical Association study, researchers bought 84 CBD products online and found 70 percent were mislabeled, containing different amounts of CBD than advertised.

    Tacy allows customers to see lab tests for each of her products by scanning what's known as a "quick response code".

  • Franny Tacy:

    We have QR codes that even take you back to test results for the product we've grown.

  • Hari Sreenivasan:

    Tobacco-turned-hemp farmers like Ryan Patterson and Randy Edwards are well positioned for this new industry. Hemp, like tobacco, needs to dry out and cure before being consumed. Edwards says he can use the same equipment for hemp that he has used for decades.

  • Randy Edwards:

    The barns that we're using for tobacco now, and we've been for many years curing tobacco, but we're going to transition these barns over to dry hemp.

  • Hari Sreenivasan:

    Edwards says the existing barns and drying equipment will save him hundreds of thousands of dollars. After he dries the hemp, Edwards sells it to a company that extracts oil from the plant.

  • Calvin Whitfield:

    We're standing at Open Book Extracts processing plant that's under construction at this moment.

  • Hari Sreenivasan:

    Calvin Whitfield is the director of cultivation at Open Book Extracts, a wholesale CBD oil producer. Their new processing plant, built on the grounds of a former tobacco warehouse, is one of the biggest in the state. Whitfield says the investment will pay off.

  • Calvin Whitfield:

    We are projected to do $20 million worth of business in our state. Nationally in 2024 could be up to $20 billion in our country. That's a risk worth taking to us.

  • Hari Sreenivasan:

    Randy Edwards doesn't know if hemp will solve his problems. Because hemp is so new, there's no crop insurance. The best Edwards can do…

  • Randy Edwards:

    We're already trying and working with sweet potatoes and produce in small amount, and cows and hay and soybeans and wheat and corn, all the basic stuff. We're trying it all, and we got next door right here we're going to solar farms.

  • Hari Sreenivasan:

    So you're a solar farmer and a hemp farmer?

  • Randy Edwards:

    We're trying to be.

  • Hari Sreenivasan:

    What happens if this experiment doesn't work out for you?

  • Randy Edwards:

    We're going to lose a lot of money. That's it, no bottom line on that, it's going to be rough.

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