In a couple of weeks, Jon Hegeman plans to start growing 200,000 cannabis plants in his greenhouses in White Plains.
It’s not the kind you smoke. But just a year ago, Hegeman’s industrial hemp operation would have been illegal in Alabama. Today it’s part of what may be the state’s biggest ongoing agricultural boom.
“We wanted to be one of the few, but everybody’s getting into it now,” said Hegeman, owner of Greenway Plants in White Plains.
Hegeman is one of 157 farmers across the state who’ve acquired licenses to grow industrial hemp this year under a new pilot program allowing farmers to grow hemp plants that won’t get people high.
Hemp as an ingredient in commonplace items is an idea as old as Lollapalooza and poncho hoodies: familiar to most and edgy only in retrospect. But interest in growing and selling hemp plants has picked up considerably in recent years as cannabidiol, or CBD — a chemical from hemp plants that many people believe has medicinal properties — has edged its way into legality even in weed-shy Alabama.
State lawmakers in 2014 agonized over a request to legalize medicinal CBD at the request of parents who said their kids needed the drug to fight a rare form of epilepsy. In the end, the Legislature split the baby, electing to give the University of Alabama-Birmingham permission to study the drug — enrolling sick kids into treatment with the drug for study purposes.
A study released in August found that the drug did indeed reduce the number of seizures. But by then, the market for CBD had grown far beyond a few sick kids. The 2018 federal Farm Bill had loosened up restrictions on CBD sales, and Attorney General Steve Marshall in December ruled that CBD from industrial hemp — again, the kind that doesn’t get you baked — is legal. CBD gummies and oils are now commonplace on convenience-store counters, near the tiny energy drinks and cigarette lighters.
The craze has attracted an unusual number of out-of-town residents interested in farming in the Alabama’s Appalachian foothills. Cherokee County has five hemp-growing licensees. At least two are real-estate salespeople from Rome, across the state line. One appears to be a Houston, Texas, resident.
“Yes, we have farmed before,” said Haley Baldwin Mullen, a Rome, Ga., real estate agent who holds one of the licenses. In curt, mostly yes-or-no answers, Mullen said she was already planting but wouldn’t say where. She cited a desire not to show her hand to competitors.
Calhoun County has one licensee besides Hegeman. Abel Resources, owned by a Birmingham resident named Mitchell Kessler, holds that other license. County records show a Mitchell Kessler owns land in Ohatchee. Attempts to reach him Wednesday were not successful.
State officials say they don’t know how many hemp planters are growing fiber, and how many are growing for CBD. It’s not part of the official application. Hegeman said he believed all were CBD growers. At Hope N Rope in Orrville — the one licensee with fiber implied in its name — a worker told The Star the plan was to sell CBD.
Hegeman said the trade is risky, and not because the product is just now legal.
“There are a lot of unknowns right now,” he said. No one knows the size of the market, he said. Plants have to be tested, and if they contain too much THC, the high-inducing part of pot, the plants have to be burned.
Hegeman is approaching it like the greenhouse grower that he is. His plan is to accept seeds from growers, grow them for five weeks into seedlings that are ready to use, and give them back to the growers to plant. Hegeman will get $1.25 per plant. Growers take on the task of acquiring legal seeds, and the state paperwork that goes with it.
“My business model is, I don’t grow a plant until it’s sold,” he said.
Henry Kinnucan, an agricultural economist at Auburn University, said Hegeman may have the right idea. He’s right that the business is risky, Kinnucan said.
“You can look at what’s happening in California and Colorado and, if you don’t mind a mixed metaphor, read the tea leaves,” he said.
Both states have legalized pot — the copacetic, recreational kind. Demand surged at first, Kinnucan said, and production rose to meet it. Now those growers are under stress as prices have gone down. There’s even a black market of unregulated marijuana, he said, further messing up prices for growers.
“It’s the paradox of agriculture,” he said. “Farmers are penalized for being too productive.”
Kinnucan said hemp could turn out like the emu craze of the 1990s, in which small farmers bought large flightless birds expecting a demand for their meat, reportedly leaner than beef. In The Star’s pages, emu-farming stories gave way in a couple of years to classified ads by farmers trying to get rid of the birds. Then there were news briefs of deputies chasing down or even shooting emus running loose on the highways.
There was also a catfish-farming fad, Kinnucan said, in which entrepreneurs tried to feed a real demand for fish, but overshot. He said farmers who raised fingerlings — little fish for sale to stock other people’s ponds — came out relatively unharmed. He said Hegeman’s operation might work out the same way.
“It’s a good short-term approach,” he said. “He can get rid of the plants quickly if he needs to.”
Hegeman is still keeping his eye on the long term. When the state offered licenses for hemp processors, he applied for one. He said he doesn’t know anything about hemp processing, but he knew the window for getting a license would soon close.
“We thought there might be only a couple of people in the market,” he said.