In case you missed the parades featuring giant doobie floats, the joint giveaways for the vaccinated or the general celebratory aroma of city streets, recreational marijuana is now legal in New York. While attention is trained on the new legal drug business the state is building, another even larger cannabis business is awaiting its day in the sun. Already legal to grow and process, industrial hemp is the potentially billion-dollar New York industry few are paying attention to yet. While it may take longer to scale up than recreational marijuana, industrial hemp could have even greater economic potential for the state.
Although most people are familiar with the drug marijuana that comes from the cannabis plant, far fewer know about the many uses for hemp, which looks similar, but has negligible amounts of the psychoactive chemical THC. For those who are familiar with hemp, they may most closely associate it with their local hippie stores next to the crystals and incense. But its uses range from textiles for clothes to construction material to food. “People are chasing these bright shiny objects, and I think those will have maybe short-lived potential,” said Daniel Dolgin, owner of Eaton Hemp in Central New York, of recreational marijuana. “I think there will be more losers than winners – there will be big winners, but the industrial side has much less sex appeal.” As companies seek green alternatives to traditional products from cotton (which is incredibly water-intensive to grow and process) to plastics, hemp is becoming increasingly popular. But it still must overcome a decadeslong disinformation campaign associating it with its closely related drug cousin, and set up the supply chains to compete with the major industries that helped to kill hemp in the first place.
Dolgin’s farm was one of the first to win a license under the state Department of Agriculture and Markets’ Industrial Hemp Agricultural Research Pilot Program established in 2015. Since then, he’s been growing his vertically integrated business – growing, processing, creating and marketing hemp products – as a sort of proof of concept to others interested in the industry. “We’re in sort of the innovation stage where you have to show like, hey, this can be done,” Dolgin said. Currently, Eaton Hemp has entered the pet care industry with a popular hemp pet bedding, among other products including hemp-based foods. The major roadblock now is getting other farmers interested in taking the potential risk, as well as getting investors and companies to buy into the industry, which takes time.
Eaton Hemp also sells CBD products, which are made from a hemp extract that for a brief moment completely dominated the hemp market. It’s not a drug per se, but it’s touted as offering a calming effect without the high of THC. Unlike with other industrial hemp uses that require a degree of risk in building up the market, CBD was a popular fad seen as an easy market to enter. The problem was that the market became oversaturated with products without proper regulations. Southern Tier Assembly Member Donna Lupardo, sponsor of various hemp bills, said that while she’s eager to get those CBD regulations finalized, the state is ripe to capitalize on hemp’s many other uses. “I have a briefcase – I call it my hemp sample bag,” Lupardo said of a briefcase made of hemp fibers that she uses to carry sample hemp products like alternative Styrofoam and building materials. “Once people see what’s possible, they’re very intrigued by it.”
New York is already in a good position to enter the slowly burgeoning industrial hemp market as a major national leader. “We’re already considered a leader in this industry,” Lupardo said, adding that the state was among the top five in the country in terms of licensed acreage before the pandemic. “We are absolutely viewed as not only innovators in terms of new products and new potential, we’re also viewed as a state that’s willing to push the envelope.” Daniel Walcyzk is a professor of mechanical engineering at Rensselaer Polytechnic Institute focused on hemp biocomposites as an alternative to the likes of carbon fiber. He said that he can think of no state that is more advanced in its research. “New York has the potential to be a key leader in bast fiber – including hemp – research, and development and application,” Walcyzk said. “There just needs to be more thought into where the funding is going to go.”
From an agricultural standpoint, New York is well-suited for growing hemp, which thrives in a temperate climate like the state’s, unlike cannabis for recreational marijuana, which does better in warmer climes. It is not water intensive; it helps replenish soil when used as part of a regular crop rotation (and can even be used for remediating brownfields with toxic or hazardous materials in the soil); and generally does not require pesticides or herbicides to grow as it naturally suppresses weeds. Also, it offers a high return on energy consumed to grow the plant as effectively every part can be used in some way. “Our motto is nothing goes to waste, because we use every part of the plant to create a viable product,” Dolgin said.
Certainly, the state is better suited for growing industrial hemp than recreational marijuana, most of which will likely be grown in energy-intensive indoor grow operations in New York. Jennifer Gilbert Jenkins, an associate professor of agricultural science at SUNY Morrisville, said that the state’s geography also is conducive to a robust industrial hemp industry as it has agricultural regions interspersed with small urban areas. “This means that materials don't have to travel far to get from farm gate to the first stage of processing,” Gilbert Jenkins said. “The geography of the state lends itself to ease of tying agricultural and industrial sectors together.”
In that vein, the agricultural side is just one part of the industry that could potentially benefit New York, with the processing and manufacturing side presenting a potential boon for the state as well. Gilbert Jenkins pointed out that the growth of the hemp industry could help revitalize rural areas that have lost manufacturing jobs in the past several decades if major industries decide to move into the state to process the raw materials they purchase. “That's the million-dollar question,” Gilbert Jenkins said when asked just how big this industry could be for New York. “I think it could be a great tool to use to revitalize downtrodden poorer areas of the state hurting for investment and job growth.”
Hemp also offers New York an avenue into the green jobs sector as more companies are looking to invest in environmental alternatives to traditional products. Much stock has been put into the prospect of solar panel manufacturing plants in the state, but hemp growing and processing is another way to grow the sector. Hemp could be a multibillion-dollar industry, particularly in the construction field, said Walcyzk. But it’s more than that. “It could be huge, but I think more importantly is that it's the future,” Walczyk said. “Oil is going to run out, natural gas is going to run out – and carbon fiber, by the way, is petroleum based. … (Hemp) materials have to be part of the engineering material future.”
Despite the multifaceted nature of industrial hemp, the state still has major roadblocks to overcome. First and foremost are the decades of disinformation about the plant after it was lumped in with the drug marijuana that depressed its use and research for years. Hemp was at one point a major crop in the U.S., to the point that colonial farmers were required to grow it. In the 19th century, Henry Ford famously created blueprints for a car built out of hemp biocomposites. In fact, in an article written in 1937, one magazine said that hemp was poised to become “the billion-dollar crop.”
But in the 1930s and later with the Nixon era and the Rockefeller drug laws, hemp got lumped together with marijuana as part of a concerted lobbying effort by major industries that stood to lose if hemp became too big, including petroleum (the producer of synthetic materials), cotton and paper. In fact, strict laws about and demonization of marijuana have been traced back to the attempt to kill the hemp industry when new inventions made processing it easier and cheaper than before. It wasn’t until the 2014 U.S. Farm Bill that hemp became legal to grow for research purposes and was given a definition to differentiate it from marijuana. So the state and many parts of the world similarly influenced by those big businesses have a long education campaign ahead of them to undo years of intentional effort to keep the hemp industry from burgeoning, even as attitudes change.
There is also the issue of getting investors interested in the industry, companies to set up shop or source from New York and support from the state. “There's no real way that farmers on our own can just create this industry through entrepreneurship and grit and hustle,” said Damian Fagon, owner of Gullybean farm in the Hudson Valley. “It has to kind of come from the top down with some guidance from the state.” Lupardo is working on her end to get buy-in from the state through conversations with Empire State Development, but she said that the pandemic has interrupted her efforts.
Dolgin said he has had conversations with the state Department of Transportation and the Executive Chamber about using hemp for phytoremediation – remediating land with toxins – and erosion control, but he also acknowledged the hurdles the state still needs to overcome. He compared the industry to different stages of development for the advent of the internet. “Right now, a lot of people who are kind of looking at the industry are looking at internet 3.0 and looking at uses for industrial hemp that don’t have a market, don’t have the technology, don’t have the efficiency, but it all holds a lot of promise,” Dolgin said. It’s why he says his company is thinking about “internet 1.0” by finding industries they can add products to for which there is already demand and buying hemp from other farmers to encourage them to begin growing it themselves.
Fagon also cautioned against pinning too much hope on the promise of industrial hemp in New York once the market begins to take off more and other states start to get involved in growing, manufacturing and processing. He said that while hemp textiles could help revitalize the likes of garment-making in New York City, he said that competing with other states with more farmland and infrastructure could put a damper on industrial hemp in New York. “Industrial hemp will be subject to the same push and pull factors that pushed the dairy industry out of New York,” Fagon said. He doesn’t want to see farmers fall into the same trap as with CBD, which promised big payouts but turned into a bust for many.
But many hemp proponents see a real opportunity for New York to enter the industry in a big way. And with a new governor in the Executive Mansion, they have renewed hope. “We have a governor who’s not afraid to have her picture taken with me standing next to a cannabis plant,” Lupardo said, recalling a 2017 picture then-Lt. Gov. Kathy Hochul asked to have taken at the state’s first industrial hemp summit. “She's very, very, very big on what we're talking about right here.”