Source: POLITICO'S MORNING AGRICULTURE, 10/30/18

Now that the market for recreational marijuana has plateaued in the state (or become oversaturated, depending on who you ask), growers are increasingly turning to industrial hemp as the next hot cash crop.

Not long ago, Oregon was growing just a few acres of industrial hemp. Today, it's somewhere around 13,000 acres, Alexis Taylor, director of the Oregon Department of Agriculture, told MA on the sidelines of the American Agricultural Law Association symposium in Portland last week.

The CBD factor: "Initially everyone thought they were going to grow it for fiber, but that's not the market," Taylor said. "It's all going to CBD oil." Cannabidiol (broadly known as CBD oil) is not psychotropic (it generally contains very little THC), but it's popular for a variety of other uses, from topical pain relief to treating epilepsy and acne.

The demand for CBD oil is strong and the prices are good — plus extracting the oil requires less infrastructure than processing hemp into usable fiber. In addition to CBD oil, growers are also looking at using the leftover stalks for animal feed.

Regulating hemp at the state level: Oregon's ag department has one full-time cannabis policy coordinator, who works on policy and helps coordinate with other states that are growing hemp or want to start, Taylor said. Hemp growers and processors in Oregon have to be licensed with the department, a process that's considerably less expensive than getting cleared to grow recreational marijuana.

Oregon's state hemp inspection effort is housed under its nursery program. "It's a new industry," Taylor said. "How do you work through a regulatory system that allows them to continue to grow? It's an interesting challenge."

Farm bill hopes: With high-profile backing from Senate Majority Leader Mitch McConnell, the Senate farm bill included language that would make hemp just like any other commodity crop by removing it from the feds' list of controlled substances, in effect legalizing it nationwide. Hemp advocates have high hopes the provision will be included if a farm bill conference report can be reached.