Cannacurio #53: Hemp Licensing Trends in 2021

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Cannabiz Media tracks every cannabis and hemp license we can find. What is unique about hemp is how different states set up their licensing systems.

During hemp’s “growth” years, our database had nearly equal numbers of cannabis and hemp licenses, fueled primarily by hemp cultivation licenses. However, years of oversupply have reduced the number of people wanting to grow hemp.

Trends to keep an eye on in 2022 include retail hemp-level licensing and the growing role and influence of the Department of Agriculture.

Licensing Trends

Looking back at 2021, two categories stand out: Retailer and Cultivator. Together they make up almost 85% of the new licenses we’ve added to the license database.

CBD retail

CBD dealers are increasingly becoming licensed by regulatory bodies. We first wrote about the Louisiana program in 2019, when the State Bureau of Alcohol and Tobacco Control began licensing convenience stores, delis, gas stations, and grocery stores.

This phenomenon was repeated in Florida, but on a larger scale. We now feature a total of over 8,500 CBD retailers in Florida. Other states that issue these licenses are Utah, Alaska and Iowa. The latest entrant is Rhode Island, which has granted a retail license for “hemp-derived CBD consumables” and another for the distribution of “hemp-derived CBD consumables.”

Driven by CBD’s state legality, widespread adoption and, in some cases, royalty revenue generation, we will likely see this in more states.

Looking at the volumes of newly granted licenses, cultivation and retail make up the vast majority. While some of the other columns in the table below represent hybrid or stacked licenses that require multiple activities to be performed, the other important activity is processing.

In years past, processing has been a bottleneck in some markets, causing anger for farmers who failed to secure these resources early. Since hemp is legal at the federal level, this has become less of an issue as harvest can cross borders.

The other interesting license development again comes from the pioneering state of Louisiana. The state has issued 25 hemp event licenses! We’ve seen cannabis event licenses, but only California and Michigan have issued them. The Louisiana application is bulky with lots of warnings and scary language – but good for Louisiana when it comes to being creative.

federal effect

As the hemp industry matures, regulations become more complex. Like cannabis, hemp was regulated at the state level. With the passage of the Hemp Act of 2018, state and tribe licensing of hemp production has now been approved by the US Department of Agriculture. According to the USDA, the regulator has weighed 106 plans that include states, territories and tribes with different statuses:

Last fall, the National Agricultural Statistics Service surveyed about 20,000 American hemp farmers to gain insight into the hemp market. The Hemp Acreage and Production Survey collected information about hemp acreage, yield, production, price and value in the United States. The survey will provide the necessary data about the hemp industry to assist producers, regulators, state governments, processors and other key industry players.

“This first-ever hemp survey will provide a much-needed benchmark and much-needed data for the hemp industry,” said Kevin Barnes, acting NASS administrator. “The information collected can help inform producers’ decisions about growing, harvesting and selling hemp, as well as the variety of hemp they choose to produce. The resulting data will also foster a better understanding of the hemp production landscape among regulators, producers, state and tribal governments, processors and other key industrial players.”

The information, which will be released on February 17, 2022, could have a major impact on industry participants. It can help the industry gain a better understanding of multi-state operators as well as large single-state operators. Some industry experts believe that the acreage could remain the same in 2022, but the number of license holders could decrease.

So the hemp industry not only benefits from programs like crop insurance, but also from the full range of services that the Department of Agriculture offers to many industries. Agriculture Secretary Tom Vilsak recently referenced hemp when discussing $1 billion in grants to support low-carbon agriculture.

Conclusion

We expect robust hemp licensing to continue, and Cannabiz Media will monitor retail and distribution licenses, particularly as it focuses on the end of the “seed-to-sale” continuum. Additionally, the USDA, which serves multiple roles as licensor, funder and publisher, will have a major impact on the industry in 2022 and beyond.

Cannabiz Media customers can stay up to date on these and other new licenses through our newsletter, notification and reporting modules. Subscribe to our newsletter to get these weekly reports in your inbox. Or you can schedule a demo to learn more about how to access the Cannabiz media license database yourself to dig deeper into this data.

Cannacurio is a weekly column from Cannabiz Media featuring insights from the most comprehensive licensing data platform.