The popularity of the cannabis plant has been consistently rising, and with the legalization of hemp, marijuana’s cousin, the hemp industry is having a renaissance. Ever since the 2018 Farm Bill legalized the use and production of hemp products, the hemp plant got its own respective seat at the table, and for a good reason. It’s not only useful for its stalks, seeds, and fiber, but it’s also abundant in CBD (cannabidiol), the therapeutic cannabinoid.
Many farmers who used to grow traditional crops are seeing the potential and converting to hemp, but how profitable is it? In this article, we’ll talk about the profitability of hemp as well as how to become a successful hemp farmer.
What’s the Profitability of Growing Hemp?
The global industrial hemp market is currently growing – it’s projected to reach $36 billion by 2026, so no wonder everyone wants to hop on the train. However, your profit margins will largely depend on what purpose you’re cultivating your hemp crops for.
Currently, the price for hemp grain ranges between $0.60 and $0.65 per pound. Given that an acre of hemp crops produces 1000 pounds of hemp seeds per acre and the production cost is around $300 to $350, you can make somewhere between $250 and $300 per acre.
An acre of hemp crops can produce a yield of roughly 2.5 to 3 tons of fiber. Hemp fiber goes for more or less $260 per ton, and the production costs are in the same range as the costs for hemp grain. Therefore, scrunching up the numbers would give us about $480 profit per acre.
The CBD market is the most profitable one, estimated to reach $55 billion by 2028. CBD oil is a very popular product, but so are CBD edibles and isolates, as well as other CBD products. However, with growing CBD hemp, you can face many variables as many factors can alter the final CBD content of the crops (which will also influence the profit margins). That said, you can expect to earn anywhere between $2,500 and $75,000 per acre. If you make sure to maintain the levels of CBD high, then your hemp crops will inevitably be worth more.
How to Become a Profitable Industrial Hemp Farmer
Assuming you’ve already applied for your license and know all about the paperwork involved, let’s dig into the specifics of how you can grow hemp for profit.
Choose the Right Strain for Your Product
The hemp crop is highly sought after for its CBD content for the production of CBD products, such as CBD oil and edibles. However, as the value of hemp as an industrial crop comes to the forefront, hemp fibers are also a big thing. As you know, hemp had a myriad of uses in the past before it became illegal, and it’s now being put back in the spotlight.
So you need to think about what kind of hemp products you will be offering. Will you be growing hemp for its stalks and fibers, for its nutritious seeds, for its smokable flowers, or for its CBD content? Different hemp products will require a different focus, so you should have a clear vision of this before you even purchase the seeds.
Better to Plant Feminized Hemp Seeds
Unless you’re growing hemp for the grain, try to avoid regular seeds. If you haven’t had any prior experience growing hemp or marijuana, it’s highly advisable to start with feminized seeds. They have a very high rate of producing only female plants, so ending up with even one or two male plants or hermaphrodites is very rare. This way, you won’t have to stress about sexing the plants or accidentally missing a male plant which will end up pollinating the females.
Don’t Plant Too Many Hemp Crops
Despite your initial enthusiasm when you start, you need to be realistic about how many acres you can cover. You shouldn’t go overboard here as it will neither be fruitful nor manageable for you. Each state allows for a certain number of acres for hemp cultivation, but as a beginner, only one should be enough until you learn the ropes and build confidence.
Allow for Trial and Error the First Year
The first year can be tough, but it will only go uphill from there. Expect to deal with a lot of challenges while you’re learning as you go. Preparation is very important, but remember that you will get the full grasp of being a hemp grower once you actually get down to business.
Keep in mind that however prepared you are, nothing will be perfect the first year. You will probably make some mistakes here and there, and that’s okay because it happens to every beginner.
Maybe you will struggle with pests, maybe the equipment you invested in will turn out to be a flop, or your management of the whole operation will be flawed, anything goes. So, make room for trial and error until you learn what both you and your crops need.
Connect With Experienced Hemp Farmers
Networking is important in any profession, and hemp farming is no exception. Even if you’ve had experience in growing other types of crops, you will still need to learn something new. Experienced growers can give you valuable advice based on experience about everything, so why not pick someone’s brain when you get the chance?
Optimize the Grow Site
Being a hemp farmer is a lot different than just growing a few hemp crops for pleasure, so maintaining your hemp garden manually by yourself is, of course, impossible. You will find that hemp farming is more labor-intensive than you might think. Sure, hemp is pretty resilient and sturdy, but if you want a high-quality crop, you can’t just leave it be.
Your grow site should be optimized so it would make things easier for you while still keeping the plants happy. This includes automating irrigation, using a berm-maker, or a utility vehicle to move through the grow site, to name a few.
Maintain Low THC Levels
As you already know, the Farm Bill legalized hemp production as long as the THC levels are maintained under 0.3%. Anything above this threshold could pose problems. That’s why you need to be mindful of the cannabinoid content in your hemp plants. Your respective state’s Department of Agriculture is likely to test your hemp crops to check if you’re complying with the law. Therefore, selecting seeds that have naturally lower levels of THC and using nitrogen can both affect the final THC levels.
CO2 Extractor Is a Worthwhile Investment
If you’re growing hemp plants with high CBD content to extract CBD, it’s highly advisable that you invest in an extractor. CO2 extractors pose a much smaller risk than working with butane, and not to mention it’s much more cost-effective and better for the environment overall. Raw, unprocessed extracts are highly sought after in the hemp industry, so it would be more profitable for you to sell the extract in its raw form for manufacturers to use than sell the biomass alone.
Diversify Your Products
Growing just CBD hemp or growing hemp for the seeds alone is great and all, but doing both is even better. Of course, you shouldn’t attempt this the first year, but over time, it would be much more profitable if you dedicate different acres of land to different types of hemp crops. You will not only increase your profit margins, but you’ll have a fallback in case there’s an unforeseen challenge.
Keep Track of Your Progress
As a beginner hemp farmer, keeping track of your progress is the best way to improve even further. Keeping a journal to document the whole process of establishing and building your hemp business will give you an insight into which areas are doing well, but also what you’re doing wrong, so you can make room for improvement.
Tracking your progress includes everything from listing which irrigation methods work to which hemp seeds to plant next to making an overview of finances and where you could make cuts (or invest more). Take note of everything and implement what you’ve learned the following year.
The Bottom Line
The hemp market is obviously growing and has great potential. Your revenue will largely depend on the type of hemp product you’re selling, with CBD extract being the highest on the list. To become a profitable hemp farmer, it’s best to take it slow the first year and track your progress so you can learn from your mistakes, take advice from more experienced peers, and do your best.