Is Colorado's Hemp Industry Ready to Rebound?

After some fun early years, Colorado's hemp industry started stumbling in 2019. Fewer farmers are growing it now, according to the Colorado Department of Agriculture, and big companies have showed less interest as the federal government continues dragging its tail regarding CBD, a non-intoxicating compound found in cannabis that's become a popular wellness supplement.

As the supply chain continues to fluctuate and the federal stance remains cloudy, there could be more hard times in store for the state's hemp industry, according to Liz Geisleman, co-CEO of hemp science firm Rocky Mountain Reagents and founder of hemp trade group Canna Consortium. Before Geisleman and dozens of other hemp experts speak at March's NoCo Hemp Expo, one of the country's largest annual hemp conferences, we caught up with her to take Colorado's hemperature.

Westword: After some bumpy years in 2019 and 2020, how did Colorado's hemp industry fare in 2021?

Liz Geisleman: In 2021, we saw a fairly large reduction [on the national level] in hemp cultivation acreage from the prior two years, a drop of almost 44 percent from 2019. The FDA’s lack of action and clarification has hindered the opportunities for CBD, causing potential nutritional, dietary and personal-care companies to hold off before making substantial investments. On the fiber side, we still don’t have the resources and national investment to make big moves there, either. We also saw a record number of companies merge, get acquired or have to close their doors this past year.

All in all, I feel 2021 was a reflex year, but all is not lost. Technologies and innovation for this market are pushing the needle forward. I expect to see improved efficiencies and more innovative uses coming forth that will reduce production costs and reinvigorate more of the plant to be used across multiple markets.

Does the number of registered hemp farmers and amount of acreage reflect the state of Colorado's industry, or is there more to it?

We have seen a huge reduction here in Colorado. A 46 percent drop from 2020 in acreage. I think this is just an indicator of the market. I am not optimistic that we have seen the bottom yet. I believe Colorado has a strategic advantage to rebound faster than other states because of our strong policies, support from key elected officials and longevity in hemp production.

Is COVID still impacting industrial hemp, or has the industry pushed through most of that?

COVID will continue to impact this market for at least the next twelve to eighteen months. The pandemic exposed many weaknesses in our system of doing business, which includes the hemp market. Some prominent examples of these weaknesses that many in the hemp industry still face include workforce shortages, transportation scarcity and supply-chain disruptions globally. Hemp legislation and FDA rulings have been pushed aside to handle the more emergent issues of the disease and the economic recovery. With hemp companies struggling to stay solvent, they don’t have the resources to push Congress to act. I suspect we will continue to be on the back burner for the next year.

How much does the CBD market impact the hemp industry overall nowadays? Has the fiber/seed side taken more of a chunk?

For now, I see CBD and other isolated cannabinoids continuing to be the drivers. In states that don’t have strong policies around hemp, there will be a continuation of production of these products while they can. It is encouraging to see an increase in food products made from hemp becoming more mainstream. The innovations coming forth from the fiber side of the industry are even more exciting. Seeing major brands commit to using hemp in their production is a great leap forward. BMW now uses hemp fiber in the door panels of the i3 due to its low weight and insulating properties.

How much has Delta-8 THC impacted the CBD and hemp markets?

Delta 8 was just the beginning of the trend toward minor and novel cannabinoids produced from CBD. There are too many to mention at this point, and they continue to be discovered or created. It is a bit of a double-edged sword: On one hand, you don’t want to stymie innovation of new products that could have great medicinal properties unlike anything currently on the market. On the other hand, there has been clear evidence that some of these products are being produced and sold with little concern for public health, particularly in states with weaker policies on hemp.

In your eyes, is Delta-8 THC a good long-term play for someone in the hemp or CBD space?

I would use caution here. I think, overall, we will see a place develop for Delta 8 (as well as Delta 10, THCV, THCP, HHC, etc.) and other minor and novel cannabinoids, but legally they skirt the line a little too closely for my liking. It would be difficult to invest heavily in those types of products without federal or state clarification of their lawfulness.

Where do you see Colorado's hemp space going in 2022? What factors are going to impact that path?

[This year] is lining up to be much like 2021. There are still many companies struggling to stay above water, and there are not a lot of funding options to hold them up. Unfortunately, we will continue to see mergers, acquisitions and closures due to lagging demand. I hope to see the fiber side continue to grow and innovate new products, especially in light of national and international supply-chain disruptions. We have a rare opportunity right now to produce products that traditionally used petrochemicals, such as bio-based plastics and textiles, to fill the gap.

With those issues in mind, what are you excited to speak or learn about the most at the NoCo Hemp Expo? Any cool vendors or products you want to see?

The Canna Consortium and I will be speaking about the continual supply-chain crisis and how to insulate your business from potential interruptions. Being a huge nerd, I am always excited to hear about new technologies and public policy and hang with my cannafam. There are far too many exceptional companies that attend to highlight just one. This is the one show you can’t miss if you are interested or working in the industrial hemp market.

The NoCo Hemp Expo will be at the Gaylord Rockies Resort & Convention Center, 6700 North Gaylord Rockies Boulevard, Aurora, from March 23 to March 25. Find out more about the expo and buy tickets at nocohempexpo.com.