In 2017, the hemp pilot program in North Carolina attracted just 100 farmers. Fast-forward to this year and the number of licensed hemp growers has skyrocketed to 1,500. This number continues to grow day by day, so one would be driven to ask why hemp has attracted such huge interest. Several factors can explain why industrial hemp is likely to be more attractive as a cash crop in North Carolina in comparison to other states.
The Declining Export Market
The dwindling export market has had a devastating effect on farmers in North Carolina since a huge chunk of the produce grown in the state was sold overseas, especially to the Chinese market. To put this into context, consider the fact that in 2017, North Carolina exported tobacco worth $162 million to China. This export volume took a 98 percent hit in 2018 and only $4 million was earned by North Carolina from tobacco exports to China.
This huge drop in exports has left farmers in the state without a market for their produce, and hemp seems to have become legal to grow at just the right moment for farmers who were looking for a viable alternative.
Another aspect playing a part in declining exports is the recent surge in the value of the dollar. This rise has affected exports because U.S. products became less competitive on the world market.
Declining U.S. Tobacco Consumption
It is one thing to lack a foreign market while having a domestic market, and a totally different thing to have no domestic market and no foreign market. That is the reality facing farmers in North Carolina who had largely grown tobacco as their main cash crop.
The loss of the tobacco export market in China comes at a time when tobacco consumption in the U.S. is at an all-time low, which is like the final straw that was close to breaking the backs of farmers.
Randy Edwards is one farmer who has seen his family grow tobacco for 43 years. Edwards grew up in an area having more than 60 large-scale tobacco farmers, but he has seen that number dwindle to just two farmers over the past few years.
The declining domestic market for tobacco is largely to blame for this drop in tobacco cultivation. It is no wonder that farmers are taking on hemp cultivation in such large numbers since it is promising to be the lifeline that will revive their failing farms.
Similarities Between Hemp and Tobacco
Anyone who knows what growing tobacco requires will not be surprised by how readily farmers in North Carolina are taking to growing industrial hemp. For example, tobacco needs to be slowly cured before it is sold to processors, and hemp also has the same requirement. Farmers are therefore switching to hemp because they already have the drying facilities for this new cash crop.
While they say that when it rains, then it really pours, experts are convinced that hemp industry actors like Wildflower Brands Inc. (CSE: SUN) (OTCQB: WLDFF) and Canopy Rivers Inc. (TSX.V: RIV) (OTC: CNPOF) are hugely relieved that North Carolina farmers can now look to hemp as a way to continue cultivating the land that they love.
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