Hemp production growing sharply in Kentucky as processors start to make limited investments

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LEXINGTON, Kentucky — Kentucky's second hemp crop in decades is expected to surpass 1,700 acres, up from about three dozen acres a year ago, as the versatile crop's comeback starts to attract interest from processors looking to turn it into products, state agriculture officials said Tuesday.

Hemp advocates led by state Agriculture Commissioner James Comer touted the crop at an event in an old tobacco warehouse that could symbolize the past and future of Kentucky agriculture. Tobacco production has plunged in the past decade, and farmers have looked for alternative crops to maintain income. Hemp, which once flourished in Kentucky, is seen by some as one potential option on the farm.

Comer predicted that within a decade, hemp will take its place as a major Kentucky crop.

"We've proven this is a viable industry in this state," he said. "We've proven that our farmers want to grow it. We've proven that we can grow it."

Kentucky has been at the forefront of efforts across the U.S. to revive hemp, but for now, hemp production is limited to pilot projects.

Growing hemp without a federal permit was banned in 1970 due to its classification as a controlled substance related to marijuana. Hemp and marijuana are the same species, but hemp has a negligible amount of the psychoactive compound that gives marijuana users a high.

Hemp got a limited reprieve with the federal farm bill, which allows state agriculture departments to designate hemp projects for research and development in states such as Kentucky that allow hemp growing.

Hemp is prized for its oils, seeds and fiber. The crop was historically used for rope but has many other uses: clothing and mulch from the fiber; hemp milk and cooking oil from the seeds; and soaps and lotions.

The next step, hemp supporters say, is to win congressional approval to deregulate the crop, allowing any farmer to grow it.

Kentucky agriculture officials received 326 applications to join pilot projects this year, Comer said. They approved 121 participants that will lead to more than 1,700 acres of hemp being planted, he said. Seven universities will participate, and more than a dozen processors were approved for research and development, he said.

There won't be an issue with imported hemp seeds being held up in customs. The U.S. Drug Enforcement Administration has approved the state agriculture department's permits to import seeds for the hemp projects, state officials said Tuesday. Hemp plantings are expected to start in Kentucky later this month.

One big obstacle remaining is attracting processors and manufacturers to turn Kentucky hemp into products.

Comer on Tuesday introduced a few company executives at the forefront of those efforts.

Andy Graves, CEO of Atalo Holdings, said his company has invested $1.5 million in gearing up to process hemp into oil and food products. Graves said some 30 farmers will supply his company with nearly 550 acres of hemp to process at the facility it's developing in Clark County in central Kentucky.

He said his company is prepared to ramp up production in coming years.

"If we're successful this year, we look to have 2,500 to 5,000 acres next year," Graves said. "There will be that many growers coming toward it."

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