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High Plains Ag Week 4/12/2021 – Costs from Hemp Final Rule

On January 19, 2021 the USDA published the final rule, “Establishment of a Domestic Hemp Production Program”. The rule includes a valuable estimate of costs for those considering hemp production. For a review of the legal aspects of the final rule, check out this Texas Ag Law Blog post.

Dates and Deadlines

4/23/2021 – Cattle on Feed

4/27/2021-4/28/2021- Hemphill County Beef Conference

4/29/2021 – Swisher County Spring Meeting

What I’m Reading

Online Hemp Video Curriculum

A few weeks ago I wrote a post on Texas A&M AgriLife’s new Online Hemp video series . In this post we cover economic and legal considerations for hemp production in Texas. The series covers a wide variety of topics including the basics of hemp production, laws and regulations, hemp budgets, and crop insurance.

Estimated Costs for Hemp Production

One of the challenges for economists is the lack of data available for predicting prices and costs for hemp production. With hemp margins appearing to shrink since legalization, this data is important to predicting profits. USDA’s final rule includes estimates from several years of data collected on nationwide production that can provide some clarity.

Prices

The most common question about hemp that I get is, “How much money will I make?” What those folks actually mean is, “What is the price I’ll get?” This is one of the more difficult pieces of the hemp profit equation to estimate. Markets are different in every region, sale packaging is different (lots, pounds, bales) depending on the buyer and seller, and there really isn’t a lot of information overall. USDA’s final rule provides an estimate of assumed prices for 2020 and 2019, citing earlier studies. In Table 5: Calculation of producer sales attributable to the rule, USDA lists a price per pound for CBD.

First, the table lists the price of cannabinoids as $3.90/lb. during 2019 and 2020. I should note that processors have recently suggested that price per pound is the more common pricing structure now as opposed to the original structure of price per percent of CBD per pound. The listed price of $3.90/lb. is likely higher than real prices at the moment. Anecdotally, we are seeing offers of approximately $0.35/percent CBD/lb. If we assume 6% CBD per pound of hemp, we come to an approximate price of $2.05/lb.

Second, the table also lists prices for fiber and grain. Long term, I see these as potentially profitable opportunities for our High Plains crop mix. The USDA Final Rule estimates a price of $0.09 and $0.53 for fiber and grain, respectively.

Testing and Disposal Costs

Two aspects of production unique to hemp are testing and, depending on compliance, disposal. These unique costs have been a big question mark in forecasts of profitability. Up to this point, little data existed. As of the publication of the Final Rule we have the first estimates of these costs nationwide.

First, sampling and testing. If you’ve kept up with hemp production news you’ll know that ‘going hot’ is a big concern. Any hemp plant with THC levels in excess of 0.03% is technically ‘hot’, and noncompliant. Testing methods and responsibilities vary by state, but all costs are borne by producers. USDA’s Final Rule estimates sampling and testing costs at $565/lot. A more useful figure is the cost per acre. Total testing cost for U.S. hemp production in 2020 was $3.2 million across 159,102 acres of hemp grown for cannabinoids, fiber, and grain. That means that the average testing and compliance cost of hemp in the U.S. was approximately $20/acre in 2020.

Second, there is the concerning cost of noncompliant hemp disposal. Again, methods vary by state, and a few states have reportedly relaxed constraints and destruction costs for the last year as a sort of ‘grace period’ for noncompliant crops. Still, the cost of destruction is worth factoring in to budgets, particularly for hemp grown for cannabinoids. Evidence suggests a correlation between higher CBD levels and higher THC levels, which means pushing your CBD crop to yield more profit may bring you closer to noncompliance. With that in mind, the USDA Final Rule lists average cost of disposal across all methods at $14.25/acre. USDA approved methods of disposal include plowing under, mulching or composting, disking, bush mowing, chopping, deep burial, and burning.

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Record Keeping and Reporting Costs

In addition to the costs of physical compliance and, in some cases, destruction there are increased record keeping and reporting burdens to consider for hemp production. For Texas specific record keeping and reporting procedures, visit this post from the Texas Ag Law Blog.

These costs are measured using the total hours to comply and the value of those hours. USDA reports an estimated 2.14 hours per producer for record keeping and compliance annually. Across the U.S. reporting and record keeping costs totaled $2.56 million in 2020. When we divide that by the 159,102 acres grown that year, we come to an approximate record keeping cost of $16.09/acre of hemp produced.

Takeaways

While we don’t have a publicly available pricing tool available for hemp producers at this point, we are beginning to see more data on costs. So, what should you do with this data? If you haven’t checked out our video series from the first section, give it a watch, and take the survey to let us know what else you need on hemp. The series is a good place to start. Then, when using the budgets be sure to consider the compliance costs for compliant crops, which average $36/acre nationwide, when forecasting your returns from producing hemp. Long-term, I don’t know that we’re going to see hemp be the agricultural revolution it was sold as two years ago. However, I do believe with some planning and learning, hemp has the potential to be a profitable part of the High Plains crop mix over time.

CBD Oil in Texas: Is It Legal & Where to Buy in 2022

If you want to buy CBD oil in Texas, the source of your product is paramount. Although CBD oils made from hemp are federally accepted, marijuana and its derivatives are strictly prohibited in this southern state.

CBD has become the latest trend in the world of health supplements. It has a wide range of documented health benefits and people use it to relieve a wide range of physical and mental problems, including pain, inflammation, anxiety, and neurological disorders to name a few.

The easiest way to get quality CBD oil in Texas is to find a reputable online retailer; online stores offer better deals on CBD products than most local suppliers in Texas.

However, before we highlight the best sources of CBD out there, let’s focus on the legal status of CBD in Texas.

Is CBD Oil Legal in Texas?

The Texas CBD laws vary depending on its source.

CBD can be extracted from hemp and marijuana; both plants share the same parent, but they definitely don’t share the same chemical profile. In fact, they’re usually worlds apart in terms of their cannabinoid ratios.

Marijuana is THC rich, which means consuming marijuana-derived CBD oil can get you high.

Hemp has only a trace amount of THC (up to 0.3%) and higher concentrations of CBD. The chemical profile of hemp makes it unable to produce any intoxicating effects.

Below we explain how the Texas law treats both plants.

Marijuana CBD Oil in Texas

Texas has one of the strictest marijuana laws in the United States. Marijuana is illegal for recreational use and severely punishable. Getting caught less than two ounces of weed can result in a $2,000 fine and up to 180 days in prison. Possession of higher amounts can get you into prison for up to 2 years and make your bank account $10,000 lighter.

Hemp CBD Oil in Texas

The US federal government legalized hemp when President Trump signed the 2018 Farm Bill. Hemp was removed from the list of controlled substances and became an agricultural crop. It is now federally legal to grow and sell hemp for commercial use, including paper, clothing, fuel, building materials, food, and health supplements such as CBD oil.

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As with many federal regulations, individual states can either fully accept the new law or place their own limits on the availability and labeling of CBD. To potentially clear the gray areas, Governor Greg Abbott introduced House Bill 132. The bill legalized hemp farming and the sale of hemp-derived CBD products as long as they contain no more than 0.3% THC.

The catch with the Texas law is that the police use field tests that aren’t designed to distinguish between marijuana-derived CBD oil and hemp-derived CBD law. This means that you can still get detained for possession while your products undergo further tests in a laboratory.

Therefore, if you want to avoid troubles with the law, you should always buy CBD oil that comes with a Certificate of Analysis from an independent laboratory. It’s the only way to prove the police that your oil actually contains less than 0.3% of THC.

Speaking of which, let’s discuss the dos and don’ts of buying CBD oil in Texas.

Can Doctors Prescribe CBD Oil in Texas?

Texas legalized medical marijuana for epilepsy patients in 2015, although the program is one of the poorest in the country.

The Texas Compassionate Use Act allows patients with severe and intractable epilepsy to purchase low-THC CBD oil if a doctor decides it’s the best treatment. Then, you need to make an appointment with a second doctor that has to examine your health and agree with the first one.

Long story short, if you’re looking for any form of marijuana-derived CBD in Texas, then you’re out of luck.

Fortunately, there’s still a way to get legal CBD oil in the state.

Where to Buy CBD Oil in Texas?

Since hemp-derived CBD is federally legal, you can find it over the counter in health retail outlets, head shops, and vape stores. Your best bet to getting quality CBD without breaking the bank — and ensuring you don’t cross the Texas law — is to find a reliable online supplier.

Below we explain why the majority of CBD transactions are made online these days.

Benefits of Buying CBD Online

Shopping for CBD online is easier and more convenient than in-store.

Online stores usually offer a broader selection of products than local suppliers. You can choose between tinctures, edibles, capsules, concentrates, vapes, topicals, and even pet products. Physical stores typically have one or two types of CBD available due to limited shelf space.

It’s also easier to do your research on any company. You can read their websites, check lab reports, read user reviews, or reach out to different social media groups and forums for help from experienced customers.

Not to mention that you can do it in the comfort of your home, without the need to bounce from one store to another.

But most importantly, buying CBD online saves you money. Since there’s no middleman involved, online retailers can offer better deals on their products. You can take advantage of discounts, bulk pricing, coupon codes, and reward programs.

Full Spectrum CBD Oil 1000mg

Broad Spectrum CBD Gummies 25mg

CBD Capsules 25mg (Softgels)

For example, at Royal CBD, you can join our Royalty Program and collect special crowns that you can spend on your next orders. This way, you can save more on your favorite products or try out something new for less.

Local Retailers in Texas

Some people just need to head to a local store and touch the product or talk to customer service about their CBD needs. If you’re one of them, we’ve prepared a list of local retailers in Texas. All of these shops should be able to answer your question and point you in the right direction to help you choose the right product.

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CBD Stores in Houston
  1. Houston CBD LLC
  2. American Shaman CBD
  3. VaporFi
CBD Stores in Dallas
  1. CBD Kratom
  2. The Cherry Apothecary
  3. 710 Vapors
CBD Stores in Austin
  1. Restart CBD
  2. Phoenix Vapor Shop
  3. Austin Vape & Smoke
CBD Stores in San Antonio
  1. CBD Relief
  2. Texas Vape Store
  3. CBD Vape Smoke Shop Chevron

If you don’t see your city on the list, make sure to check for a reputable store online.

How to Find Quality Products in Texas?

CBD is a booming market but it lacks regulation when it comes to the manufacturing standards. There are many companies selling great products, but there’s an equal number of suppliers that don’t care about customers from more than just a business perspective.

If you’re new to the world of CBD, it may be difficult to choose the right product for your needs without trial and error. However, to minimize the error part, we’ve compiled a shortlist of tips for first-time consumers. If you follow them, you’ll be able to differentiate between high-quality and poor-quality products.

What You Need to Know About Buying CBD Oil in Texas:

  • Organic is the way to go. Hemp plants are bioaccumulators, meaning they absorb every substance from the environment they grow in, including the good and bad ones. The best material for CBD extraction comes from organic, non-GMO plants.
  • Choose CO2-extracted CBD. CO2 extraction is by far the best method to produce CBD oils. It doesn’t require additional heat or solvents, yielding pure and potent extracts. The equipment required to run CO2 extraction is also expensive, so it’s a sign that the company is committed to quality.
  • Full-spectrum CBD is superior to isolate-based products. Full-spectrum means that the product was made using the entire plant. This process captures more valuable compounds, such as minor cannabinoids, terpenes, and flavonoids. These compounds help your body process CBD more efficiently due to the synergy they produce. This phenomenon is known as the “entourage effect.”
  • Only purchase from companies that have their products tested by a certified lab. Third-party laboratories can tell you whether or not the CBD content of the product matches the advertised amount on the bottle. They can also detect common contaminants and unwanted additives, such as pesticides, heavy metals, or solvents. If a company doesn’t make the lab reports available on its website or upon request, it’s an instant red flag.
  • Watch out for companies claiming CBD is a miracle drug. CBD is a highly versatile supplement that can improve your daily life in a natural and safe way. However, it’s not going to mend broken bones or cure cancer. Companies making such claims are companies to avoid.

At Royal CBD, we source our hemp from organic farms in Colorado. These CBD-rich strains are then extracted in our facility using pressurized CO2, which ensures consistent potency and the highest purity of our products. We cover every traditional CBD format, including full-spectrum CBD oil and softgels, THC-free gummies, and broad-spectrum topicals. The entire Royal CBD line is extensively tested in a certified laboratory for its CBD content and purity levels.

Looking for a risk-free way to try out our products? We offer a 30-day money-back guarantee program!

Key Takeaways on Buying CBD Oil in Texas

All in all, CBD laws are complicated in Texas. Although the state prohibits marijuana in almost every form — except for a very limited medical marijuana program — hemp-derived CBD is legal and you can easily find them over the counter. However, if you want to avoid trouble with the law, you need to prove that your oil contains the federally accepted amount of THC (0.3% or less).

Whether you decide to shop for CBD online or locally, remember to always do your research on any company before spending your hard-earned money. No two CBD oils are made the same, and there’s a large degree of difference when it comes to their quality.