A Pacific Northwest State of Mind

Hemp priorities in Washington State

When you tell Seattle residents you moved to Seattle from Austin, you generally get two very different follow-up questions, depending on the person: One is, “What tech company do you work for that brought you here?” (It’s a tech hub very much like Austin, with Amazon having the largest presence in the city.) The other is, “Did you move here for the legal weed?”

The latter is the most ubiquitous response, I’ll be honest, because Washington was among the first states (with Colorado) to legalize cannabis for recreational use. This was in 2012, 14 years after the state first legalized medical marijuana. And the strange thing is, after having lived here a year, going to a dispensary is no more exciting than buying a bottle of wine at the grocery store. I’ve heard some people stopping by “the weed store: while running errands after work or before their weekend grocery run.

And while legal cannabis is an everyday part of life here, one might be shocked to learn that it took the state much longer to come around to hemp. The state had no problem breaking federal laws when it legalized cannabis eight years ago; and it turned out very lucrative: In 2018 alone, the state’s total retail sales of cannabis hit $1 billion, when the state collected $362 million in cannabis excise tax in the 2018 fiscal year; then in 2019, total retail sales hit $1.1 billion, with $387.6 million in excise tax. Washington’s cannabis market was projected to hit $2.1 billion in 2020.

But yet the state waited until the 2014 farm bill to pass legislation to allow for the planting of some 180 acres of hemp in 2017, and this was all under the umbrella of the Industrial Hemp Research Pilot program, which allowed for only the licensed “research”of hemp in the state.

Finally, earlier this year, almost two full years since the 2018 farm bill was passed, which legalized the cultivation and selling of hemp at the federal level, Washington state repealed and replaced its pilot program with one that allowed for people in the state to become fully licensed to grow hemp.

Of course this approach to regulating the state’s hemp industry likely stems from the nature of the national hemp industry, the market for which is not limited to a single state and up to state laws like cannabis. In other words, a hemp producer in Washington doesn’t have to rely on consumers solely within the state; now that hemp is legal federally, and no longer a Schedule I drug, the producer can ship its product all over the country regardless of where it’s grown.

However, if the Washington state hemp growers want a piece of the hemp-derived CBD consumer products market in the U.S., which is predicted to be worth anywhere from $6 billion to $7 billion in the year 2025, then Washington state will have to catch up to the other states that are taking a bigger market share, ones like Kentucky, Montana, Colorado and North Carolina that are producing and selling much more hemp. They’ve been doing it longer and have better infrastructure and more efficient supply chains to successfully grow, market and sell this cash crop.

The state should make hemp a major priority much like it has cannabis, that is if its growers want to exploit the huge demand we’ve seen this year for smokable hemp, which Nielsen researchers say will likely total $70 to $80 million in 2020 and could likely grow five times that number by 2025.