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SD Hemp Regs Box Out Small Growers, But Winfred Ready to Boom on CBD

The Legislature’s Rules Review Committee yesterday voted 5–1 to approve South Dakota’s new rules for industrial hemp, including lots of fees for growers and processors:

According to the rules approved Monday, every hemp grower licensed by the state must pay a grower inspection fee of $250 and every lot shall not be inspected more than 15 days before the hemp is harvested. Once it has been inspected and tested, it can then be harvested. Growers must contact the Department of Public Safety at least 30 days prior to harvest to schedule an inspection. Industrial hemp in the program must not exceed a THC concentration of more than 0.3%, and noncompliant hemp must be disposed of.

…Every hemp processor would be subjected to an inspection fee of $500 per location and each location would be inspected annually. Hemp transporters would need to pay $25 as a fee and obtain a permit to transport hemp in South Dakota, which would also apply to out-of-state haulers.

…Applications to grow industrial hemp must be for at least five acres.

Licenses will be issued over a 60-day period, from Nov. 1 to Dec. 30 each year. Once the new rules are in place, there will likely be a 60-day application period opening, as well. Growers licenses, which would be good for 15 months, will require a $50 application fee and, if approved, a $500 grower license fee [Marcus Traxler, “SD Industrial Hemp Rules Get Final Approval from Legislators,” Mitchell Daily Republic, 2020.12.07].

Fees and inspections in general are reasonable government actions to keep the market honest, but do farmers have to pay $550 to get permission to grow any other crop in this state, then pay another $250 for the privilege of having their land intruded upon by agents of the state? I know we’re worried about dope fiends raising wacky weed out in the middle of those hemp fields, but hey: pushers hide their marijuana grows in corn fields, so why not impose license and inspection fees on corn growers, too?

The state also lets its Earl Butz bias stain these industrial hemp rules, prohibiting small farmers from planting less than five acres of hemp. Colorado’s hemp growers targeting the CBD market saw yields of $50,000 per acre in 2019. Profits vary widely based on farming practices and weather, locusts, Trump, and other disasters. But why not let farmers decide just how much or how little hemp they want to plant, whether to provide the bulk of their income, supplement their revenue, or just experiment? We believe in freedom to farm, large or small, right?

Undeterred by these regulations is my friend, conservative Republican, and South Dakota Industrial Hemp Association president Ken Meyer, who is ready to expand his family business from honey to hemp:

Ken Meyer is association president and vice president of A.H. Meyer and Sons Inc., a beeswax and honey company at Winfred. “Our goal there with hemp is to use the large-scale super-critical CO2 facility that we have to process hemp flowers for CBD oil,” he said.

Katie Sieverding is executive director for the association. “While some of us, I think it is pretty easy to say, that we would have got started, we would have pressed the ‘go’ button back in March before the ink was dry on HB 1008, I think the (state) Department of Agriculture worked hard to get many of the potential wrinkles that the program could have faced ironed out on the front end,” she said.

Sieverding added, “One thing that’s been fascinating for me throughout these last couple of months is learning about all the different products that are out there. Today, I am wearing a pair of hemp socks, actually — very comfortable” [Bob Mercer, “S.D. Industrial-Hemp Rules Get Green Light,” KELO-TV, 2020.12.07].

Pretty soon everybody in Winfred may be enjoying the comfort of hemp socks grown right in their neighborhood and soothing what ails them with CBD oil processed right up the street. Maybe Ken will need to get our friend Russ Olson to expand the Highway 34 Four the Future! plan to lay four lanes west of Madison (and another four lanes south on 81 to Salem?) to give all those hemp growers and haulers easier access to the booming Winfred hemp-o-plex. But it’s disappointing that we’re rigging the regulations to fence out farmers who might want to smart small with hemp.

Related Fiscal Guesses: The Department of Agriculture and Department of Public Safety estimate they’ll see 65 growers apply for licenses and inspections during the 60-day application period, November and December, each year, plus fees from four processors and 400 haulers, producing $78,450 for Ag and $11,625 for DPS.

5 Comments

  1. mike from iowa 2020-12-08

    One sure fire, tried and true magat regulation that would kill all hemp growers is to demand the stuff is grown within 30 mile range of ambulatory/surgical centers for vegetation in case something catastrophic happens to hemp during harvest.

    Another thingie, isn’t it a lark how “we hate regulation” magats love to regulate everything they disagree with, constitutionally guaranteed or not?

  2. bearcreekbat 2020-12-08

    mfi has a point.

    Now that legal recreational pot has been enshrined in the South Dakota Constitution, i.e.,” constitutionally guaranteed,” isn’t the Noemist paranoia about “dope fiends raising wacky weed out in the middle of those hemp fields” pretty much moot?

  3. Mark Anderson 2020-12-08

    Ah yes, reminds me of our old place in Vermillion. When I was in grad school, we rented the downstairs of an apartment building. Upstairs the students kept throwing out the seeds from their window, so one day in the early morning I had to cut down all the growth in front of our window which was behind a big bush facing the street. The police station was two blocks away. Getting rid of it was tricky too, I had to put it in the car trunk and throw it out in the country after keeping it in the bathtub for a day.

  4. MJ 2021-02-17

    I am confused about growing on less than 5 acres. Is the law saying we can not grow if we are small farmers with less than 5 acres?

  5. Cory Allen Heidelberger Post author | 2021-02-18

    That appears to be what the rules are saying: at least five acres.

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