By Blake Jackson
Despite the legalization of commercial hemp farming in the United States six years ago, the industry continues to grapple with significant challenges, particularly in securing funding for processing facilities. Investors remain cautious due to the industry's relative newness and lack of a proven track record.
“It is hard to build these businesses and getting them right and putting some wins on the scoreboard is going to be important for investors to come in,” said Mina Mishrikey, the head of investments at Merida Capital Holdings, a private equity firm that specializes in cannabis ventures.
Mishrikey highlighted the potential benefits of environmental, social, and governance (ESG) investing for the hemp industry.
While facing some conservative backlash, he believes this strategy will gain wider acceptance in the long term.
Regulatory clarity remains a crucial issue for the hemp industry. The National Hemp Association and its partners advocate for separate regulations for industrial hemp and health-focused cannabinoids in the upcoming Farm Bill.
Government investment, such as the CHIPS and Science Act, can also support the hemp industry's growth.
This law aims to strengthen domestic supply chains, and the Rural Business-Cooperative Service (RBCS) offers various programs to assist hemp businesses.
The RBCS provides Value-Added Producer Grants to help farmers transform raw commodities into higher-value products.
Pocono Organics LLC, a hemp and microgreen producer, received a $250,000 grant to support its processing and marketing efforts.
The BioPreferred label, a voluntary indicator for biobased products, can help hemp products stand out in the marketplace and government procurement.
The government has mandatory biobased purchasing requirements for certain products, providing an opportunity for hemp businesses.
Rural Business Development Grants offered by the RBCS can also support workforce development within the hemp industry.
Additionally, the Rural Energy for America program provides funding for renewable energy projects, including those related to hemp production.
The Lancaster County Hemp Circuit, a series of events showcasing hemp industry developments, attracted attendees from across the United States and internationally.
The event included stops at research farms, museums, and processing facilities, providing valuable insights into the industry's progress.
As the hemp industry continues to evolve, overcoming funding challenges and achieving regulatory clarity will be essential for its long-term success.
With government support, innovative business models, and a focus on sustainability, the hemp industry has the potential to make a significant contribution to the economy and environment.
Photo Credit: gettyimages-fatcamera
Categories: Pennsylvania, Government & Policy