(First published in the November 15, 2018 issue of City Pages)
Wisconsin once grew more hemp than all other states combined. Local farmers like Jamie Degenhardt are trying to reclaim that status.
Jamie Degenhardt, in his hemp field, located about 15 miles west of Marshfield, this summer. The plants can reach 8-9 feet, and industrial hemp strains used for fiber can grow up to 20 feet.
When Jamie Degenhardt started researching hemp growing in early 2018, the regulations around the newly legalized crop weren’t even written. Just back from a hemp expo in Milwaukee that drew 1,500 attendees, he and his father were looking for a new business they could do together.
The state was poised to start a pilot project around hemp, allowing the crop to be grown in Wisconsin for the first time in decades (it was prohibited because of its relationship to marijuana). Degenhardt was intrigued by the prospect of being one of the first to get into a new field; or rather, an old field made legal again. His experience with his dad at the expo sealed the deal for him, if he wasn’t already convinced by the high potential profit margin and medical benefit many tout. “One lady had actual raw flower,” Degenhardt says. “It looked and smelled amazing.”
Degenhardt turned out to be more than just one of the pioneers. He’s now credited with being the first person in Wisconsin to harvest a hemp crop under the state’s new pilot program. Degenhardt planted his first seeds April 28, in a greenhouse at his farm located in Greenwood, about 15 miles west of Marshfield, and put the starter plants in the ground May 22. Eventually Degenhardt ended up with 3,000 plants on about an acre and a half. Thanks to his former occupation as a welder, he was able to construct a lot of the lab equipment he now uses to extract CBD oil from his harvest.
The financial potential for hemp is enormous. The raw flower alone can yield about $65 per pound; fully extracting every potential bit of the hemp plant can bring the yield to $500 per pound or higher.
Degenhardt and other growers say the plants grow fast and large. The variety they use reach as tall as nine feet; industrial hemp used mainly for its fibers can reach 20 feet tall.
Grower Misty Poehnelt of Medford says her first yield this year, on about an acre of land, brought in far more than they expected. Poehnelt and her husband Derek expected to grow only enough for their own use of its oil. They harvested enough to sell some excess oil as well.
And that’s where Degenhardt comes in too. Not only is he a grower, he also runs an extraction business, Uno Xtracts Cannabis Processing, which the Poehnelts use to create their CBD oil. Degenhardt also owns a retail store in nearby Neillsville where he sells both his own products and those of others, such as Sarah Kelley, whose business, Sarah’s Garden, creates hemp-based creams, lotions, lip balms and even cheese puff snacks among the variety of products.
There’s certainly money to be made in this line of farming, but when talking with growers, product makers and sellers of hemp-based products, it’s clear that those involved care deeply. They want to spread the word about the wonders of hemp—a fast-growing plant whose fiber has many industrial uses and oil is used for a multitude of health benefits.
Their passion runs deep enough that some of them have put their personal finances on the line. “I maxed out my credit cards buying the equipment for this,” Degenhardt says. “It’s gotta work.”
Roughly nine customers per day stop in at his store, and the average customer drops a good amount on their products. So far, so good.
You there, with the hemp!
Jamie Degenhardt with some of his hemp-based products at his store in Neillsville
When Degenhardt opened his shop, Cannabis Cultivators of Clark County, in Neillsville this year, one of the first things he did was walk to the police station, product in hand. The local police department is right next door to Degenhardt’s shop, and he wanted to make sure there was no confusion.
One glance at the product and it’s easy to see why. The hemp bud in raw form looks and smells just like marijuana. The difference is that hemp doesn’t contain THC, the compound in marijuana that produces a high —or at least not enough to be psychoactive.
That “drug” aspect is still a common question that Milwaukee’s expo vendors heard a lot, says Jim Naumann, who ran the expo and is organizing the Central Wisconsin Hemp Conference this weekend in Marshfield. The answer is no. Hemp typically has 0.3% THC levels, versus 5% or more for marijuana. Hemp instead contains higher levels of CBD, the compound attributed to health benefits and which negates any effects the minimal amount of THC might have.
That hasn’t stopped hemp from being confused and conflated with marijuana, and led to a ban on growing it across the U.S. in the 1970s during President Richard Nixon’s War on Drugs initiative. The ban hit Wisconsin hard. The state in 1920 was the largest producer of hemp in the U.S., with more acres dedicated to the plant than all other states combined.
Things began to turn around when the state finally allowed the use of CBD oil in 2016, but the legislation was confusing, hemp advocates say. It seemed to allow the possession of CBD oil but not the sale, leaving everyone wondering if they could actually have it or not. Local police in Wausau told City Pages at the time they wouldn’t actively go searching for users of CBD oil, especially given the still prevalent meth and heroin epidemics.
All that was clarified in November 2017 when Gov. Scott Walker signed Act 100 into law that initiated a pilot program for restarting agricultural hemp in Wisconsin. The law says a person can “plant, grow, cultivate, harvest, sample, test, process, transport, transfer, take possession of, sell, import, and export industrial hemp in this state.”
That’s crystal clear, especially in contrast to the previous bill.
The state Department of Agriculture, Trade and Consumer Protection now has licensed 242 growers and 99 processors. That includes three growers in Marathon County, and three licensed growers and three licensed processors in Portage County (and none so far in Lincoln).
Licensed growers must record and report data to the department, and 30 days before harvest the state tests the crop for THC to ensure levels are below the 0.3% threshold when dried, as specified in the law (in final concentrated form it can have up to 1% THC).
Applicants include people of many ages, and plenty looking to grow them in greenhouses, signaling that hemp could be an urban crop as well as a rural one.
Hemp growing licenses are classified into three levels, each one costing more: 0-30 acres ($150), 31-199 acres ($5 per acre) and 200 acres or more ($1,000). Background checks are performed. There is also a $350 one-time fee. Anyone wanting to process hemp must apply for a separate license.
Once someone is accepted into the program, the grower must allow DATCP officials access to hemp fields to inspect and sample, and growers must submit planting and final reports. THC levels are tested prior to harvest to ensure someone isn’t growing marijuana under the guise of hemp. The main species that’s considered “industrial” hemp is Cannabis Sativa L.
Misty Poehnelt became a regular user of CBD oil as part of her pain management plan to address a chronic condition. Poehnelt has Ehlers-Danlos Syndrome, an inherited disorder that affects the connective tissue. The CBD oil isn’t a panacea by any means — it’s only one part of her pain management strategy — but it helps a lot, she says.
So Poehnelt enthusiastically applied to be one of the state’s first hemp growers. She’d never farmed an acre in her life, but was determined to learn. After attending a growers’ workshop, she bought her seeds and wanted to see what would happen. She figured she would at least be able to grow enough for her own use.
She ended up with more than that. Hemp grows tall and fast, shooting up an inch or two per day. She planted in May and by August had a huge crop on her one-acre plot. She is now working with Degenhardt to process her plants into oil, which she then plans to sell as well as keep for her own use too.
According to a 2017 report from the World Health Organization, “CBD has been demonstrated as an effective treatment of epilepsy in several clinical trials.” It also says there is preliminary evidence of CBD being effective in treatment for other medical conditions, that CBD has a “good safety profile” and that there is no evidence of recreational use or any other public health problems.
But health blogs abound extolling the benefits of CBD, including pain relief, easing anxiety, alleviating cancer symptoms, reducing acne and helping heart health. Others say taking CBD oil has helped them sleep better, and given them more energy and focus during the day.
Excitement, trepidation, and banking obstacles
Misty Poehnelt is one of several central Wisconsin growers to participate in the state’s hemp pilot program launched this year. She and her husband (and two small children) grew their crop in a garden at their home in Medford.
This spring when Jim Naumann co-hosted a hemp conference in Milwaukee, he didn’t know what to expect. There were 25 speakers slated to educate at the event, and roughly that many exhibitors. Naumann would have been happy with 500 attendees. Instead, they ended up getting 1,500 attendees, and vendors nearly sold out of everything. If one were to put the left over product for sale all together, he says, it would have easily fit in one 18-gallon tote.
Naumann knew there needed to be another expo, and this time they wanted to reach the central Wisconsin area, to promote growers and producers here. As word got out, vendors and exhibitors kept piling in, and they outgrew their first planned location at the fairgrounds in Marshfield.
The event this Saturday, Nov. 17, now will be held at the Marshfield Mall Expo Center. How many people does Naumann expect? “Well, I have 3,000 wristbands,” he says.
It was the Republican-controlled state legislature that not only passed the CBD oil legislation but also created the pilot program and legislation making it completely legal. Recent election results show a similar embracing of medical marijuana, with referendums passing in every county they ran in, mostly with overwhelming majorities even in counties that vote heavily Republican. Hemp and marijuana both are starting to politically become what they have been in society for a while — something with support from people of all political persuasions.
The banking industry, on the other hand, hasn’t been so quick to jump on board.
Both Poehnelt and Degenhardt had trouble securing loans. Even Naumann, the founder of the convention, has had issues with banks.
“We tried to get a checking account,” Degenhardt says. “I had it for two days and then they canceled.” Another bank said OK, only to cancel the account right away too. Even his dad’s personal account was canceled, Degenhardt says.
Lyssa Blakeside and Anna Zachow, who run a hemp based health business in Wisconsin Rapids, say they’ve had to rely on international banks because of the local perceptions of hemp. And that creates its own problems, as credit card transactions are often flagged as fraud because they originated from Canada or Mexico.
Naumann says he had difficulties with banks until he started using his LLC name, which doesn’t say anything about hemp. “In the beginning they were concerned because the website and Facebook pages said ‘cannabis’” Naumann says.
Marijuana growers and sellers in Colorado and other states that have legalized it face the same issues, using cash because banks take their cues from federal, not state laws. The U.S. Farm bill that would make hemp legal at the federal level is still stalled in Congress (the hang up is related to changes to the SNAP Food Program, not hemp), so banking might be a problem for a while. But some banks in Colorado have decided to do business with the marijuana industry anyway, and others have made concessions for longtime customers.