$LXRP Unfavorable Laws Force Hemp Businesses Out of Florida

January 6, 2020

Hemp is an extremely versatile crop, said to have thousands of uses. The plant’s uses range from industrial applications like making bioplastic and construction materials, to nutritional uses. Not to mention the plethora of cannabinoids it produces, such as cannabidiol (CBD) and cannabigerol (CBG), which have their own wide-ranging applications.

The 2018 Farm Bill released hemp from decades of illegality, classifying cannabis with less than 0.3% THC as industrial hemp. The legislation gave farmers the green light to grow the crop under state and tribal programs, as long as they adhered to the federal regulations.

Floridian Bryan Coco saw this as a chance to invest majorly in the crop, having started his hemp company called HGE, the year before. The market for hemp was bound to grow quickly, and he was determined to be right in the middle of all of it. The state’s nearly year-round sunshine and vast stretches of farmland made it an ideal location for hemp cultivation, and Coco was planning on relocating his company headquarters there.

Things, however, didn’t go as planned. Despite the state having the ideal conditions for farming hemp, the legislative process was almost impossible. At the time, the state had issued only one permit to the University of Florida and all other permits were delayed till early 2020. This eventually pushed Coco to Pennsylvania, which already had a hemp pilot program underway.

HGE is now thriving, he says, with a 120-acre farm and a 4,500 square foot indoor growing facility. “Pennsylvania has been diversifying its pilot program for years, which has put us in a better position to supply farmers with the compliant seed they now need,” he adds.

According to the Farm Bill, states were to establish their own hemp programs and submit them to the USDA for approval. They were allowed to launch the programs before the USDA gave its approval, but Florida’s pilot program is available only to universities. This is due to a bill signed by Governor Rick Scott in 2017.

Critics say that the move is stifling new business growth and will ultimately lead to a less healthy marketplace. Plenty of hemp businesses have been forced to ditch the state for regions with more progressive hemp regulations.

“The industry is footloose and moves to whatever state offers the most business-friendly environment. Onerous regulations can present significant costs, it’s not just taxes that can drive businesses elsewhere,” says Jonathan P. Caulkins, a drug policy expert, and professor at Carnegie Mellon University.

Industry watchers believe that the hemp industry, including VPR Brands LP (OTCQB: VPRB) and Lexaria Bioscience Corp. (CSE: LXX) (OTCQX: LXRP), could be very disappointed that the Sunshine State still has impediments preventing hemp producers from taking advantage of the ideal conditions to grow hemp.

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