Hartford Business Journal

16 Hartford Business Journal • June 22, 2015 www.HartfordBusiness.com bill allows for research-scale hemp cultivation, which is about as far as the state can go without running afoul of federal law, which still effec- tively outlaws commercial hemp production. Hemp is a fibrous variety of cannabis that contains virtually none of the psychoactive ingredients present in plants that yield mari- juana. The plant's close connection to the drug, however, was one factor that led to its produc- tion decline in the U.S. after World War II, though American companies continue to import mil- lions of dollars' worth of hemp products each year from China, Canada and other countries. Last year, however, Congress included language in the federal farm bill allowing for research-scale hemp cultivation, and instruct- ed drug enforcement officials not to interfere with states that want to test the waters. Since then, at least nine other states have changed their laws to specify that hemp is no longer considered a controlled substance, providing some legal protections for growers, even though federal law still largely consid- ers hemp to be an illegal drug. Several states, including Kentucky, Colorado and Vermont, have already planted pilot crops to study hemp cultivation and marketing. Connecticut now joins a growing move- ment spurred by advocates and lawmakers who see hemp production as a potential U.S. economic engine. But the industry's revival, both here and abroad, will be far from easy because slowly shifting federal law isn't the only barrier to hemp's comeback. There are economic con- cerns as well. Several Connecticut agencies have questioned whether hemp cultivation could be profitable for Connecticut farmers. But nonetheless, progress is progress, advocates say. "Obviously we want the process to be faster than it is, but I'm just happy we can put our foot in the door," said state Rep. Melissa Ziobron, R-East Haddam, who championed Connecticut's bill. CT hemp advocate gets a jump start Hemp has thousands of end uses, from clothing to beauty products to food. Ziobron said she hopes production of the plant will eventually create economic opportunity for Connecticut farmers and manufacturers and replace reliance on imported hemp. Tatianna Gildersleeve, a former fashion stylist and editor who owns a fledgling tex- tile business in Greenwich called Tredway White, hopes that Connecticut-grown hemp could eventually become part of a line of sus- tainable products for her company. "We can import hemp from basically any country in the world, but we can't grow it here," Gildersleeve said. "This is a start to change that." The change in federal law last year allows state agriculture departments and universi- ties to study hemp cultivation and marketing. Ziobron has suggested that UConn's College of Agriculture and Natural Resources could play that role in Connecticut. The school did not make an official avail- able for comment before deadline. While Connecticut's hemp bill awaits the governor's signature, Gildersleeve is already involved in cultivation. Her company has partnered with a Kentucky farm that just planted its second research hemp crop — part of 1,500 acres that farmers in the Blue- grass State are expected to harvest this year. She hopes to process some of that result- ing crop into fiber to use in her products, though she admits she is uncertain about the legality of transporting the hemp to another state and using it for commercial purposes. Kentucky, once the nation's largest hemp producer, underscores the tension between federal enforcement and state hemp efforts. The U.S. Drug Enforcement Agency seized imported hemp seeds there last year and then released the seeds after the state sued and successfully applied for a DEA permit. In Connecticut, the departments of Eco- nomic and Community Development, Con- sumer Protection and Agriculture released a report in December recommending that lawmakers adopt the same definition for hemp as the 2014 farm bill, to minimize the risk of federal enforcement action. The state legislature did just that, defining hemp as the cannabis variant with virtually none of the active ingredients found in marijuana. Hemp Hurdles If Congress greenlighted commercial hemp production today, there would still be plenty of challenges to forming an industry around it in Connecticut. The state report released in December predicted a "modest new economic opportu- nity" for farmers if commercial hemp produc- tion is permitted. The profitability of U.S. hemp is a tough thing to predict, according to a study by the University of Madison-Wisconsin, which said many estimates overlook how labor intensive hemp processing is, the impact of foreign competition, and potential regulatory costs. Henry Talmage, executive director of the Connecticut Farm Bureau Association, which represents approximately half of the state's farmers, said he is happy about the hemp bill, but his optimism is tempered. "In general, we're always excited about new marketing and production opportunities for Connecticut growers," Talmage said. "The bigger question is: Is this something that can be done profitably in Connecticut?" Farmers would need processing plants available to handle their hemp crops and be assured there was a market for the product. Plus, there would be price competition from bigger farming states and foreign producers. "Most people envision this as much more of a boutique type of opportunity, at least initially," Talmage said. "I don't see hemp replacing huge segments of our agricultural infrastructure." But Talmage said hemp could be part of the business mix for some farmers who have diver- sified over the years into niche crops, including some recent interest in hops for brewing beer. Gildersleeve, who spoke to the Hartford Business Journal by phone from Kentucky, said she's ready to give hemp production a shot. "I'd love to grow closer to home," she said. "It's a really good opportunity for Connecti- cut farmers to, even on a small scale, create an economy around hemp." n Brad Kane contributed to this story. from page 1 CT to restart hemp cultivation A handful of hemp seeds, which can be pressed into oils used in foods, lotions and other products. P H O T O | C O N T R I B U T E D CT diesel tax to drop 4.2 cents By Brad Kane bkane@HartfordBusiness.com T he tax Connecticut charges on diesel fuel will drop to 50.3 cents from 54.5 cents per gallon on July 1, according to the state Department of Revenue Services. "This is great news for truckers who use millions of gallons of diesel every year," said Mike Riley, president of Motor Transport Association of Connecticut. Despite the 4.2 cent decrease, however, Connecticut's diesel tax remains the sec- ond highest in the nation, according to the American Petroleum Institute. Only Pennsyl- vania's diesel fuel tax is higher at 65.3 cents per gallon. The next closest to Connecticut is New York at 45.45 cents per gallon. The tax is recalculated every year based on the average wholesale price of diesel and the petroleum gross earnings rate. The new diesel tax rate will remain in effect for 12 months and then be recalculated again. "Labor and fuel are truckers' biggest expens- es. The drop in the rate of this tax is a big deal," Riley said. "The reduction of costs from dropping this tax will go right to a very thin bottom line in thousands of Connecticut businesses." n Connecticut truckers pay the second highest diesel taxes in the nation, but the price will drop by 4.2 cents per gallon July 1. P H O T O | H B J F I L E

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