Secretary of Agriculture (and Natural resources) Hunter Roberts spoke to the Sioux Falls Rotary Monday and talked down one agricultural product, cannabis:
Rotarian Cindy Peterson also asked Roberts where he saw the future of cannabis and industrial hemp in South Dakota, a discussion that led him make a distinction between the products.
He said DANR is trying to shy away from involvement in THC-related products, and directed those inquiries to the state Department of Revenue. That department regulates adult-use marijuana programs in South Dakota.
THC, or tetrahydrocannabinol, is the prime psychoactive compound in marijuana.
Roberts was more positive about hemp. The secretary said there is “opportunity to grow” in the industrial hemp market, mainly where multi-use applications are concerned, like construction materials and feeding filters.
According to latest U.S. Department of Agriculture statistics, 1,850 acres of hemp have been planted in South Dakota so far. Roberts hopes the industry reaches 2,400 acres by the end of the year.
He also claimed the CBD oil market has “tanked” [Dominik Dausch, “DANR Merger Has Come with Challenges, Secretary Hunter Roberts Says,” Farm Forum, 2022.04.29].
DA(NR)’s stated vision includes a “diverse agricultural economy.” Why would the Secretary of Agriculture (and that other stuff) first say his department doesn’t want to promote diversifying agriculture by growing cannabis to make popular and profitable medicinal products, then sandbag his already timid aspiration to add increase hemp planting from three whole sections to four by claiming CBD (cannabidiol) oil isn’t making money?
Roberts’s claim that CBD has “tanked” is so obviously false that the Farm Forum can’t avoid correcting him:
According to Hemp Benchmarks, most major CBD companies reported average or slightly less-than-average net revenue in 2021 compared to 2020.
The pandemic and supply chain issues have shuttered stores nationwide, limiting market growth, but the industry is still expected to expand during the next decade [Dausch, 2022.04.29].
Dausch’s first source, Hemp Benchmarks, notes that the market disappointment with CBD oil comes not from actual declines but from a failure to grow as fast as investors hoped:
While the coronavirus has continued to impact the U.S. – and the world – this year, available information indicates that CBD product sales have not bounced back in the same way as many other areas of consumer spending. A recent U.S. CBD Market Industry Update published by the Brightfield Group, a CBD and cannabis market research firm, estimates that retail sales of CBD products will reach $4.7 billion in 2021, up just 2.5% from $4.6 billion in 2020 [Hemp Benchmarks, “Analysis of Recent trends in Sales of Hemp-Derived THC & CBD,” 2021.12.01].
Dausch’s second source, Grand Review Research, said in February 2021 that the CBD market shrank 6.1% from 2019 to 2020 but was likely to see annual growth of 20% to 23% each year over the next five years. Vantage Market Research projects 21.3% annual growth through 2028. Research and Markets projects the market for CBD gummies will grow 28.3% annually through 2028. The CBD market is growing in Europe. A lot of companies are getting weeded out after a rush of dabblers entered the market, but only because startups hoping to cash in flooded the retail space, not because demand has fizzled.
SDCL 1-41-3.2 makes the Department of Agriculture (and Natural Resources) “responsible for researching and developing factual information on issues affecting the State of South Dakota and its agricultural industry….” Secretary Roberts, you should probably do your statutory job and your research and provide factual statements about the market opportunities for South Dakota farmers.
