The revitalization of the hemp industry provides unique and exciting opportunities for farmers. But it also provides some very big potential pitfalls of which farmers must be aware. Our goal is to help you navigate through these potential pitfalls.
- Hemp Licensing and Registration – On April 16th, 2020, the USDA approved Florida’s hemp program. As a result, the Florida Department of Agriculture and Consumer Services began the licensing process for hemp cultivators. A hemp cultivator can grow hemp to sell as seed, fiber, oil, or nursery plants. A hemp cultivator must tailor its operating strategy and procedures to create the best hemp material for the desired end product. There are several steps you could be taking now to ensure that you are ready when it comes time to submit an application. We will assist with drafting the application to help your farm obtain a license to grow hemp.
- Land Acquisition – Under the recently-passed hemp bill, an applicant seeking to be licensed to grow hemp must identify the land to be used for growing hemp. So, if you do not currently have the land, then you will need to find the right property. We will assist with the entire land acquisition process from identifying the proper property to negotiating and closing on the sale of the land.
- Company Formation – There are a lot of variables to consider when forming your company. We will assist with ownership type, ownership structure, and preparing formation documents.
- Environmental Containment & Transportation Plan – Each hemp cultivation application requires an applicant to submit an Environmental Containment and Transportation Plan. The purpose of the Environmental Containment Plan is to provide notice to the FDACS about how each “lot” of hemp in cultivation the hemp will be divided and separated from other cultivation lots. A lot is defined as an area in a field, greenhouse, or indoor growing structure used for cultivation of the same variety or strain of hemp. Therefore, a cultivator must have a lot for each different strain that it grows. To illustrate, if you plan to grow 2 strains of hemp, you must divide your cultivation area into at least 2 lots. It is recommended to divide cultivated areas into various lots to ensure that each lot can be individually controlled and adjustments to operations can be made without destroying the entire harvest. Furthermore, it is essential that each applicant complies with the Environmental Containment Plan it submits. Each lot requires its own plan. Whenever the FDACS conducts an on-site inspection, it will hold each cultivator to the standards established in the cultivator’s Environmental Containment Plan for each lot. Therefore, each lot must be planned carefully to reflect the actual containment system for the lot. In addition, the required Transportation Plan puts the FDAC on notice about the cultivator will transport hemp plant material. We will assist you to draft an Environmental Containment and Transportation plan that exceeds Florida’s standards and will guide cultivation operations.
- Sourcing Seeds – Under the recently-passed hemp bill, a licensed Florida hemp grower must use seeds certified by one of the following: a certified agency as defined in s. 578.011(8); a university conducting an industrial hemp pilot project; or a member of the Association of Official Seed Certifying Agencies. You will also need to ensure you have quality seeds at competitive pricing; and ensure you are complying with the testing and reporting requirements that will be required by FDACS. There are very specific rules promulgated by FDACS so sourcing the right seeds and complying with the seed requirements will be an important part of your operations. We will assist you through the entire sourcing process from identifying the right seeds to suit your needs to negotiating the supply contracts.
- Acquisition of Equipment – Growing hemp is not as easy as some of the crops you may be used to growing, especially if you are growing for CBD. Depending on your operations, you may need to acquire equipment to assist with the growing process. If you are planning to also process your hemp, then you may want to consider using a small-scale mobile machine as a decorticator. We will assist with identifying the equipment that suits your needs.
- Finding your Market – One of the biggest risks for farmers is growing your crop and having nowhere to sell it. It is imperative that you do not scale your business faster than the demand for your crop. Assuming you do not process the hemp on your own, we will assist you with identifying a processor to purchase your hemp. We will also assist with the negotiations of any supply contracts with processors/customers.
- Reporting/Testing Compliance – In order for hemp to be legal, it must contain no more than 0.3% THC. This creates various requirements with reporting/testing compliance. We will assist you in ensuring that your operations comply with all reporting and testing requirements. We will also help you contract with a third-party testing lab that meets all the requirements in the recently-passed hemp bill and any other rules or regulations that are passed.
- Bookkeeping and Accounting – Like any business, bookkeeping and accounting are key to understanding your business as well as complying with legal requirements. We will assist you in implementing proper accounting systems to properly capture the necessary data.
- Employment Matters – Like any business, there are various employment matters that must be properly dealt with. We assist with various employment matters including offer letters, equity compensation, separation agreements, employee handbooks, and litigating employment disputes.
- Commercial Litigation – Most businesses have to deal with some amount of litigation. But, litigating a case in the hemp industry has its own set of complications and challenges. We are experienced and aggressive litigators.
- CBD – Growing hemp for CBD comes with its own opportunities, challenges, and legal hurdles. Please see Hemp-derived CBD Business page for more information.