On February 18th, the Washington State House of Representatives passed SHB1888, the Industrial Hemp Bill, 97-0, a move largely unexpected by many groups closely monitoring the hemp issue in Olympia. The bill will now be sent to the Senate, and with passage in that house, on to Governor Jay Inslee, who has stated on record he wants to be the most “green” governor in our nation’s history. Many legislators felt this issue had negative emotional ties to Initiative 502, the “marijuana reform” initiative, approved by voters in Washington during the 2012 election cycle. Most in pulp and paper, construction and textile industry analysts consider industrial hemp a completely separate issue. Nine states have existing industrial hemp laws that at minimum allow institutional research of hemp related products.
Even though it is the same plant family, hemp differs from the federally restricted cannabis sativa plant in that it contains low levels of the psychoactive ingredient Tetrahyrdocannibinol (THC). The bill limits THC content in industrial hemp to 1.0%. Hemp has hundreds of industrial products that can be created from hemp fibers and seeds. Hemp textiles, most commonly found in retail shops in Washington, are more durable than cotton and resistant to mildew. One acre of hemp produces 2 ½ times as much useable fibers as cotton. Industry estimates indicate hemp textile imports to Washington, primarily from Canada, were $12 million in 2012, $460 million nationwide. Other products include hemp seed oils commonly found in cosmetic products and hemp fiber based construction products including composite board and concrete. Newly researched hemp byproducts include biodiesel and biomass applications; evidence of success of those key components in industry is widely known.
In Washington, there exists a premier environment for industrial hemp production. Research has suggested that since major changes in federal and state law in the early 90’s regarding the Northern Spotted Owl, timber harvests were reduced 80% and over 168,000 jobs were lost statewide in the timber, pulp, paper and wood products industries. Not only will hemp grow like a weed in Eastern Washington’s fertile agricultural soils, the state has many shuttered wood products mills, factories and other industrial plants available on to convert to industrial hemp production.
The Pulp and Paperworkers’ Resource Council has tracked mill closures nationwide since 1981. According to their 2012 report, 89 production facilities in Washington have shut down, laid-off employees, closed machines or otherwise significantly curtailed production, resulting in the loss of 7,444 direct jobs. Nationwide, this figure is 99,501 jobs lost. In Washington State, primary strengths related to a surplus of capacity to convert to hemp production are a skilled workforce, production mills and facilities available for investment and retrofitting, and agricultural workforce and knowledge in the eastern part of the state where hemp will integrate into production and harvesting with minimal investment.
Economic benefits of increased job growth in this new industry are obvious. In pulp & paper, average salary statewide is $56,000. If only half of these curtailed jobs were replaced with hemp industry jobs with similar salaries, the direct impact to families and local economies would be about $120 million annually. Other hemp products industries could be incented to start up regionally, such as cosmetics, building products and oils; the effect of which is largely immeasurable, since there is no directly related surplus capacity information.
The key to fostering job growth and investment in this new industry is a friendly regulatory environment. Washington has an inconsistent history of economic policies in pulp, paper and timber over the past 25 years. It is important that the legislature and rule makers in state agencies understand incentives for private businesses to invest in a fledgling industry, and make good policy decisions when presented with a new opportunity like industrial hemp.
Clearly, the market conditions for growing, processing and manufacturing products utilizing industrial hemp in Washington State are desirable. The state has plenty of agricultural skill, acreage and workforce. Displaced workers in pulp, paper and other wood products are an available workforce that can be trained and deployed in hemp. Incentives exist for both private investment in production and new tax revenues for municipal governments. Demand for hemp products is growing nationwide. The State should consider the impact of legalizing private growing and production of industrial hemp as an important step to revitalizing the state’s struggling agricultural and manufacturing industries. Agency rules should not create a burdensome environment for licensing, certification, authorization and compliance. Certain tax and other municipal incentives should be considered to encourage private investment, especially since many jobs related to timber have been lost over the past twenty years.
[Featured image used under standard license, istockphotos.com]