NASHVILLE, Tenn. (WTVF) — Hemp farmers who spent all summer growing acres of crops are now finding there's no one willing to buy it.
With the promise of big payouts, farmers across Tennessee joined in on the pilot program. What many didn't count on was a lack of processors for the product and a lack of demand on the market.
Stanley Holder is one of the owners of Triple H Farms. He and his two sons planted 20 acres this year. They switched from growing and collecting tobacco in 2018 when their warehouse business lost a contract to a major tobacco purchaser.
Now, they can't find anyone to purchase their hemp. When they started growing, they believed they could make $25 a plant, or $40,000 an acre. However, processors are backing out. In two weeks, Holder will have four acres of hemp ready to ship in a barn on his property.
"It costs so much money to be a processor," said Holder. "You've got all of these people that are real small processors. They couldn't handle what was in this barn in a year. Then you get to these larger processors and they don't have the money to buy the crop."
Processing equipment can be very expensive. Holder took quotes for turning his tobacco warehouse into a processing facility, but it would cost about $8 million to purchase the amount of equipment he needed to make it worthwhile. It was too much money for investors.
Even the processors in Tennessee who are successful recognize the problem. "In this case we've created a bottleneck for processing with so many growers in the loop now," said Michael Sanders, president of AdvancedXtracts.
Sanders said everyone is suffering as the demand for hemp is not as high as the amount being produced. He believes too many people got into the industry too early.
"There is no green gold rush," said Sanders. "There are no sustainable or get rich quick schemes involved in the hemp industry. Like any industry, this is a marathon, not a sprint. If you don't have the intestinal fortitude to cross the finish line, maybe you shouldn't get in the race."
Sanders said he has his product already purchased and can't take in any more crop. He's currently building a new processing facility in Pleasant View.