Tracking Federal Grants Funding the U.S. Hemp Industry

hemp grant funding

By Eric Singular, Director, Hemp Business Journal

When the 2018 Farm Bill was signed into law, the designation of industrial hemp shifted from that of a controlled substance to an agricultural commodity a change which opened the doors for businesses, universities, and hemp industry stakeholders to gain access to government funding sources. Over the last few years, a handful of federal, state, and local grants have been awarded to fund industrial hemp research and market development.

One early recipient of federal grant funds was Cornell University: In August 2019, Senator Charles Schumer (D-NY) helped secure $500,000 from the United States Department of Agriculture’s (USDA) Agriculture Research Service for the nation’s only industrial hemp germplasm repository, at Cornell AgriTech located in Geneva.

It was a milestone for industrial hemp as an agricultural commodity, as the project was the first in the United States since prohibition to collect a seed bank for research, breeding, and conservation of the cannabis sativa L. species (i.e., hemp). The comprehensive collection of hemp genetics has been incorporated into the National Plant Germplasm System. Cornell’s hemp genetics curation and research enhances both characterizations and evaluations for agronomic performance and end-product quality traits to assist in plant breeding.

The National Industrial Hemp Council (NIHC), an industry trade advocacy organization to promote long-term growth and profitability of the North American industrial hemp industry, was another early recipient of federal grant funding. In November 2020, USDA’s Market Access Program allocated $200,000 to the NIHC to spearhead market research and trade facilitation with an emphasis on hemp markets in Asia and Europe. It came less than a year after it was announced that China would be required to import “true hemp” under the Phase One agreement of the U.S.-China trade deal.

In December 2020, the USDA’s National Institute of Food and Agriculture’s (NIFA) announced that it would begin accepting requests for proposals through its Sustainable Agriculture Systems (SAS) program, with the mission of improving plant and animal production, sustainability, human and environmental health, and advancing innovative research to promote land stewardship, a call to minimize the impact of climate change on agriculture and meet rising demand for food.

In January, the USDA’s Supplemental and Alternative Crops (SAC) grant program awarded $125,000 per year for a project period of up to four years to support the breeding, testing, and development of “superior performing” industrial hemp varieties. In March, NIFA grants included nearly $300,000 to Colorado State University for a study on hemp viruses and viroids, and another $300,000 to Oregon State University on feeding spent hemp biomass to cattle, i.e., its Cannabinoid Residuals, Animal Health, and Product Quality program. The funds were part of $8.5 million in funding spread across 29 research and extension grants.

That same month, Pennsylvania Agriculture Secretary Russell Redding announced nearly $160,000 in state funds for three projects to increase consumer awareness of industrial hemp products, opening additional market opportunities for growers and processors in the commonwealth.

Weed control and pathogen resistance have been areas of focus for grant funding. In September, it was announced that Lynn Sosnoskie, assistant professor in Cornell’s  School of Integrative Plant Science, would lead a $325,000 hemp weed-management study.

Last month, as part of a $146 million investment through the SAS program, $20 million was granted to two university-led industrial hemp research projects extending over the next five years. Oregon State University’s Global Hemp Innovation Center received $10 million to identify economic opportunities for hemp in the Western U.S. The other $10 million was granted to Wilberforce, Ohio-based Central State University (CSU) to research the viability of using hemp as an aquaculture or fish-farming feed ingredient to address food-safety concerns about consuming seafood raised with feed additives.

The funds to Oregon State will be split among eight universities (including $1.3 million to Washington State University, the University of California, Davis; and the University of Nevada, Reno Extension), plus the USDA, the Agricultural Research Service; the U.S. Department of Transportation, Volpe National Transportation Systems Research Center, the Federally Recognized Tribes Extension Program; 7 Generations (a Native American-owned firm specializing in Indian Country business development); the National Agricultural Library and the USDA’s Western Rural Development Center. As the region is generally arid and comprises both irrigated and dryland farming, the project will assess the transportation corridor connecting Washington, Oregon, Nevada, and California east of the Cascade-Sierra Nevada Mountains from Canada to Mexico to spur the industrial hemp sector for Native American and other regional businesses and farmers in the Western Pacific region.

On the other hand, researchers at Central State will partner with each the College of Menominee Nation, Kentucky State University, University of Delaware, University of Kentucky, and Mississippi State University for a project that pursues the approval of hemp grain as a sustainable feed ingredient to produce high-value, nutrient-dense fish, the better to both expand domestic markets for hemp and create a more diverse workforce in agriculture. Additionally, the project will serve to increase diversity in aquaculture by training Black and Native American graduates in agriculture, and increase economic markets and production sustainability for seafood and hemp.

Project lead Brandy Phipps, Ph.D., a research assistant professor of food, nutrition and health at Central State, explained how stated that “when we think about high-value fish—like rainbow trout, which is what we’re going to be working with—for them to be grown in fisheries and aquaculture, they typically have to be provided with fish oil and fish meal. These products most often are sourced from wild-caught fish, which is both expensive and impacts the environmental sustainability of the system. It also tends to be the most expensive ingredient in aquaculture feed. So, if we can replace some or all of the fish oil or fish meal with hemp products, we have now transformed a system to produce nutrient-dense fish in a way that may be less burdensome to the environment and at a better price point for both the producers and consumers.”

In September, the National Association of State Departments of Agriculture (NASDA) urged the USDA to split industrial hemp into two distinct categories for grant-funding purposes depending on the crop’s intended use. While hemp grown for cannabinoid production would likely remain under USDA’s Specialty Crop Block Grant Program, hemp production for grain and fiber could be designated as an agronomic commodity. That could be significant both for future industrial hemp research and development and its commercialization, as it would open new channels for grant funding and subsidy considerations.

Federal grants for hemp research are not without critics. Some have pointed to potential conflicts of interest, while others have commented that the recently awarded $20 million to Oregon State and Central State could have been used to fund building decorticators facilities for hemp fiber-processing in the U.S. Overall, critics have contended that USDA and its adjacent agencies should do more to leverage insights from industry stakeholders in making decisions about allocating grant finds. However, it should be noted that the request for grant proposals and the reviewal process are stringent, and thus limited in their latitude. For now, it seems that mostly grant funds have been awarded to university-led, research projects focused on genetic, agronomic, and market development.

Overall, the USDA has awarded $21,875,000 in grants to fund hemp research and market development since the passage of the 2018 Farm Bill. While this number has been greatly increased by funds recently awarded to Oregon State and Central State through the SAS program, it is a drop in the bucket for agricultural grant-funding in the U.S. In April, the USDA made more than $330 million available to help agricultural producers and organizations in the food supply chain recover from the financial impacts of the COVID-19 pandemic. Just last month, the agency announced an investment of more than $243 million in grants to support specialty crops.

If Biden’s climate plan (which includes incentives for carbon farming for which industrial hemp could be well-suited) survives the Congressional Budget Office, the U.S. government is going to need to throw significant financial support at the hemp industry to bolster swift growth of the market and success for stakeholders across the value chain. For now, the Cannabis and Hemp Research program at the University of California, Davis tracks a robust list of the grant funds currently available for industrial hemp.