Justin Matson of Fairfield Township is a jack of all agricultural trades.

He employs 18 people growing corn, soybeans and hay, raising beef cattle and doing construction. This year he decided to add something new to his resume — hemp.

“This could be huge for us,” he said.

The price of hemp plunged last year because of a glut in supply. Farmers grew more of the newly legal crop than the limited number of processors could buy.

That didn’t scare off Matson, or hundreds of other Pennsylvania farmers who received their state Department of Agriculture permits to grow hemp in 2020.

“The market pricing hasn’t really deterred anybody,” said Erica McBride-Stark, executive director of the Pennsylvania Hemp Industry Council and the National Hemp Association.

More farmers, fewer acres

Last year, 324 permitted farmers grew more than 4,000 acres of hemp in Pennsylvania, according to the state Department of Agriculture. In 2020, there are more than 500 permitted farmers — but they’re growing less hemp overall.

The department has permitted more than 3,200 acres of hemp, but it’s not yet known how much of that was actually planted.

Matson got a permit to grow 100 acres but planted only two.

He’d hoped to grow more but decided to start small to learn the basics, avoiding the pitfalls experienced by farmers who over-committed in 2019 and were left with a harvest they couldn’t sell.

Harvest season is approaching, but it’s too soon to tell whether farmers will have better luck selling their crop this year, Mcbride-Stark said. There’s some reason to believe the industry could be in for a repeat of 2019. She’s fielded numerous calls from farmers looking for advice on how to sell their crops.

“It indicates that most of them probably didn’t have a plan,” she said.

Matson planted more than 3,000 hemp plants in May and plans to harvest them in late September.

He will dry hemp flowers into a smokable product, selling directly to small stores and consumers. He hopes this will allow him to find buyers.

“We’re not relying on any big processors,” he said. “We’re pretty determined. We’re not going to be sitting on this all year.”

Hemp also can be used to make CBD products as well as a variety of other uses, including clothing, food, paper and more.

It’s unclear whether demand for hemp products will be affected by the coronavirus pandemic that has shaken the economy.

“It’s hard to say because covid is impacting all of our lives on every level,” McBride-Stark said.

Hemp is not eligible for funds from the U.S. Department of Agriculture’s Coronavirus Food Assistance Program.

Optimism remains

Despite last year’s crash, Pennsylvania’s hemp newcomers still believe in the crop’s future.

“It hasn’t even started yet,” said Russ Cersosimo, chief marketing officer of Hemp Synergistics in Leetsdale. “If you look at where this is going to be in 2030, this is going to be a $100 billion industry.”

Hemp Synergistics is one of 61 hemp processors approved by the state. The company makes cannabidiol products.

Hemp Synergistics opened shortly after the closure of Commonwealth Alternative Medicinal Options, which opened a 45,000-square-foot processing facility in New Stanton to much fanfare, only to shutter when the price of hemp cratered.

Cersosimo said he and the other founders of Hemp Synergistics watched the rise and fall of CAMO with interest.

“We said those guys will be out of business within a year,” he said. “They’re out building these big extraction systems, and what they don’t know is going to hurt them.”

Cersosimo said Hemp Synergistics is taking a slower approach that can withstand price swings. Those in the industry should treat hemp like a normal crop rather than expecting the return of high prices, he said.

“What happens in this industry, and with any new gold rush, you’re going to have people that jump in blindly because there is so much money to be made,” he said. “When it’s (priced) as a commodity, and everybody realizes that’s where it is, that’s when people are going to be able to make a legitimate business plan.”

Regulation looms

The future of the hemp industry is further muddled by the ever-changing nature of regulation.

Commercial hemp production was legalized by the 2018 Farm Bill. The crop previously was treated as a controlled substance, in the same category as marijuana or heroin.

The USDA released interim regulations for the crop in October. It mandates hemp harvests must be tested for THC in labs registered with the federal Drug Enforcement Agency, and provides strict guidelines for how to dispose of crops.

THC is the psychoactive chemical in marijuana, which — like hemp — is a variety of the cannabis plant. Any plant with a THC level higher than 0.3% is legally defined as marijuana.

Several states, including New York, have protested these regulations, calling them too restrictive, according to industry news site Hemp Today.

Pennsylvania’s hemp regulations are in line with those proposed by the USDA, according to the state Department of Agriculture. This means Pennsylvania hemp farmers will be eligible for USDA grants.

The federal Food and Drug Administration is working on regulations for CBD products, though the proposed rules have not been made public, according to McBride-Stark.

Despite the uncertainties, farmers are excited to get in on the ground floor of hemp, McBride-Stark said.

“Even with the prices dropping as dramatically as they did, if you can find a buyer it can still be quite profitable,” she said. “Of course, that’s a big if.”