Legal Hemp Denied in South Dakota as Nearby States Legalize

SIOUX FALLS, S.D. (AP) — Industrial hemp — a product Gov. Kristi Noem recently refused to decriminalize — has the potential to become a competitive commodity that boosts the economies of South Dakota's neighboring states, agricultural experts say.

Montana, North Dakota and Minnesota have had industrial hemp trial programs since authorization by the 2014 Farm Bill. Wyoming's governor recently signed a law approving industrial hemp, and the Iowa and Nebraska Legislatures are discussing similar measures.

Doug Goehring, North Dakota's agriculture commissioner, said legalizing industrial hemp production would expand farming to ensure a strong agricultural economy, the Sioux Falls Argus Leader reported. An average-sized farm in central North Dakota of 3,200 acres supports one family and produces around $1.1 million in yearly gross revenue, Goehring said.

"They only get to keep about 13 percent of that," he said. "The rest goes into the economy and that's what's fueling the economy."

North Dakota typically has between 26 and 43 producers cultivating roughly 3,000 acres of industrial hemp, which can be used in products including clothing, food and construction materials. Farmers usually begin with less than 100 acres of industrial hemp to become acquainted with the crop, Goehring said.

States with industrial hemp pilot programs see indirect advantages from sales taxes and farmers having more revenue to inject into the economy. Processing industrial hemp can be "a huge benefit for a company" and there's a rising number of companies getting ready to process industrial hemp in the Midwest, according to Anthony Cortilet, supervisor of Minnesota's industrial hemp program.

Noem has expressed concern that allowing hemp farming would eventually lead to the legalization of marijuana. The governor said law enforcement worries that industrial hemp production could complicate their work.

Under federal law, industrial hemp can only contain 0.3 percent THC, the chemical compound that gives marijuana its high.

North Dakota doesn't have worries regarding law enforcement, Goehring said, although he conceded some applicants to the industrial hemp test program have been denied because their proposal appears to be illegitimate.

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