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Are Texas hemp crops concealing marijuana? Maybe, says Texas ag commissioner

AUSTIN, Texas — Texas Agriculture Commissioner Sid Miller is known as a big booster of hemp production in the state, cheering legalization of the crop in 2019 and even planting a few acres himself since then on land near Stephenville.

That’s why an assertion Miller is making has caught fellow advocates for the fledgling Texas hemp industry by surprise — he contends some growers are "probably" using hemp fields licensed by his office as fronts to cultivate marijuana, which is identical to hemp in appearance but illegal.

"It is highly probable," Miller said in a recent interview with the American-Statesman, although he acknowledged he has no proof.

“We probably are growing marijuana in Texas (concealed in licensed hemp fields), just no one wants to admit it," he said.

Miller raised the issue as an illustration of what he says is inadequate funding for his agency to oversee the 2-year-old hemp program — a problem he said state lawmakers have yet to take seriously.

But farmers say the charge of illicit marijuana production is off-base and amounts to a below-the-belt jab amid what already has been a challenging introduction to the hemp industry.

Hemp — which has a variety of consumer and industrial uses and, unlike marijuana, isn't psychoactive — generated significant excitement when it was first legalized in Texas in 2019. Since then, however, overproduction in states where it already was legal, cratering prices and a lack of processing facilities have dulled some of the enthusiasm and rendered profits hard to come by.

"Farmers (in Texas) are already struggling just to find a foothold in this industry and make money — they really don’t need that" allegation from Miller, said Zachary Maxwell, president of an Arlington-based group called Texas Hemp Growers.

Miller has been a strong supporter of the state's hemp industry, Maxwell said, but "that kind of rhetoric is really dangerous," partly because it might invite law enforcement harassment of hemp producers who are following all of the state's extensive regulations.

"I make it around to quite a few (hemp) farms here in the state, and I have seen no evidence" that any are fronts to cultivate marijuana, said Maxwell, who grows a small amount of hemp in an indoor facility near Houston.

Aaron Owens, who is growing about three acres of hemp on a farm near Luckenbach, agreed, saying Miller's comments will bring undeserved "negativity" to a small Texas industry that's still trying to establish itself.

“I definitely don’t think that is what is going on, and I am right in the middle of it," said Owens, a founding board member of a trade group called the Texas Hemp Coalition. “Personally I don’t think that at all — I haven’t even thought that for a minute."

Hemp growers in the state must pass background checks showing they haven’t had felony drug convictions within the past 10 years. They're also required to foot the bill for mandated third-party sampling and testing to ensure their hemp crop doesn’t exceed the legal threshold for tetrahydrocannabinol, or THC, which is the substance in marijuana that induces a high.

But Miller said he lacks resources to carry out other aspects of the program — including optional field inspections. Money was supposed to come from portions of the various hemp licensing fees, such as $100 per-field permits to grow the crop and $100 permits for storage facilities. But the amount of hemp production in the state, and thus the licensing fees, has so far been minuscule.

In 2020 — the first year that hemp could be planted in Texas — permits were issued to grow about 5,500 acres, well below some forecasts that had projected over 10,000 acres.

The amount is likely to be down again this year, with permits for only about 2,900 acres issued as of July 31, according to Miller's office. Still, the number of active producers has risen — to 1,100 from 893 in July last year — signaling that more people may be taking an interest in the crop but planting smaller amounts.

Miller said his agency needs a minimum of $1 million annually to inspect hemp crops and properly oversee the program. But only about $400,000 was generated from permits last year, he said, the bulk of which his department was required to turn over to the state under a fee-sharing mandate and leaving him with scant financial resources.

Craig Jenschke owns the farm in Luckenbach where Tejas Hemp is growing hemp this year. Jenschke traditionally grows fruits and vegetables, but about three acres have been set aside for the new crop. "It's just growing plants, and I've done that forever," he said.

"It's not like I'm money-hungry, but I am concerned that there is a strong possibility" marijuana is being concealed on state-licensed hemp fields, Miller told the Statesman. "I don't want the blowback to be on our department" if the suspicion ends up being borne out.

He voiced similar marijuana-related concerns to state lawmakers earlier this year, although — publicly at least — he didn't describe it as "highly probable" at the time.

“I was never able to send an inspector out (in 2020) to certify a field to see if it was hemp or if it was marijuana," Miller said in March, during testimony to the House Committee on Agriculture and Livestock. “We really have to do a better job of that. Somehow we've got to change that situation — it's not a good one.”

He said lawmakers didn't follow up in the wake of his testimony with an effort to address the issue.

But state Rep. DeWayne Burns, who chairs the House committee, told the Statesman that alarm bells weren't sounded about marijuana production being concealed on state-licensed hemp fields — although he said he recalled Miller making "some general statements" about the hemp program's funding constraints.

“If there is the fear or allegation that marijuana is being grown because of the hemp program, then we have got to address that," said Burns, R-Cleburne. "That is not something I take lightly or would take lightly."

Now that he's aware of the allegation, Burns said he intends to seek authority for his committee to hold interim hearings to get to the bottom of the issue prior to the next regular session of the state Legislature in 2023.

State Rep. Tracy King, who isn't a member of the House agriculture committee but had a leading role in crafting the 2019 bill that legalized hemp production in the state, said he wasn't aware of the allegation either.

"I don't have any reason to believe that is the case," said King, D-Batesville. “There are protections in place to guard against it. If it turns out in a few years that law enforcement tells us it is a problem, we will deal with it.”

A spokeswoman for the Texas Department of Public Safety said it has responded to some reports by residents about possible marijuana-growing operations, but she said they turned out instead to be state-licensed hemp fields with no evidence of illegal activity. She said the law enforcement agency hasn't been asked by Miller's department to search any state-licensed hemp fields.

Regardless, the controversy generated by Miller's assertion appears likely to take time to resolve. Neither Owens nor Maxwell is happy about the dustup, but both said they view the outlook for the nascent Texas industry as promising nonetheless.

Hemp has multiple uses, with some strains grown for cannabidiol — known as CBD, an extract heralded for an abundance of perceived human health benefits. Other strains are cultivated for fiber and related components aimed at industrial buyers, although those markets are taking time to develop.

Owens, who calls his operation Tejas Hemp and cultivates a strain rich in CBD and other non-psychoactive elements for consumers, said he anticipates turning a profit from his initial Texas crop that he planted and harvested last year near Dripping Springs — once he's finished marketing and selling the finished products.

Hemp farming “is not easy and it's not for the faint of heart," Owens said. "It’s very challenging. But the future is still super bright" for the industry in Texas.

Miller is among those who agree with him, despite his recent marijuana contention.

The Texas hemp industry "is going to take time to level out and find its niche," Miller said. "But we will get there."

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