The commercialized processing and farming of hemp were legalized in 2018 when the 115th Congress of the United States passed the Agriculture Improvement Act of 2018. The Agriculture Improvement Act, sometimes called the Farm Act or Farm Bill, now allows farmers to grow and harvest hemp for commercial purposes.

According to the National Conference of State Legislatures, three states/territories do not allow the commercial growing and processing of hemp: Idaho, Mississippi, and Washington, D.C.

To make money from processing and farming hemp, you will need to know the laws, requirements, and methods to do so. Each state has its own laws regarding hemp processing, farming, and compliance, so it is important to look up the laws and regulations of your jurisdiction before getting started.

Step 1: Obtain a License

The very first step in making money from processing and farming hemp is to get a license. The cost and conditions of the license will vary from state to state, so it is important to know your state’s requirements when applying for a hemp license.

To obtain a hemp license for commercial use, you will need to visit your state’s Department of Agriculture website to fill out an application. Depending on the state in which you live, you may have to submit more than one type of application.

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For example, in the state of Georgia, you will need to apply for both a Hemp Processor License as well as a Hemp Grower License; whereas, Indiana has three different licenses to choose from: grower, handler, or researcher.

Check your local jurisdiction to find out if you will have to apply for more than one license for processing and farming hemp, or if there is a specific license for the hemp farming you are planning to do.

Step 2: Know Your Permissions and Restrictions

Just because your state may be one of the 48 that allows the commercial cultivation of hemp does not mean you are free from restrictions. Each state is different in the permissions they grant when approving a hemp processing application.

There will likely be language in the hemp license that requires you to list the coordinates of your farm so that field inspections can be conducted. This may be one of the many requirements you have to follow when obtaining a hemp license.

Some of the restrictions of your hemp license may include the manner in which you are cultivating hemp. For example, Texas law allows hemp to be cultivated and produced for the sale of hemp crops, consumables, and other applications except for smoking.

If your state allows you to process and farm hemp, it is important to research any laws, restrictions, and regulations before getting started so that you don’t find yourself in a legal situation. Consulting a lawyer is always the best idea when navigating through laws, statutes, and codes.

Step 3: Choose Your Hemp Product(s)

Hemp processing produces more than just the CBD supplement, although CBD is one of the leading causes in the increase of hemp processing. Farming hemp means you can produce paper, plastic, food, nutritional supplements, and thread/fibers.

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What type of market will be the most profitable? Have you already been contacted by purchasers who are interested in buying a specific hemp product? Do you want to take advantage of the demand for CBD oil and supplements?

Your first step is deciding what type of hemp products you will be producing so that you know the best way to market them in the hemp industry. Next, you will want to research the profitability of hemp in the manner in which you will be selling it.

Let’s use CBD supplements as an example.

If you are going to be processing hemp for CBD production, you should look up the profit margins for selling hemp for CBD production in your area. The demand for hemp can vary throughout the different regions of the country. Even a low demand for hemp can yield a profit of around $2,500 per acre.

Step 4: Consider Your Climate

Hemp grows best in warm, humid climates that receive an adequate amount of rain. It doesn’t have to be too dry or too wet for hemp to thrive. Because of this, hemp is a relatively low-maintenance crop to harvest, especially if you live in a climate that is suitable for producing hemp.

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To ensure the quality of your hemp harvest is at the top of the line, make sure that you purchase quality hemp seeds. The quality of the seeds and the conditions of the environment will ensure that you reap a quality harvest of hemp.

If you have been struggling with harvesting a crop that requires ideal conditions, such as a large amount of rainfall or excessive amounts of sunlight, you should consider harvesting a crop that is less maintenance that can thrive in imperfect conditions. A hemp harvest is better than no harvest at all.

Step 5: Set Up a Plan or Partnership

Depending on the state in which you live may determine to whom you can sell your hemp harvest. Some states only allow hemp cultivation to occur between farmer and researcher. If this is the case for your jurisdiction, you will need to contact a hemp researcher to whom you can sell your hemp.

Other states may allow you to sell your hemp harvest to CBD manufacturers or other hemp product manufacturers. Based on your state’s laws and regulations regarding hemp, you will need to choose a method in which you will be selling your harvest and put that method into place before getting started.

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How to Make Money from Hemp Processing & Farming: A Quick Recap

Before you make your first purchase of seeds, equipment, or materials, you will need to research your state’s current laws regarding hemp farming, processing, and cultivation. Once you know your state’s permissions and conditions, you can obtain a license and make a financial plan for your hemp processing and farming business to follow.

Your financial plan should include purchasing seeds, materials, and equipment that you may need to use throughout the cultivation process. Then you will set up a profit margin and find a purchaser who will want to purchase your hemp in the method that is legally allowed in your state.

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