How to Start a Hemp Farm

Part 1 - How to start a Hemp Farm business - Background

Hemp farming continues to gain popularity as a high-yield, (relatively) low-maintenance crop that manufacturers can process for a wide variety of commercial applications.

Our guide is in 3 parts:

• Part 1 - How to start a Hemp Farm business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a hemp farm?

Hemp farming requires land. Buying farmland — along with farming and irrigation equipment — will require a sizable, upfront investment if you aren’t already farming. If you’re already a farmer, your initial costs will mostly focus on seed stock or clones for starting crops. You’ll also need to secure any required state and local licenses as well as insurance. Most costs associated with growing row crops, such as fertilizer and pest control, are already factored in for annual operating costs.

What are the ongoing expenses for a hemp farm?

Most ongoing expenses include buying seed stock or clones as well as farming supplies, maintaining farm equipment and buildings, paying worker salaries, and purchasing individual and farm insurance.

Who is the target market?

Hemp farming has both commercial and retail markets to consider. As a textile product, hemp’s commercial market includes businesses looking to compete with various products they can now make with hemp. Plastics, paper, building products, and fabrics are all products challenged by hemp.

In the retail space, customers buying hemp products tend to be younger and more liberal-minded although hemp fabrics and cannabidiol (CBD) sales reach into a wide range of demographic markets. College-educated people aged 25 to 50 represent a core group of hemp customers.

How does a hemp farm make money?

Hemp farms make money from the sale of their bulk, dried hemp.

How much can you charge customers?

Hemp is sold as a commodity so the market dictates the price. Farmers can sell their hemp plants as the fiber, the seeds, or both — with each option priced accordingly. Although prices continue to increase, as a market average, beware of ballooning figures based on speculators. Some in the industry fear hemp’s meteoric rise in popularity may cause a bubble similar to what the technology industry experienced in the early 2000s. Current wholesale prices vary between raw and processed hemp products, ranging from $3 to $3,000 per XXX.

How much profit can a hemp farm make?

Farming is a tricky business. While farmers don’t often turn a huge profit, it’s possible to keep overhead costs low by handling as much of the work as possible with a small crew. Hemp farming has the potential for good profits, but you must temper your expectations with the knowledge that Mother Nature can sometimes be a fickle and difficult partner. Average hemp farming profits typically fall in the range of $200 to $250 per acre.

How can you make your business more profitable?

Currently, hemp farming is experiencing a popularity surge. Offer the general public a chance to see what you do in an effort to destigmatize this plant. Many people will enjoy guided tours and farm visits. You might even consider using your farm as a backdrop for photo shoots. Some individuals would love to be immortalized on film, surrounded by your leafy greens.

Day-to-Day and Growth

What happens during a typical day at a hemp farm ?

Much like any farm, most days involve monitoring existing farm systems and equipment as well as your crops. Farming often involves waiting for certain times — both for planting and harvesting. With hemp, the growth cycle averages 110 days. Farmers can stagger or “cycle” their fields between planting, growing, and harvesting to generate a larger annual yield and a constant flow of work. After harvesting and baling their hemp, farmers ship it to manufacturing plants around the country. As such, some daily operations may include the logistics of shipping and receiving.

What are some skills and experiences that will help you build a successful hemp farm ?

Farming experience is a great start. Growing crops involves much more than soil, water, and sun. Experience in the tractor saddle really can give you an edge. Understanding the business world and, specifically, the hemp market, also will prove critical to success. 

While this industry is poised to explode in popularity and demand, the structure and legality of hemp products remain subject to sweeping changes. Understanding the political nature of this crop and how to navigate dissenting opinions of your industry also will be essential.

What is the growth potential for a hemp farm ?

With the legalization of hemp farming around the country, many textile and clothing manufacturers now recognize the benefits of hemp fibers. Hemp has been used for thousands of years in numerous products, such as fabrics and rope. Today, modern manufacturing also uses hemp fibers as a biodegradable plastic replacement. Of course, there is the ever-growing cod market, which has been embraced by numerous citizens from all walks of life as a pain reliever and beneficial dietary additive. Overall, industry experts project hemp farming will remain increasingly popular and profitable for the foreseeable future.

What are some insider tips for jump starting a hemp farm ?

Hemp farming requires a solid demand for your product. Luckily, that demand continues to grow more and more each day. Your business also will need big voices and backers to help share and promote your vision. These include industry leaders in textiles, fabrics, and building materials. The stigma of hemp’s relation to marijuana will continue to turn away some potential clients, but, more than ever, consumer approval seems too positive to ignore.

Align your business with other forward-thinking businesses and act as a voice for environmentally conscious farming. Hemp farming challenges some large industries, such as forestry and fossil fuels, so retaining a market share requires finding allies at all levels. Growing your support team and customer base will be key for growing your overall company.

How and when to build a team

Because of the nature of rotational farming, your team will ebb and flow. For harvesting and baling, your team will swell. But, you won’t need much help during the growing phase. A medium-sized farm may only need two or three people to keep it operating, for example, plus a few more field hands during harvest. A large-scale farm might need three to five equipment operators and a few more field hands to round out its team.

Part 2 - Is a Hemp Farm business the right fit for you?

Part 3 - Action plan to launch your Hemp Farm business in 90 days