In this post –
- Is Puerto Rico’s environment, land and climate conducive for healthy hemp growth?
- Does PR have hemp seasons, or can it grow all year?
- What are the fulfillment challenges?
- What are the incentives?
- Who oversees hemp regulations in PR?
- How does PR’s existing black market of cannabis cultivation cultivation affect the industry?
- Bottom Line
In July, Puerto Rico became the second territory to receive approval from the USDA for a hemp program. This allows the island to take ownership of licensing, growth, sales and manufacturing while receiving a whole new source of economic opportunity. In fact, PR could produce 10,000 acres worth of hemp next year, bringing up to $150 million in revenue. PR’s key advantage is its ripe land and tropical climate. But PR also faces hurdles in building the infrastructure needed to develop a soup-to-nuts industry while it fights a long history of black-market dominance.
Here we explore the future of hemp cultivation in Puerto Rico.
Is Puerto Rico’s environment, land and climate conducive for healthy hemp growth?
Puerto Rico’s key advantage—compared to nearly every state in the continental U.S.—is its geographical location in a tropical climate where land is ripe for healthy hemp growth. With over 2,800 hours of sun yearly, PR has plenty of light to nurture year-round growth. Moreover, PR has a large amount of land available for cultivation due to the fact that its agricultural sector is nearly nonexistent right now. Puerto Rico’s Caribbean location is also a key advantage for the fast shipping of raw or processed hemp to customers in North and South America.
There’s a lot to be excited about; however, Puerto Rico’s climate also lends itself to potential challenges. The island is home to constant rain and about 14 different types of molds, which can (and does) destroy entire hemp yields.
Does PR have hemp seasons, or can it grow all year?
According to Puerto Rico’s Department of Agriculture, the island’s climate will allow for hemp to be harvested three times a year. This a key distinction from most current producers, who can only harvest hemp outside once or twice a year due to colder climates.
What are the fulfillment challenges?
Since Puerto Rico’s last sugar-cane processing plant closed two decades ago, the island’s agricultural industry has dwindled into a ghost of what it once was. In fact, PR imports nearly 85% of agricultural crops due to its lack of industry and has suffered tremendous economic strife. Now that hemp has entered the realm of great economic possibility, the fledgling territory must rebuild from scratch, and hope that experienced processing and distribution companies step up to transform biomass into profitable products. What’s more, the country must put measures into place to ensure Puerto Rican farmers don’t get pushed aside while mainland American farmers flourish.
What are the incentives?
To promote explosive growth in a nonexistent market, Puerto Rico has established several incentives for local farmers, such as offering government-owned land and manufacturing facilities for rent. The territory is also hoping to attract mainland investment by reminding businesses that no passport is needed for U.S. citizens, the island runs on U.S. currency, and all investments are protected by the laws of the U.S.
Moreover, hemp farmers, businesses and investors can take advantage of the island’s economic incentives, tax exemptions and tax credits through several of its existing laws. To date, CannaVision has been one of the largest companies to announce its investment in Puerto Rico.
For the full list of tax exemptions, click here.
Who oversees hemp regulations in PR?
Puerto Rico’s Department of Agriculture created the Puerto Rico Hemp Licensing and Inspection Office (OLIC) to create, develop, promote and enforce hemp-industry regulations on the island. As a result, Puerto Rico’s Secretary of Agriculture signed guidelines in July 2019 entitled “Licenses for Hemp Research Pilot Projects (LPPIC),” and began issuing limited research licenses to farmers and manufacturers in the region. Now that Puerto Rico’s hemp program is officially approved, the territory can begin issuing licenses on a much larger scale.
How does PR’s existing black market of cannabis cultivation affect the industry?
Puerto Rico currently has a strong black market of cannabis cultivation, and those in the market don’t like legalization. In fact, there have been reports of break-ins at dispensaries where very little cash is stolen. Instead, thieves are reportedly stealing the product and reselling it at a much lower price due to the fact that they don’t have to pay the exorbitant taxes or fees associated with compliance. Fees such as mandatory staffing and security laws, and exorbitant electricity rates explain why Puerto Rican dispensaries reportedly charge about $80 for an eighth.
This ultimately creates a scenario where consumers are inclined to stick with the black market because the quality is high, the product is easily accessible, and the price is right. All of this begs the question: As the demand for hemp increases due to legalization, could the industry run into similar issues that medical cannabis is facing?
It’s far too soon to determine if hemp will be the savior to Puerto Rico’s massive debt problem while also reviving the island’s agricultural sector. Success will require steep investment by processors and distributors, and a large network of farmers who can mitigate mold risks to grow flourishing yields. It will also require a market where hemp products are easily accessible, affordable and high-quality. Only time will tell.
About ACS Laboratory
At ACS, we test hemp at every stage of its harvest cycle for 38 terpenes, 17 cannabinoids and 15 flavonoids to confirm the complete flavor, fragrance and therapeutic profile of the plant. We also test for molds, mildew, heavy metals and pesticides to guarantee products are clean and safe for consumer use.
ACS Laboratory’s 20,000-square-foot, state-of-the-art facility is located outside of Tampa, at 721 Cortaro Dr., Sun City Center, FL 33573. For more information, visit acslabcannabis.com or call (813) 670-9157.