Florida's Unfriendly Business Regulations Are Driving Out Hemp Companies

In 2018, the federal farm bill effectively legalized the mass cultivation of hemp, a cannabis plant containing less than 0.3 percent THC, the primary psychoactive component of marijuana.

The timing was perfect for Floridian Bryan Coco, who had started a hemp company, HGE, in Colorado the previous year. After the 2018 bill was passed, Coco realized the market would grow quickly and decided he wanted to cultivate and process hemp.

Because of Florida's nearly year-round sunshine and vast stretches of farmland, Coco initially intended to relocate company headquarters to the state. However, in spite of the ideal growing conditions, the Florida legislative process proved to be impossible; at that time, the only permit issued by the state went to the University of Florida, and all other permits were delayed until early 2020.

Not wanting to miss out on valuable research and development time in a burgeoning market, Coco says, he was forced to look outside Florida and eventually relocated to Pennsylvania, which already had a hemp pilot program underway. He says HGE is thriving now and has a 120-acre farm and a 4,500-square-foot indoor grow facility.

"Pennsylvania has been diversifying its pilot for years... [which has] put us in a better position to supply farmers with the compliant seeds they now need," Coco says.

The 2018 farm bill mandated that each state establishing its own hemp program must undergo a rigorous process and obtain final approval by the U.S. Department of Agriculture. The states that choose to participate are allowed to launch pilot programs before the USDA gives full approval. But in Florida, the pilot program is available only to universities — a decision made by Gov. Rick Scott when he signed legislation for the Industrial Hemp Research Pilot Program in 2017.

In effect, critics say, the state is stifling new business growth and ultimately leading to a less healthy marketplace. Despite Florida Agriculture Commissioner Nikki Fried's consistent touting of the state's rapidly evolving hemp industry as having enormous economic potential, hemp businesses, including Homegrown Essentials, have been forced to leave the Sunshine State for more progressively regulated regions of the country. In states such as Colorado, which legalized adult-use marijuana in 2012, laws that previously existed to quash any out-of-state investment in the Colorado marijuana market have been repealed and investors from all across the nation are being welcomed to inject capital into Colorado's flourishing pot industry.

"The industry is footloose and moves to whatever state offers the most business-friendly environment," says Jonathan P. Caulkins, a drug policy expert and professor at Carnegie Mellon University. "Onerous regulations can present significant costs; it's not just taxes that can drive businesses elsewhere."

Fried's office did not respond to a request for comment from New Times.

Hemp's popularity is on the rise, and the number of useful applications for it, from hempcrete for building purposes to CBD in wellness products, is growing daily. Coco says his company would not have been able to begin cultivation without the business-friendly regulations instituted by Pennsylvania. Though he doesn't discount the possibility of jumping into the Florida hemp industry in the future, he thinks his involvement will most likely be in the form of providing internationally and state-certified hemp genetics to Florida farmers.