Let’s Talk Real Estate – October 2019
In the last few months, we have seen an explosion of hemp fields being planted along every road you drive as hemp quickly becomes the largest agricultural crop, surpassing pears and vineyards, in Southern Oregon. Based upon statistics from the Oregon Department of Agriculture, Jackson County has 8,578 acres planted giving the county the distinction of being the largest grower of hemp in Oregon. To provide some idea of the scale of hemp, Jackson County has 2,850 acres of grapes and 3,800 acres of pears.
The question becomes, what will be the effect of hemp on our valley? Is hemp a boom to our local economy because of the high demand, or a determent, because it is a cousin of cannabis and has a distinctive odor that some find objectionable?
Hemp is one of the fastest growing plants and can be used to make a variety of commercial and industrial products, including rope, textiles, clothing, shoes, food, paper, bioplastics, insulations, biofuel and on and on. In Southern Oregon, it is being grown mainly for CBD, or cannabidiol, which some studies suggest result in various health benefits as they react with the human body’s endocannabinoid system. I’m not sure what that means, but I do know many of my friends and family tout CBD’s healing capabilities in helping depression, anxiety, pain, and sleep disorders.
Although I haven’t read a lot of conclusive research yet, the FDA has approved a drug using CBD called “Epidiolex” for the treatment of seizures associated with epilepsy. The FDA is in the process of testing many drugs using CBDs, so how wide spread its use will be in prescription medicines, will soon be known.
The short-term effect on our local economy is being felt. Across our valley, pear growers, cattle ranchers, hay growers, farmers and those with pasture land that may have sat fallow for years are now leasing their properties to hemp growers for $1,000-$5,000 per acre for the season. It’s great to see our local farmers making money again. Even minimum-wage workers can leave their jobs for hemp field work that starts at $14 an hour and goes up to $20 hour, all paid above the table, with taxes and Social Security. As for the hemp growers, they can yield $40,000 to $50,000 per acre, but the upfront costs to get the field ready can run up to $20,000 an acre.
A rough calculation based on the 8,578 acres planted in hemp x $40,000 an acre adds up to a crop that can boost the Jackson County agricultural economy by more than $340 million this year.
My personal view comes from living in rural Sonoma County and working in the San Francisco Bay area prior to moving here. The area I lived in was all farmland and once a year the dairy farmers would spray all their fields with a fertilizer consisting of cow manure and water. That caused quite a smell and attracted swarms of flies for about a month. You quickly got used to living in a rural area among farms and I realized fertilization was a necessary part of farming. Also, being from the SF Bay area, which was home to thousands of high-tech companies, I was surprised by the lack of good-paying jobs and the lack of a successful economic base when I moved here. The greatest growth that I have seen in our local economy has come from tourism, the wine industry and the increasing number of escapees and retirees who move here and bring their money or jobs with them. It just feels really good to see our local economy growing from within, and the thought of adding over $300 million in to the economy is a nice boost to all of us.
Time will tell if the demand for hemp increases and if the climate in Southern Oregon, the local expertise and the facilities will sustain a strong industry for the foreseeable future. But for now, let’s enjoy the growth in our local economy and remember, when you smell that distinctive odor, you may actually be smelling the smell of success.