A South Carolina hemp experiment that began six years ago on a wave of high hopes and big-dollar dreams has come crashing down on the hard realities of collapsing prices and inconsistent government regulations. Frustrated farmers and retail businesses are struggling in the wake.
Official S.C. Department of Agriculture (SCDA) numbers tell the tale. South Carolina experienced a rise from 20 state-licensed hemp farmers during a 2018 pilot program to 265 growersin 2020, followed by a nosedive to just 98 in 2024. And it’s not hard to see why. Hemp prices have fallen from up to$30 a pound to less than $5 a pound over the same period.
“There was a lot of broad interest in hemp farming during the first years of the program, but things have certainly settled down,” SCDA spokesperson Eva Moore told the City Paper. “The nationwide market for hemp grown for CBD got saturated very quickly, and farmers had to decide whether it made financial sense for them to stay in the business.”
For many, it didn’t.
A tough market for farmers
Clemson University agronomist David DeWitt has been a leader in the state’s efforts to make hemp work as a cash crop from the start. He says the SCDA program has been well-run, but that “market trends” have simply been too much for the industry to overcome.
“We were hoping it would become a real option for farmers as a true on-farm money maker,” he said in an interview. “But it just didn’t evolve to that due to the volume we could grow compared to what the market could stand.”
That supply-and-demand imbalance has been exacerbated by tight regulation on the farm end coupled with a complete lack of regulation on the retail side, he said.
For instance, DeWitt notes, under S.C. law, farmers can only grow hemp containing 0.3% or less of THC, the psychoactive substance in marijuana. But with no specific THC regulation for products like seltzers and gummies, the larger retail market that farmers need hasn’t been able to develop due to uncertainty about what’s legal and what isn’t.
“It can vary from county to county and city to city, as far as when a sheriff or police department will come in and take products off shelves,” DeWitt said. “The retailers just need answers.”
Former state Rep. Chip Limehouse of Charleston has seen the market problems firsthand on his farm in Aiken, where he had 22 acres of hemp under cultivation for several years before finally giving up his license in 2022.
He says that, in addition to the national issues with oversupply and a patchwork of state-by-state regulations, South Carolina got into the hemp business at almost precisely the wrong time, just as the market was peaking.
“We were a little late to the dance with so many other states approving similar measures,” Limehouse said. “And ever since, the market has just continued to go down, down, down, down, down.”
And that’s why the 22 acres he once dedicated to hemp are now producing tomatoes, he said.
A need for uniform retail regulation
Founded in 2021, Greenville’s Rebel Rabbit makes cannabis-infused seltzers that are formulated with all-natural cannabinoids from hemp grown in North Carolina and South Carolina. In addition, the company says its seltzers are independently tested to ensure they are within the .3% limit.
Nevertheless, they’ve had to work overtime to get, and keep, their products on store shelves. They say that was a particular challenge in February of this year, when the now former state Department of Health and Environmental Control (DHEC) issued new guidelines that initially appeared to ban most hemp-infused products.
“We wholeheartedly disagreed with that stance,” said Rebel Rabbit co-founder Pierce Wylie. “And with federal and state law on our side, they came back and changed their position to where it did create a path forward for the industry.”
Going forward, Wylie says the big challenge is at the federal level, where he believes Congress should impose uniform national standards for the industry. That way, he notes, big-box retailers like Walmart would be able to carry the products in all 50 states.
“We’re spearheading an initiative to create a beverage-specific coalition to lobby and educate legislators about the benefits we’re offering,” he said. “The goal is to create a path forward where this can be regulated just like alcohol is regulated.”
Next steps for farmers
According to experts, a better future for hemp in South Carolina will probably require two major changes: a new focus on hemp for industrial uses and the legalization of medical marijuana.
“In the future,” SCDA’s Moore said, “we would like to see the market continue to evolve toward providing more opportunities for growing hemp for fiber.”
Hemp fibers are used in products ranging from auto parts to paper to textiles. Economists say the market for hemp fibers is expected to quadruple in size over the next 10 years.
But just as important, some say, is medical marijuana.
“We need to foster and promote the cannabis industry in South Carolina, including a medical marijuana program in concert with our existing hemp program,” Limehouse said. “I’m a conservative Republican, but relative to medical marijuana, the benefits far outweigh any negatives.”
For the second legislative session in a row, a medical marijuana bill passed the S.C. Senate overwhelmingly but never received a vote in the House. The bill’s sponsor, Beaufort Republican Sen. Tom Davis, has pledged to bring it back next year.
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