Colorado Agriculture Department Fails to Secure Funds for Hemp Processing Equipment

A Colorado Department of Agriculture request for $5 million to buy hemp processing equipment has been denied, according to a Westword report. The agency had hoped to divide the funds between three private companies for hemp decortication operations, on the condition that each company matched the state funding for facility construction.

The Ag Department had sought the funds from the state’s Marijuana Cash Fund, which is intended for state programs related to legal and commercial cannabis. Subsequent attempts to obtain funding from other state sources, including a proposal to cut the decorticator grant budget to less than $2 million, were also denied, the report says. Without the funds, the proposal failed to receive a legislative sponsor or make it to any budgeting bills.

According to the department, as of last November, Colorado had just one working decorticator, and agency officials believe there are only two more in the country. The machines are not manufactured in the U.S. Building a hemp-processing facility with a decorticator can cost anywhere from $600,000 to $3 million, the CDA says.

In 2019, Colorado led the nation in registered acreage for hemp farming but that dropped 42% from 2019 to 2020, according to state Department of Agriculture figures outlined by Westword, and is expected to decline again.

A proposal for hemp decortication grants or business incentives could resurface next year if the proponents find funding outside of the Marijuana Tax Cash Fund.