President Trump's June executive order establishing federal payments for regenerative agriculture practices includes hemp farms but explicitly excludes state-licensed cannabis operations, creating a new divide in an industry already struggling with federal banking and tax barriers.
The order incentivizes farmers to adopt soil-building practices like cover cropping, reduced tillage, and microbial inoculation. Hemp cultivators can apply for these funds. Cannabis growers working with identical techniques cannot.
The exclusion affects thousands of small-scale cannabis farms that have invested heavily in regenerative methods—from mycorrhizal fungi inoculation to composting systems—without access to the agricultural support available to conventional farmers. Many continue the practices anyway, betting on long-term soil health despite the immediate cost disadvantage.
The Regenerative Reality
Several cannabis operations have built entire business models around soil regeneration. A Vermont cannabis farm profiled in the original reporting feeds its fields with dairy manure and spent grain from local breweries, building organic matter while reducing waste streams. The operation uses no synthetic fertilizers.
But without federal support, these farms shoulder costs that conventional agriculture can offset through USDA programs. The price gap widens as hemp growers—producing a federally legal crop since the 2018 Farm Bill—access the same incentive payments available to corn and soybean farmers.
The distinction highlights cannabis's continued federal Schedule I status. While the Drug Enforcement Administration has proposed rescheduling cannabis to Schedule III, the plant remains illegal under federal law. That classification prevents USDA from including state-licensed marijuana operations in agricultural programs, even when those operations employ identical farming methods to qualifying hemp farms.
Industry Response
Cannabis farmers are adapting. Some pursue organic certification through private organizations rather than USDA Organic, which remains unavailable to marijuana growers. Others document their regenerative practices through third-party certifiers, building marketing value around soil health claims.
The Rodale Institute and Regenerative Organic Certified have both worked with cannabis farms, though federal prohibition complicates the certification process. These private standards require similar practices to USDA programs—cover crops, compost applications, reduced chemical inputs—but without the financial support.
Mycorrhizal inoculation, a practice that improves nutrient uptake and soil structure, has gained traction among cannabis cultivators despite the upfront cost. The fungi colonize plant roots, extending their reach and improving drought resistance. Hemp farmers can now offset these investments with federal payments. Cannabis farmers cannot.
What's Next
The executive order doesn't change cannabis's federal status, but it sharpens the competitive disadvantage between hemp and marijuana cultivation. As hemp production expands with federal support, cannabis farms face higher input costs for identical practices.
Some industry advocates argue that rescheduling to Schedule III—if finalized—could eventually open USDA programs to cannabis growers. But that process remains pending, with no clear timeline for implementation.
For now, cannabis farms committed to regenerative agriculture are making the investment without federal help. The Vermont operation continues composting brewery waste. Other farms keep inoculating with beneficial fungi. The soil improves. The support doesn't come.
This article is based on original reporting by hightimes.com.
