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Bank Strategy Briefing: The Hemp and CBD Proposition for Wisconsin Banks

Wisconsin’s hemp and CBD economy is officially online and community banks are getting a front row seat. In its second year, buoyed by the 2018 Farm Bill at the federal level, which removed hemp from the Controlled Substances Act and cleared the way for hemp as a mainstream crop, the Wisconsin Industrial Hemp Research Pilot Program is seeing immense growth in the number of grower and processor license applications. Wisconsin is retaking its historical position as the national leader in hemp production. 

Skyrocketing growth in license applications 

For the 2019 growing season, the Department of Agriculture, Trade and Consumer Protection received 2,227 applications from growers or processors. Of those, roughly 700 are for processors and roughly 1,500 are for growers, a noteworthy increase from an already robust 100 processor licenses (~700% increase) and 247 grower licenses  (~607% increase) issued in 2018.1 In total, roughly 1,200 acres throughout Wisconsin have been registered for hemp production in 2019.2
This level of interest far exceeds the scope of other leading hemp states. In 2018, Colorado had 386 licensed growers, while Kentucky had 209 licensed growers and 43 licensed processors.3

Financial benefit for growers

As we await hard data on Wisconsin’s first years of production, it is not hard to imagine why farmers across the state are looking to hemp as a solution to years’ worth of thin margins and depressed commodity prices on traditional cash crops. A survey of other states shows the potential of this new crop:4

Wholesale Price By Product; Average price per pound
State Seed Flower
Colorado $9  $28 
Kentucky $0.75  $35 
Oregon $0.05  $100 
New York $1.38  $100 
North Carolina $1  $25 
Tennessee $10  $100 
Vermont $1  $100 
Nevada $10  $200

By comparison, a bushel of corn weighs 56 pounds and sells for around $3.30 a bushel, or approximately $0.06 a pound. A bushel of soybeans weighs 60 pounds and sells for around $8.00 a bushel or approximately $0.13 a pound. 

New Businesses Abound 

Since 2018, corporate records maintained by the Department of Financial Institutions show 236 newly organized corporate entities referencing either “hemp,” “CBD” or “cannabis” in the company name. This number, while impressive, captures only a fraction of the businesses entering this market. 

As with any new sector, change will remain a constant. In the coming years, Wisconsin will be shifting from the pilot program to a more robust market regulated under the 2018 Farm Bill leading to changes in state laws and regulations surrounding hemp and CBD…and possibly creating new opportunities for banks. 

Numbers provided by DATCP as of May 10, 2019.
Provided by DATCP as of May 10, 2019.
Hemp Report: Top 10 U.S. States 2018, Hemp Industry Daily, available at

Copyright © 2021 Godfrey & Kahn S.C.National Law Review, Volume IX, Number 148

About this Author

Zachary Bemis insurance lawyer Godfrey Kahn
Special Counsel

Zach Bemis is an administrative and regulatory attorney and a member of the firm’s Insurance Practice and Political Law Groups.

Prior to joining Godfrey & Kahn, Zach served as Chief Legal Counsel at the Wisconsin Office of the Commissioner of Insurance where he was responsible for providing legal counsel to the Commissioner’s Unit and overseeing OCI’s Legal Unit. At OCI he helped develop and implement the agency’s regulatory sandbox and led a cyber security working group. He assisted the Commissioner in drafting and issuing final orders and decisions, including review of...