South Dakota has ended its state-run industrial hemp program, shifting oversight of growers to the U.S. Division of Agriculture (USDA), in a transfer that provides a recent warning signal from the U.S. hemp sector.
The shift comes as acreage in South Dakota, the nation’s hemp chief, fell by 70% in 2025. The developments are notably alarming as a result of South Dakota was one of many few states that had leaned virtually solely into grain and fiber.
For growers, the change might imply decrease prices and fewer layers of oversight. However it’s also a stark sign that fiber and meals, hemp’s most promising markets, have an extended solution to go and main struggles forward.
$ unsustainable
The swap to USDA got here by way of Senate Invoice 39, signed this week, which was backed by the South Dakota Division of Agriculture and Pure Assets (DANR). State officers stated the hemp program was not financially sustainable and that shifting growers to the USDA would reduce prices for each the state and the trade.
In response to testimony from the DANR, charges from hemp farmers lined solely about 11% of program prices in 2025, with the remaining paid from the state’s normal fund. State officers stated the change ought to get rid of license charges for growers, take away state oversight of processors and save roughly $200,000 in taxpayer cash.
Fields fall 70%
South Dakota’s withdrawal follows a pointy contraction in hemp farming after robust acreage in 2024, when USDA knowledge confirmed 3,900 planted acres and three,700 harvested, making the state the largest grower within the nation. State officers early this 12 months stated hemp manufacturing in 2025 fell to 1,128 acres.
That reversal is particularly notable as a result of the state’s hemp sector was constructed primarily round grain and fiber reasonably than cannabinoids. Solely a tiny share of acreage ever went to flower in South Dakota, whereas most fields have been planted for meals and industrial makes use of that many within the sector have lengthy considered as hemp’s future staples.
Whereas the change strikes South Dakota hemp farming to federal oversight, it leaves legal guidelines on hemp-derived intoxicating merchandise as much as the state, which is more likely to ban them. Lawmakers this 12 months superior SB 61, a measure geared toward eliminating hemp-derived intoxicants akin to delta-8 THC and different artificial THC substances. It will additionally prohibit cannabinoids above 0.4 milligrams mixed whole THC per container. That legislation has but to go.
Different states
South Dakota is the third state to desert its industrial hemp plan after initially taking up that authority beneath the 2018 Farm Invoice. Wisconsin made the identical transfer in 2021, and Ohio ended its program with licenses that expired on the finish of 2025. Growers in each these states should now apply by way of the USDA. Michigan thought-about the same transfer in 2025, however its proposal to finish the state hemp program and ship growers to the USDA stays unfinished, and the Michigan Division of Agriculture and Rural Growth is accepting hemp grower registrations for 2026.
South Dakota has been a pacesetter within the U.S., however fields fell by 70% in 2025.
