(Editor’s note: This story is part of a recurring series of commentaries from professionals connected to the hemp industry. Andrea Steel is co-chairwoman of the Cannabis Business Law Group at Coats Rose, a Houston law firm.)
By deeming hemp an agricultural commodity and removing it from the definition of a controlled substance, the 2018 Farm Bill opened the doors for hemp businesses to gain access to government funding sources at all levels – federal, state and local.
Andrea Steel
For hemp businesses operating in compliance with U.S. Department of Agriculture-approved plans, this means there are a wealth of resources, large and small, that can easily fly under the radar.
This is especially true for those who are used to operating in the federally illicit but state-legal marijuana space and are now operating in the legal hemp space. Do not let past prohibition prevent the recognition of possibilities that may now be within reach.
For example, the USDA recently announced two grant opportunities for cooperatives for projects in rural areas.
For context, a co-op is generally an organization owned, operated and democratically controlled by its members. Economic benefits are equitably distributed among the members proportionately based on participation and use.
Co-ops are seen in various sectors including housing, healthcare and finance, and are common in agriculture. The cooperative structure allows its members to join forces for more economic leverage.
Interestingly, both grant announcements made specific reference to hemp-related projects.
While the hemp provisions themselves are minimal and require a valid producer license issued under a USDA-approved plan, the mere fact that the funding notices expressly call out hemp-related projects at all is notable.
These USDA grants have been around for at least 10 years, so the new hemp references mean these federal agencies are anticipating hemp industry participants will receive awards. You can be among the first!
Here are brief descriptions of the two point-based highly competitive grants, followed by some tips on how to make your application stand out. Awards will be funded in highest ranking order until the money runs out for each.
Socially Disadvantaged Groups Grant
The Notice of Funding Availability (“NOFA”) was published June 25, and the deadline to apply is Aug. 10.
This grant has a maximum award amount of $175,000, and is eligible only to applicants who are:
- Co-ops.
- Groups of co-ops.
- Cooperative development centers.
Also, they must be governed by a majority of individuals who are members of Socially Disadvantaged Groups and providing technical assistance to Socially Disadvantaged Groups in rural areas.
A Socially Disadvantaged Group is a “group whose members have been subjected to racial, ethnic or gender prejudice because of their identity as members of a group without regard to their individual qualities.”
The grant funds can be used toward technical-assistance services, which include soft costs such as feasibility studies, business and other strategic planning, and leadership training.
There are 105 total points available in six scoring categories, with a focus on the technical assistance being provided, the feasibility of the work plan and budget, and the level of experience and education to be able to carry out a successful project.
Rural Cooperative Development Grant Program
This NOFA was published July 2, and the deadline to apply is Aug. 3.
This grant has a maximum award amount of $200,000 and has a 25% fund-matching requirement (reduced to 5% for Native American tribally controlled colleges and universities with land-grant status under a 1994 Act of Congress).
It is eligible only to applicants who are nonprofit corporations or institutions of higher education. The grants can be used only for funding the creation, expansion or continued operation of a cooperative development center that serves businesses and individuals in rural areas.
Funds can be used for items such as:
- Technical assistance.
- Data collection.
- Feasibility studies.
- Training.
There are 110 total points available in 11 equally weighted scoring categories.
These opportunities are expected to be greatly over-subscribed and I estimate about 50 total grants being awarded between both of them. With such a high rate of competition, how can your application stand out?
Tips for success
First, read the web page information, funding notices and all accompanying materials, then read them again. Then again.
Make sure you thoroughly understand not only the substantive requirements but also the technical ones (font size, page limitations, etc.), and adhere to them.
There are key words to make note of and specific concepts that they outright tell you will garner higher scores. Focus on framing your project in a way that will score the highest points in each category.
Second, go beyond the funding announcement and get familiar with the 2017 Interagency Task Force on Agriculture and Rural Prosperity Report. Take note of all the issues identified and the directives and calls-to-action set forth. Describe your project in a way that shows it accomplishes at least one of the following goals:
- Achieving e-Connectivity for rural America.
- Developing rural economy.
- Harnessing technological innovation.
- Supporting rural workforce.
- Improving quality of life.
Third, in the narrative descriptions, be diligent about answering the questions that are asked, not the question you want to answer.
The evaluator wants confidence that the proposed project is feasible and that the applicant team can execute.
Demonstrate the ability to deliver results in every response and show your track record on past projects.
Be clear and succinct. To do this, take a step back from your own project, read the NOFA again, then come back to your proposal but this time do so from the perspective of a scorer.
Finally, allow yourself enough time to proofread and edit prior to submission. This means allow others to assist in the editing process and be sure to take a breather of one to two days so you can come back with fresh eyes. Give the draft to someone not associated with the project to get feedback from the perspective of a first-time reader. This allows you to get a fresh take on any gaps to fill in, concepts to clarify and overall flow.
These applications are due within weeks – but keep your eyes open for additional federal opportunities as well as those that are available at the city, county and state level.
Andrea Steel can be reached at [email protected]
