Denver Riggleman was the congressman responsible for introducing the new Hemp Opportunity Zone Act to the House of Representatives.
The focus of the program is to give tax incentives to farmers growing hemp in areas that are scarce in opportunity. It would expand the current Opportunity Zones program to include hemp-based businesses.
Under the Act, the Governor of each state is allowed to designate opportunity zones. Each zone is a designated low-income area that has clear signs of being economically stressed. The total area of these zones can’t exceed 5% of the total area of the state and the area must be approved by the Treasury department. The hope would be for the act to allow investors to take more risks in these struggling places.
“The Hemp Opportunity Zone Act is a huge win for farmers in the 5th District. Hemp farming is a new and thriving industry,” Riggleman told the press. “By providing these tax incentives hemp growers in Virginia and the 5th District are primed to lead based on their historic production of tobacco.”
Cannabis businesses have previously been excluded from opportunity zones because of the potential conflict between state and federal laws. The act would also give farmers a start-up tax credit of 10% of the rent paid for land use, or 15% of crop-share rent. Only farmers with less than $25 million in gross income from the previous year would be eligible.
There would also be provisions for a small hemp farmer credit that would give a 30% tax credit of the hemp farming property placed in service for businesses with less than $250,000 on gross receipts for the previous year.
Riggleman is optimistic about what this act would do for his home state of Virginia, which he believes would thrive with a little aid because of the large amounts of tobacco the region historically produced.