Hemp Cultivation Lease Options

The passage of the December 2018 Farm Bill legalized production of hemp as an “agricultural commodity” and removed it from the list of controlled substances. Since hemp can only be grown by registered industrial hemp cultivators, the owners of a commercial farms have offered options to Magna LLC to cultivate a high potency industrial hemp crop on their fully irrigated crop circles. While we are very active in direct hemp farming operations, we see opportunities in leasing out our land and water, as we have done with our acreage in the San Luis Valley, Colorado.

Current Lease Opportunities

(3) -120 acre Irrigated pivot circles

(1) - 95 acre Irrigated pivot circles

(1) - 95 acre Irrigated pivot circle + 120 acre Irrigated pivot circle

(2) - 90 acre Irrigated pivot circles 

(1) - 60 acre Irrigated pivot circles

(1) - 272 acres - 4 irrigated pivot circles of various sizes on the same property. 2 quonset hut style buildings for storage. 

**Please contact us for pricing...

Magna LLC has lease options for almost every situation. 

In addition to providing highly competitive cash lease rates that include land and water rights for large scale hemp production, Magna LLC performs management activities on its leased lands (for example, maintaining irrigation pivots, tracking farm yields and efficiencies; and combating noxious weeds). Additionally, we have the right equipment get the job done. We are a technology driven company so we are always testing and researching new industry efficiencies. In 2020, we will be focusing on wet harvesting with some new equipment that strips the vegetation from the plant but leaves the stock standing in the field. Initial results have been great mainly because less cannabinoids are lost when hemp is harvested at higher moister levels. Can you imagine not having to harvest the stalks and large stems with your valuable biomass?  Magna LLC can provide the support you need, when you need it. Let's take the next step and talk about a business relationship. We offer the following business opportunities to qualified individuals and business entities:

Cash-Rent Lease

• The most common and most straightforward lease structure is a cash arrangement.  
• A tenant and a landowner agree on a set price for the lease. Cash lease rates are generally listed as per acre, although a flat fee could be utilized as well.  
• The benefit of a cash lease to a landowner is certainty of payment.
• The downside is inability to share in good years where yield, price, or both are higher than normal.  The benefit of a cash lease to a tenant is certainty of cost, 
• The downside is that the cost must be paid, regardless of how the crop or the markets fare.

Crop Share Leases

• This type of agreement is seen more commonly in row crop-type farm leases 
• The landowner and a tenant share in certain costs and share in the revenue made from selling the crop in an agreed upon percentage.  
• Landowners share in fertilizer, chemicals, and irrigation. Landowners and tenants can include whatever costs they can agree on.
• The benefit for a landowner is the opportunity to share in the upside in a good year. 
• The downside is the risk of receiving far less payment in a bad year than a cash lease might have generated. 
• For the tenant, a crop share lease allows payment to be based upon the revenue generated and offers some assistance in paying for certain inputs.
• Could result in greater lease payment than would have been owed under a cash agreement.

Hybrid Leases 

• Combines attributes of both the cash and crop share lease. Can be drafted any number of ways.
• A flex/hybrid lease will set a base price that the tenant will pay, and then flex up or down from that base price based upon an external factor, usually either yield or price. 
• Landowners may benefit from a flex/hybrid lease from the standpoint that it allows them the assurance of at least the set amount, but also allows them to share in the potential upside of a good price or yield.  
• The downside for a landowner is that lower total lease payment may be received.  
• For the tenant it does provide some certainty with regard to the amount he or she will owe, but does allow a potential decrease in a year with low market prices or yields. 
• The downside for a tenant is the potential increased rental payment owed if the flex is triggered.

*Disclaimer: This guide does not take the place of independent legal advice, and it is not intended to be used as legal advice.