WAKONDA, S.D. — After leading the nation in hemp acreage harvested in 2024, South Dakota is taking a major step forward in establishing local processing infrastructure with a new facility opening in Wakonda this fall.

Dakota Hemp, a South Dakota-based company, is behind the development of the new hemp processing plant, which will serve as a critical piece of the state’s evolving hemp supply chain. Until now, many farmers have been forced to send their crops to Montana or Kansas for processing, delaying production timelines and raising costs.

The new plant, expected to be operational by early autumn, will significantly ease this logistical strain. With the capacity to process 3,000 acres of stalks from grain and fiber hemp, it marks a major advancement for in-state production capabilities.

“We’re not trying to outgrow, have the farmers outgrow the processors, and vice versa, we’re trying to build this up and as the processors grow, so then the final product manufacturers come too, looking for that material,” said John Peterson, owner of Dakota Hemp.

While hemp is commonly known for being used in CBD-based wellness products, it also has a surprising range of other applications.

“Some of the more popular items that we have are the pasta and the wood products, that’s usually what gets people to stop and do a double-take, that they didn’t know those types of items are made out of hemp,” Peterson added.

One of the most promising byproducts of the processing facility is hemp hurd, which can be used to produce Hempcrete — a sustainable building material gaining traction for residential construction. Once the facility begins separating the fiber and hurd from the stalks, local manufacturers will have access to raw materials for construction and consumer products.

“Because it’s made with the lime, it won’t mold, and it’s very fire resistant, we’re able to do demonstrations with our blow torch to show people how it is,” said Karl Lecher, Dakota Hemp’s Chief Operating Officer.

South Dakota farmers harvested 3,700 acres of hemp in 2024. With Dakota Hemp’s plant now able to process nearly 81% of that volume annually, the facility is expected to bring economic efficiency and market stability to the state’s hemp industry.

By streamlining processing and keeping business local, the new facility could also pave the way for future job growth, attract product manufacturers, and build momentum for South Dakota’s emerging hemp economy.

As Peterson noted, the goal is not just processing volume, but creating a self-sustaining ecosystem: one that begins with farmers and ends with a diverse range of hemp-based products fueling South Dakota’s innovation economy.

Originally reported by Grant Green in Dakota News Now.