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An economy in transition

While FDA Warns CBD Companies, Ohio Valley Industry Continues To Grow



Photo: Glynis Board/Ohio Valley ReSource

This article was originally published by Ohio Valley ReSource.

The U.S. Food and Drug Administration sent out 15 letters last week warning some companies that sell cannabidiol, or CBD, about making unfounded medical claims regarding the effects of the hemp-derived compound. Many users claim CBD has a wide range of medicinal benefits but there is little evidence. Despite this warning, the burgeoning industry in the Ohio Valley continues to boom.

Daddy Burt Hemp Company in Lexington, Kentucky, was the only Ohio Valley business to receive a warning letter. The FDA said the company is making unfounded claims including that CBD could help with arthritis, schizophrenia and children with autism. 

Because of those claims, the company was therefore advertising their products as “unapproved new drugs” that violate FDA regulations. The only CBD-based drug approved by the FDA is Epidolex, used to treat rare, severe forms of epilepsy. Representatives with Daddy Burt Hemp Company did not respond to requests for comment. 

The FDA said in a statement that some of the available data “raise serious concerns about potential harm from CBD.” Those include potential liver injury, interactions with other drugs, drowsiness, diarrhea and changes in mood. 

The FDA warned that studies in animals have shown that CBD can interfere with the development and function of testes and sperm and “decrease testosterone levels and impair sexual behavior in males.” 

One regional industry leader called the FDA’s concerns regarding the safety of CBD “overblown.”

“They issued what we believe are so very overblown claims about what would happen if you would take enormous amounts of CBD,” said Jonathan Miller, former Kentucky state treasurer and general counsel for the U.S Hemp Roundtable, an industry group. “They mentioned liver disease, sterility…the types of things where there are indications in very, very large doses in animals. There’s certainly no human experience to that.”

Miller said CBD companies should not make medical claims about their products given continuing scientific uncertainty surrounding CBD’s effects. But Miller said the FDA is also dragging its feet on rules that would give clarity to businesses about how CBD can be sold. 

Hemp advocates, including Miller, want CBD to be regulated as a dietary supplement, which would allow the compound to be legally added to food products. Because CBD is currently an FDA-approved drug, it currently can’t be added to food products. Miller said he believes it will take Congressional action to allow for this change.

The hemp industry in the Ohio Valley continues to boom. The number of hemp acres farmers planted in Kentucky and West Virginia quadrupled in 2019 to more than 26,000 total, compared to the previous year. Kentucky is also held its first “hemp summit” Wednesday, December 4 in Louisville.

Sean Southard is a spokesperson for the Kentucky Department of Agriculture, which is hosting the summit. He said because of the economic potential of having CBD marketed as something like a dietary supplement, he hopes the FDA will regulate the cannabis compound so that it will benefit farmers. 

“I think generally, a lot of folks in the industry are anxious about what the FDA is going to do,” Southard said. “We understand the public health component, but we want to make sure we do our job in the Department of Agriculture in advocating for our farmers.”

Barry-Lee Tace, who helps run Cap City CBD Plus in Charleston, West Virginia, said he welcomes FDA regulation to provide clarity for his small business. He believes CBD has the potential for numerous medicinal benefits, but it may take time for clinical studies that would allow companies to make claims about their products.

“I think the problem with CBD is its such a wide spectrum of aspects that it does that I’ve experienced in my life,” Tace said. “It can be a part of the problem. It’s just a lot there.”

An economy in transition

Why Worker Training Programs Alone Won’t Save Coal Country



Photo: Rebecca Kiger

This article was originally published by Ohio Valley ReSource.

Bobby Bowman mined coal in West Virginia for 12 years before his employer shut down. 

“I don’t think that mine will ever open again,” he said. 

Bowman lives in Welch, in the south of the state, where he worked at the Pinnacle Mine, which shut down almost exactly one year ago, putting him and about 400 others out of work. After waiting a month in hopes someone would buy Pinnacle and the mine would reopen, Bowman decided to do a four-week training program offered by the United Mine Workers Career Center. He enjoyed it and earned a certification in heavy equipment operation. But when he came back home, he struggled to find a job in the field. So Bowman took matters into his own hands. 

“So I sent myself through truck driving school and that’s what I’m doing today,” he said. 

Bowman is not alone. In the midst of the region’s declining industries, politicians are betting big on job training, with millions directed at those who lost jobs in coal mining and power plants. 

The U.S. Department of Labor recently announced nearly $5 million for worker training programs in Appalachia. It’s the latest influx of funding aimed at blunting the job losses in the region’s coal sector. 

Recently Sen. Mitch McConnell of Kentucky announced more than $2 million in funding from the National Dislocated Workers fund, and Sen. Joe Manchin of West Virginia announced more than $1 million in funding from the same program. 

But critics say worker training alone is no solution and that such retraining programs have a poor record in actually connecting dislocated workers with local employment that pays a comparative wage.

“There are great examples of ones here in Appalachia who have trained people for jobs then they couldn’t find employment,” Ted Boettner said. The executive director of the left-leaning West Virginia Center on Budget and Policy, Boettner said job training hasn’t made up for the number of jobs lost by the coal industry. He and other economists argue that a more broad-based approach to jobs, public investment and wages will be necessary for coal country. 

Wage Gap

“You have to realize a lot of this is in the backdrop of 40 years of wage stagnation across this country and especially men in West Virginia,” Boettner said.

He said job training needs to be connected to employment that pays well because it’s difficult to go from a $75,000 a year coal mining job to one that pays $12 or $15 an hour. Boettner points to areas of opportunity, such as Appalachia’s needs for mine reclamation work which could also provide jobs for coal miners similar to the work they’ve already done. 

“We have $4 to $5 billion in mine site reclamation that needs to happen,” he said. “That’s enough jobs, that’s thousands of jobs, and billions of dollars of investment right there.”

Stream restoration work in progress on an old mining site in West Virginia. Photo: Courtesy CVI

Josh Benton is deputy secretary of the Education and Workforce Development Cabinet in Kentucky, where miners have been hurt by recent coal bankruptcies. Benton said the state has had some success retraining people to work in the healthcare industry. But the real challenge is finding jobs where that displaced worker lives. 

“The challenge that we face is not necessarily are the training programs effective? It is, are there other industries, for those displaced workers to go to work,” he said.  

Benton said the jobs that have been created in technology or healthcare don’t make up for the ones lost in the energy sector over the last 10 years. Wages are another concern. He said it’s a tight labor market and he tries to communicate that to employers who are looking for skilled workers, but offering low wages. 

“If a manufacturer, for example, is paying an entry-level wage of $11.50 an hour, you know, if we’re aware of that, we can say that the average entry-level wage for manufacturing across the state is really $14 an hour,” he said. “So, it’s not surprising that you’re struggling to find someone because you’re paying below market value.”

Credit: Alexandra Kanik/Ohio Valley ReSource

Political Appeal

Gordon Lafer is a professor at the University of Oregon, a research associate at the Economic Policy Institute, and author of “The Job Training Charade.” Lafer argues that job training pushes a false narrative that employers aren’t hiring people because they can’t find workers with the right skills. 

“I think that job training keeps being promoted because it solves a political problem both for elected officials and for employers, but it doesn’t do anything for the economics,” he said.   

Lafer said the most important thing to understand about job training programs is that they don’t create new jobs. However, he argues, those programs do create a convenient narrative for politicians on both sides of the aisle.

“Job training is one of the favorite things of both Democrats and Republicans because it’s cheap, it’s symbolic,” he said. “It kind of places the blame on workers instead of employers because it suggests only if you had the right skills or the right work ethic or something then you wouldn’t be in the trouble you’re in.”

Lafer said the employment picture in the Ohio Valley is especially important because of its connection to climate change. He said talk of a “Green New Deal” and a move away from polluting industries should include a just transition for those who would lose jobs.

“It’s just not in good faith to say, one group of people is going to pay the price for saving the planet,” he said. “Either we have to say, we’re going to take care of people from age, whatever they are when they lose their jobs to when they would retire. Or there have to be other jobs that are real jobs.”

Lafer said he’s heard this public policy touted as a solution for years, but it isn’t creating employment opportunities as advertised. 

“You could take on every argument, bring all the statistics and show why it doesn’t make sense. As a policy, job training feels like the undead to me,” he said. “Like you can drive a stake through its heart and it keeps coming back up.” 

Different Approach

Lafer said a better approach is to train people and invest in the industries that can’t move to a different country with cheaper labor once they get to a scale where they need more employees. Some of those industries include healthcare, construction, education and tourism. 

Economist Ted Boettner said public investments in infrastructure, including expanded broadband, could help create a stable economy that works for everyone. 

“Have we upgraded our antiquated grid? That’s thousands and thousands of jobs in West Virginia if we just upgrade the grid,” he said. 

As automation continues to grow, and the coal industry declines, more people will be displaced. The challenge is training those workers for jobs that pay well and aren’t likely to be outsourced or automated. 

Based at WKYU in Bowling Green, KY, Becca Schimmel covers economy and infrastructure.

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An economy in transition

Meet The Coal Town Betting Big On Outdoor Recreation



Norton City Manager Fred Ramey poses at Flag Rock Recreation Area. Photo: Brittany Patterson/Ohio Valley ReSource

Standing on the breezy outlook at Flag Rock Recreation Area, Norton City Manager Fred Ramey is taking in the panoramic view of downtown Norton, Virginia. The brick building-lined streets are framed by the verdant, rolling Appalachian mountains. Jagged, brown scars from mountaintop mining operations can be seen in the distance, reminders of the region’s history of coal production.

“It’s a great overlook of the city, and people really are surprised when they get up here at the view,” he says. “It’s truly beautiful, and it’s unique. It’s something that we have that not everyone else has.”

This view — and Norton’s abundance of nature and outdoor recreation opportunities — are what Ramey and others here are hoping will be the next chapter in the region’s history.

The first chapter was coal.

Norton was named in the 1890s after the president of the Louisville and Nashville Railroad. The community of about 4,000 sits in Wise County, which borders eastern Kentucky. Coal has been mined in these mountains for more than 140 years.

But since 2008, coal production has fallen by about 50 percent in Virginia. The trends look similar across the Ohio Valley. Over the last decade, coal production decreased more than 65 percent in Kentucky and Ohio, and decreased roughly 40 percent in West Virginia.

Credit: Alexandra Kanik/Ohio Valley ReSource

“In a certain way, our community has found itself at another intersection due to the loss of coal,” Ramey said. “And that’s when we had to really start thinking differently.”

Norton, like many regional communities, began looking at how to diversify its coal-based economy. One resource it has in abundance is nature.

Recreation Opportunities

The city is located near Jefferson National Forest and Stone Mountain. Its peak, High Knob, is the wettest area in Virginia and the area is rich in biodiversity. For example, more than 20 species of salamander are known to live in the region.

Credit: Alexandra Kanik/Ohio Valley ReSource

In the 1970s, Norton began developing the Flag Rock Recreation Area, a 1,000-acre park a few miles from downtown. Norton ramped up those efforts more recently and the park is a central piece of the city’s plan to reorient its economy to outdoor recreation. New campgrounds and hiking trails have been built. A visitor’s center that will be easily accessible from downtown is in the works. 

The city has also built eight miles of mountain bike trails, with more in development.

“When you have mountain bikers come to your to your town, they’re going to come out of the woods and come down and frequent your restaurants,” Shayne Fields said. He’s trail coordinator for Norton. “If we get enough trails here then they’re going to come and stay multiple days. So, you’ll have patronage at your restaurants, your hotels, any little shops you have in town.”

New bike and hiking trails at Flag Rock Recreation Area in Norton, Va. Credit: Brittany Patterson/Ohio Valley ReSource

Fields would know. An avid cyclist himself, he and his friends have traveled around the country in search of good mountain biking.

“Normally, when we go someplace, we come out of the woods hungry,” he said. “And the first thing you want to do is go find some really good fatty food and a craft beer somewhere.”

Fields grew up in Norton. He can remember the heyday of coal and has seen the impact its decline has had on the region. Wise County is losing population. About 23 percent of its residents live under the poverty line and the region is often considered ground zero for the opioid epidemic.

Recreation isn’t a silver bullet, Fields said, but it could be a key part of the solution.

“If we want to get an industry here — something other than the coal industry, you know, since it’s probably not coming back — we’re going to have to provide some kind of environment here that’s going to make those young working people want to stay here,” he said. “If we’ve got a good recreational economy-based setup here, we’ll have venues for people to come and play.”

Transition Challenges

Researchers who study economic transitions in coal-dependent communities say diversification is not easy. Many of these communities are located in rural areas, isolated from cities and lacking their amenities. In some cases, political leaders cling to the idea of a coal comeback, which stalls action.

“The biggest problem is the loss of employment, particularly of high wage jobs,” said Mark Haggerty, with the Bozeman, Montana-based nonprofit research group Headwaters Economics. “And just as important is the loss of revenue that supports schools and libraries and local services that keep these communities vibrant and attractive places.”

Haggerty has been studying coal community transitions for a decade and said several communities have had success making the transition from mining to outdoor recreation. He pointed to Gallup, New Mexico, a former hard rock mining community, which has now designated itself “The Adventure Capital of New Mexico.” Due to its proximity to the New River Gorge and world-class river rafting, Fayetteville, West Virginia, has boomed in recent years.

Norton, Virginia, has launched a “Get Outside” campaign showcasing its natural resources. Photo: Brittany Patterson/Ohio Valley ReSource

Recreation can be a tool, and a powerful one for coal-dependent communities seeking to diversify their economies, but shouldn’t be the end goal, Haggerty said.

“Recreation is really a means to an end,” he said. “So what a recreation strategy does for you is it makes your community more attractive, and it has to be set within a broader economic development strategy that includes making sure you have broadband connectivity, making sure you have good schools and healthcare in place and other kinds of cultural amenities.”

The cost of doing business in coal-dependent communities can also be higher due to the legacy costs left by the coal industry, said Chelsea Barnes, the new economy program manager for the environmental group, Appalachian Voices.

“There are safety hazards or health hazards, or they’re lands that are just not ready for a new business to come and build,” she said. “And we have to make sure that the land that people are visiting is safe, and the water they’re drinking is safe, before you invite large crowds of people to come and visit.”

Federal Role

Norton City Manager Ramey said the city is clear-eyed about the limitations of its budding outdoor recreation industry. In addition to questions about mine cleanup, some have expressed concerns over the wages of tourism-related jobs — selling hiking gear or serving beer often pays less than the mining jobs of the past.

“We’re not saying that tourism is going to be our answer, but we believe it can be part of the solution,” he said. “For a small community to have this kind of asset, you know, is a phenomenal opportunity for us, and it has to play into the discussion as we discuss our community’s future.”

On the other side of town, Norton is engaged in another economic diversification effort. With a federal Abandoned Mine Land Pilot Program grant, the city is converting a 200-acre, vacant surface coal mine into an industrial park. Ramey said they hope the space will attract manufacturing and technology companies. University of Virginia’s College at Wise is nearby, providing an educated workforce. Once completed, the project is expected to create 63 jobs.

Without federal investment, Ramey said, the city’s efforts to diversify would be greatly hampered.

“Without those types of opportunities, the hole we would be digging ourselves out of would become so much deeper,” he said. “It acts as a lifeline to a certain extent having resources, not just the financial resources, but the people resources that these agencies provide, to come in and help.”

The Woodbooger Effect

Norton has also held help from an unlikely source. In 2011, Animal Planet filmed an episode of its program “Finding Bigfoot” in southwest Virginia.

A local legend about a bigfoot-style creature, dubbed the “Woodbooger,” got national exposure.

“No one even knew they had been here,” Ramey said. Soon, tourists in search of the “Woodbooger” were flocking to the area. Norton leaned in. In 2014, the city declared Flag Rock Recreation Area a “Woodbooger Sanctuary.” Local businesses pitched in to buy a larger-than-life Woodbooger statue. The local hardware store downtown does a steady business selling t-shirts with the hairy creature’s likeness.

The Woodbooger statue in the Flag Rock Recreation Area in Norton, Va. Photo: Brittany Patterson/Ohio Valley ReSource

Woodbooger Festival in October draws hundreds of visitors.

It’s hard to measure if the region’s nascent efforts to boost tourism are working yet. But Ramey points to lots of anecdotal evidence, including multiple trail races that have sprung up in recent years.

On a recent visit to the top of the High Knob Observation Tower, Ramey turns in a slow circle pointing to Virginia’s neighbors. Four states are visible on a clear day from this perch, 4,200 feet in elevation.

“West Virginia would be that way,” he says. “Mount Rogers, the highest point in Virginia, is that way. Tennessee and North Carolina is that direction And of course Kentucky over there.”

Down in the parking lot, Ramey smiles.

“Interesting fact, at Flag Rock, we had two cars there from North Carolina, and at the tower, we have two vehicles here from Florida,” he says. “So, I would say that’s a sign that the tourism efforts are paying off.”

This article was originally published by West Virginia Public Broadcasting.

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An economy in transition

New Economic Data Show Appalachia’s Struggles Amid Coal’s Decline



Coal cars fill a rail yard in Williamson , W.Va., Friday, Nov. 11, 2016. The hard-eyed view along the Tug Fork River in coal country during the 2016 election, when this photo was taken, was that Donald Trump has to prove he'll help Appalachian mining like he promised, but recent economic data shows the industry is still struggling. Photo: Steve Helber/AP Photo

This article was originally published by Ohio Valley ReSource.

An annual report from the Appalachian Regional Commission shows that while Appalachia is seeing some economic improvement, the heart of the region and its coal-producing communities are still struggling. Several counties in the Ohio Valley are moving in a negative direction in this year’s report. 

The ARC report evaluates the Appalachian region using county-level data on unemployment, per capita market income, and poverty. Counties are rated on a scale with five tiers. At the low end are those “economically distressed,” or those ranking among the worst 10 percent of county economies in the country. At the high end is “attainment,” for those with thriving economies on par with the nation’s top performing places. In between are counties labeled “at risk,” “transitional” or “competitive.”

Ten counties in Kentucky, Ohio and West Virginia are moving in a negative direction. Those are: Rowan Co., Kentucky; Ashtabula, Athens, Coshocton, and Guernsey Counties, Ohio: and Nicholas, Pleasants, and Wirt Counties in West Virginia. 

Just four counties in the Ohio Valley are moving in a positive direction: Cumberland and Garrard Counties, Kentucky; and Hardy and Summers Counties in West Virginia. 

ARC data on economic status of Appalachian counties. Source: ARC

The ARC authors point out that many of the places moving in a negative direction or stuck in the lowest categories are those affected by the downturn in the coal industry. 

“Parts of the Appalachian region face significant economic challenges compared to the rest of the country,” ARC Federal Co-Chair Tim Thomas said in a statement. “ARC is seeking to ensure awareness of these challenges, and to inform policymakers at all levels.” 

Athens County, Ohio, is among those counties that had a negative change and is now in “distressed” status. Jack Frech is an advocate on poverty in the area who worked more than three decades in Athens County’s welfare office.  

He said that wage stagnation, coupled with the “evisceration” of social safety nets, is creating a larger class of working poor. In a “gig” economy with job growth driven by the lower-paying service sector, the nation’s low unemployment rate can be deceptive. 

“People will take any job they can get,” he said. “Which gives us the impression we are doing well, when in fact most of these new jobs do not provide a living wage. Many of them are not even lifting people above the poverty level.” 

ARC spokesperson Wendy Wasserman said the data add context on how the region is doing, and help to determine where investment is needed. 

“The reason we continue to do this is for our investments,” she said. “We do it to help us map out strategic investments in the region.” 

Wasserman said the color-coded map showing different levels of economic status looks like a bullseye of distress over central Appalachia. But it’s slowly been shrinking over time.   

The coming fiscal year will have 80 designated “distressed” counties in Appalachia, the lowest such number since 2008.

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