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VT: Area Entrepreneurs Work Toward The Future Of The Hemp Industry

Ron Strider

Well-Known Member
It's been four years since those farmer activists first hoisted that flag over the Montpelier Statehouse.

That flag.

It made national news, mostly because of what it symbolized – Old Glory's proud stars and stripes were woven, not from cotton, but from hemp. And family farmers from the advocacy group Rural Vermont were raising it to celebrate then-Gov. Peter Shumlin's signature on a bill that paved the way for Vermonters to legally grow hemp as an agricultural commodity.

At the time the farmers predicted legalizing hemp crops would goose the state's agricultural economy by unlocking hemp-based food, hemp-based fiber, and hemp-based fuel products that could be sold at a tidy profit to an emerging market. A 2015 study from Washington State University found that the national market for hemp-based products was $581 million in 2013, and growing by double digits every year.

In 2013, the first year Vermont began allowing prospective hemp growers to register with the state for $25 per year, there were only eight registrants in the state. Now, the state is on pace to see eight registrants per county by the end of the year – as of last week, there were 95 people certified to grow 575 acres of hemp.

Today, Vermont is poised to make a similar decision about the legalization of recreational marijuana – since hemp was legalized, there have been 32 marijuana-related bills introduced into the Legislature, most of which sought to lessen or eliminate penalties against marijuana users. Earlier this year, Gov. Phil Scott vetoed a legalization bill that passed the Legislature, but more legislation is in the pipeline for the upcoming session. In early September, Scott formed a Marijuana Advisory Commission to study the impacts of legalization on public health and safety. The commission is expected to unveil recommendations on impairment testing, youth prevention programs, and substance abuse facilities by mid-January, and proposals for regulation of an adult revenue market by December 2018.

"I'm optimistic we can pass basic homegrown possession up to one ounce," said Monica Donovan, co-founder of another pro-legalization group, Heady Vermont. "I think we can get that in January."

Though hemp and marijuana come from the same species of plant, cannabis, industrial hemp contains only trace amounts (0.3 percent or less) of marijuana's most distinguishing feature – THC, or tetrahydrocannabinol, the chemical compound that gets humans high. Despite that critical difference, Vermont's fledgling hemp industry can in many ways be seen as a sort of trial balloon for what could – just a few years from now – be a much larger recreational marijuana market.

After all, the debate over whether to legalize marijuana is breaking along similar lines – as with hemp, opponents worry about potential conflicts with federal law, and encouraging the illicit use of illegal drugs. On the other side of the discussion, advocates tout the potential economic benefits for the state, and for small-scale farmers.

Market research suggests that $7 billion is already spent on legal marijuana each year nationally. And that doesn't account for what analysts think is a much larger black market for illegal weed sales, which the Rand Corporation estimated were between $125 million and $225 million in Vermont alone in 2014.

Vermont and New Hampshire are among the 33 states that currently allow for some form of legal hemp, according to the National Conference of State Legislatures. Under the 2014 Farm Bill signed into law by then-President Barack Obama, states may allow universities and state departments of agriculture to grow industrial hemp, but only for research purposes.

While Vermont allows for state-registered commercial hemp production, New Hampshire is more restrictive, allowing only institutions of higher education to cultivate hemp for research purposes, and specifying that research projects can last no longer than three years.

There's another reason to take a close look at the people who are now growing, buying and selling the towering hemp plants and their derivatives. Donovan said the same entrepreneurs who have tapped into hemp are best poised to pioneer an emerging marijuana market, should legalization happen.

"We've seen small businesses coming in to fill the space, and to be ready if things change," she said.

A few of the Upper Valley's most prominent "hemptrepreneur" are already busily bringing an odd mix of creative products into the marketplace, and they predict their operations will only grow in the years to come.

Luce Farm

Vermont's fledgling hemp industry is founded on people like Joe Pimentel, who's in the process of converting his Luce Farm in Stockbridge from crops of vegetables to crops of cannabis.

In many ways, the Pimentel family background is typical of many in the Upper Valley – when they were living in Massachusetts, Joe worked in construction, while his wife, Rebecca Pimentel, operated a small cosmetics retail store. Twelve years ago, they transitioned to running an organic vegetable farm; when they had kids, they decided to move to Vermont, which seemed more in line with their values.

But in 2016, this common Vermont story got a CBD-infused twist. The Pimentels took advantage of Vermont's hemp laws by partnering with some would-be hemp entrepreneurs to plant an experimental 100-plant patch in the Luce Farm greenhouse, with the Pimentels receiving half of the bounty of buds. As the plants grew, the Pimentels sought out research on the plant, the physical effects of CBD, extraction techniques and the markets.

"We did this eight-month crash course," he said. "We just fell in love with it."

CBDs are a cannabinoid, the chemical components that can be extracted from a cannabis plant and turned into salves and oils. Some research has linked CBD to certain health benefits, ranging from acne treatment to easing withdrawal symptoms, but the FDA hasn't come to any firm conclusions about the substance's efficacy, and has actively worked to prevent CBD companies from making unproven health claims.

As an extract of the cannabis plant, CBD remains on the Drug Enforcement Agency's list of Schedule I controlled substances, but many states have interpreted federal exceptions to that classification to mean that state-sanctioned CBD extracts are legal, according to an academic review of law published in the journal Epilepsy & Behavior earlier this year.

Pimentel says his own research has convinced him of both the health, and financial, value of hemp, and so they're in the process of a dramatic ramping up – this year, they raised 1,100 plants on about an acre and a half, and Pimentel says that next year, they'll harvest 5,000.

They want to put a family-friendly face on CBD products.

"We use it in our home, ourselves and our children. We want to normalize it a little bit more," he said. "We don't want to put it in vape cartridges or gummi bears. We want to make it more of a health thing."

CBD extracts seem to be leaving fiber behind as the increasingly dominant reason to grow hemp, according to Tim Schmalz, who oversees the Hemp Registry Program on behalf of the Vermont Agency of Agriculture, Food & Markets.

"I think the industry is maturing a little bit," Schmalz said. "Markets are developing. People are figuring out what they can do with the hemp that they grow."

After harvesting their cannabis, the Pimentel family hangs the plants in the barn to dry, and separates out the fibrous stalks from the buds. For each gallon-sized pail of hemp buds that he sends out for processing, he gets about a half of a quart-sized mason jar of extract, and a bill for between $300 and $400.

Pimentel said the family is in the process of opening a food processing facility in Bethel, so that they can maintain the highest standards of quality control while they combine their hemp extract with their products. Right now, they offer 6-ounce jars of honey infused with 360 mg of CBD for $45, while 2.3 ounces of their other product, organic coconut oil infused with 500 mg of CBD, runs $50. Pimentel also is partnering with Bridgewater-based Long Trail Brewing to make the state's first known batch of CBD-infused beer. They're still testing the product, he said.

"We want to say this beer has 5 percent alcohol and such-and-such an amount of CBD. We haven't gotten there exactly," he said.

But Pimentel said that, once they get the formula right it has the potential to absorb all the CBD he can make.

"We're kind of just riding the wave," he said.

Bugout Hemp Guitars

"There's a warmth," Jay Burstein, 42, of Randolph, said. "There's a tone and a volume and a punch."

He was talking about his creation: The hemp guitar.

After the small guitar company he was working for folded in 2015, the lifelong musician decided that he would put his tradesman skills to good use by building a guitar from hemp fibers. He's begun his own company – BugOut Hemp Guitars and Ukeleles – and developed a process that involves using a vacuum system to draw resin into a mold.

He custom builds them for "less than a thousand dollars" for musicians who want to be able to take a durable instrument with them on their travels.

Burstein said that he hasn't yet figured out how to scale up his operation, with each guitar taking weeks for him to make.

"I need a business guy," he said. "I'm a creative type. I'm just sort of learning how hashtags work."

He said he wanted to make hemp work because of what the plant symbolizes within the musical community.

"Hemp is anti-establishment. It's rock and roll. It's outlaw," he said. "I guess that appealed to me a little bit."

Burstein buys his hemp fiber from Colorado, on the cheap – a bale of hemp fiber costs just $12 a kilo, and a kilo can make multiple guitars.

With the hemp registry growing, he said he'd like to source a Vermont grower, but that he'd have to find a local processor prepared to take on the labor-intensive task of producing low-cost fiber, rather than high-value CBD.

"I would love to say 'Vermont-grown hemp' on my product," he said. "I'm sure by next year we'll figure it out."

Burstein said that, while he's not "a big marijuana guy" himself, he'd like to see the state legalize marijuana; he cited the tax revenues and the medical benefits of the plant.

"I think we're going to miss the boat if we don't do it soon," he said.

But Schmalz said legalization presents at least one potential stumbling block for the state's existing hemp industry.

"Will marijuana and hemp growers be able to play together, or are there going to be conflicts?" Schmalz asked. "I think there will probably be conflict."

Hemp growers use cannabis that is low enough in THC to come in under the legal 0.3 percent limit. Marijuana growers have done the opposite, tweaking their own genetic strains to achieve a variety of diverging psychoactive effects through the cultivation of high levels of THC. The problem arises once both hemp and marijuana growers occupy neighboring plots of land. A single male hemp plant could pollinate an entire field of marijuana, not only spoiling the carefully cultivated genetic strain, but also triggering those pollinated female plants to go to seed, rather than flowering.

"Wind drifted pollen may come from a hemp field a mile, two miles, away," Schmalz said. "If the conditions are right, your marijuana gets fertilized."

And a marijuana grower's crop could shoot pollen back across the line, which could push a hemp grower's harvest above the legal 0.3 percent limit, and lead to a hemp farmer being de-certified, and possibly facing legal action.

"I think the easier solution is to keep the marijuana growing operations inside where the pollen doesn't get to the marijuana," he said. "Beyond that, I don't know how to solve that problem."

Ropana

For Andrew Switz and Rachael Henne, high school sweethearts who have been dating since they graduated from a Connecticut high school in 2009, cannabis culture has been an integral part of their relationship.

On their dating anniversary, Switz got Henne a ring – a glass ring that functioned as a pipe. Just this Halloween, she crafted him a costume out of moss and other materials to turn him into a giant marijuana nugget. She uses medical marijuana to treat PTSD, and he uses it to treat chronic pain. For the couple, who today operate a CBD product company called Ropana from their home in Sharon, a cannabis-based career has been a lifelong dream.

"I went to school for horticulture," Switz said. "It was always my intention to work in the cannabis industry."

In the Twin States, he did a stint for the Vermont Patients Alliance, a dispensary, and then moved on to work as a medical marijuana consultant. She worked in a genetics lab at Dartmouth-Hitchcock Medical Center.

Their backgrounds have made them knowledgeable about the accepted science behind both marijuana and CBD. But they also go well beyond accepted science, into a range of spiritual beliefs about energy and vibrations that would sound familiar to those who witnessed the explosion of New Age thinking in the 1970s.

"Articles in scholarly journals say intention directly affects things we do, in terms of restructuring the molecules in water and stuff like that," he said.

Earlier this year, Switz and Henne debuted their first CBD-based product: Vermont Winter Cooling Salve, which they now sell in peppermint, lavender and patchouli varieties, with more on the way.

Consumers can get a small, blue-tinted jar of the stuff for about $10. Each jar contains a blend of cocoa butter, shea butter, beeswax and vitamin E, which they've infused with CBD. Sales have been so brisk at trade shows that Switz and Henne expanded their products to include vegan chocolate truffles, and a line of tinctures made of CBD-infused organic coconut oil.

Switz and Henne prefer zero-THC products, which they say they cannot buy locally. So once in a while, they get a package from Colorado – small packets of pharmaceutical grade CBD. Switz said it looks like a white powder, and a little goes a long way.

If recreational legalization brings large marijuana corporations into the Vermont market, they could conceivably flood shelves of other cannabis-derived products, including cheaper and flashier versions of Ropana's salves, chocolates and tinctures.

At Heady Vermont, Donovan said she hopes legislators strike a balance that will protect the existing family businesses in Vermont's growing industry.

"You're going to see some big growers come up," she said. "But with CBDs, it's a feisty group of little small businesses, and we hope that's going to stay a big sector."

Switz said he's not worried about competition from Big Marijuana.

"We're going to be a small artisanal mode, like craft beer," he said.

Fundamental shifts in a rapidly developing hemp market and the way Vermont regulates marijuana are driving every entrepreneur to make a series of binary choices – stick with hemp or shift to marijuana, grow small-scale or large-scale, focus on hemp fiber or hemp extract – but Switz says that the character of his company, and the spirit of Vermont, will guide them through those challenges. Each jar of salve they produce is infused not only with CBD, but with a spiritual marker.

"We bless our products with healing mantras," he said. To chant the mantra takes only 30 seconds, but Switz said it makes all the difference; he delivers five repetitions while stirring the mixture clockwise, and another five while stirring counter-clockwise.

"Two different directions," he said, "to balance the energy."



News Moderator: Ron Strider 420 MAGAZINE ®
Full Article: Valley News - Area Entrepreneurs Work Toward the Future of the Hemp Industry
Author: Matt Hongoltz-Hetling
Contact: Valley News - Contact the Newsroom - The News Source of New Hampshire's Upper Valley
Photo Credit: James M Patterson
Website: Valley News - The News Source of New Hampshire's Upper Valley
 
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