HOPE FOR HEMP: Room to Grow

Margaret MacKenzie and Aaron Rydell of the Salt Creek Hemp Company outside of Collbran grow a number of strains of cherry hemp for the oil in the flowers from which medicinal oils are created. Hemp plants look exactly like marijuana plants, but must have less than .3 percent THC.



QUICKREAD

HOPE FOR HEMP

SUNDAY: Ryker Bou’s parents say CBD has extended — and improved — their child’s life, after the side effects of medications threatened it.
READ PART 1

MONDAY: Challenges facing those starting in the hemp industry make it not for the faint of heart.
READ PART 2

TODAY: Opportunities abound for entrepreneurs in the industry and we look at some projects on the horizon.

RELATED STORY:
Questions and answers about hemp, marijuana



In this three-day series, The Daily Sentinel is examining the emergence of hemp as a potential cash crop in western Colorado, the technical and legal challenges associated with growing and selling it and the medical benefits some say it offers.

While the beginnings of the hemp industry in Colorado are ever-changing and uncertain at times, others see that as a wide-open opportunity where the sky is the limit.

Sure, there’s a lack of processing facilities. The quality of hemp seed from other places is uncertain. And the market is volatile, with prices varying wildly and basically being whatever someone is willing to pay or receive from moment to moment.

But there are also opportunities. Big ones, and the excitement from those involved is palpable when they talk about building a foundation for hemp in western Colorado. The uncertainty doesn’t seem to be stopping people from entering the industry, as Montrose, Delta and Mesa counties have each seen exponential growth in the number of acres of hemp planted each year since the crop became legal to grow in 2014. Colorado itself is a leader in the hemp industry, with 8,988 acres of hemp grown in 2016, compared to 14,054 acres grown across the whole country.

The latest conversation topics center on a possible buyer for large quantities of hemp in Montrose County, forming a cooperative for growers and the continuing quest for the perfect hemp genetics.

BUILDING WITH HEMP

The hemp community is still buzzing after a meeting with the owner of a business called Hemp Adobe, operated by BioCorp US, which is relocating to Montrose with the help of the state’s Rural Jump-Start Program.

Hemp Adobe uses part of the hemp stalk for building materials, and CEO Kevin Hodge told approximately 150 attendees at a meeting earlier this month in Montrose that he wants to purchase everything they can grow instead of importing it from other places.

He pitched a proposal to attendees that would ramp up production in the area over the next three years to reach 50,000 acres of hemp. But there’s a catch to his proposal — he only wants to purchase a portion of the plant, and he doesn’t want to be involved in processing the hemp. He just wants to buy what he can use.

“I’m not going to process jack diddly,” he said.

Hodge’s business only needs what’s called the “hurd,” or the woody, inner core of the stalk, which amounts to about 10 percent of the plant. This leaves behind the long fibers that can be used for textiles or rope, and the leaves and flowers, which can be used for food products or extracted for oil among other things.

Hodge estimates farmers could net $1,200 per-acre profit just from the portion of the plant he wants to purchase.

Currently, he’s sourcing his hemp from other places from outside the U.S., including Canada and Thailand, but he’d rather buy local, and the agricultural potential in the area is one of the reasons he decided to relocate his business in western Colorado.

“I don’t need you, I want you,” he said.

Hodge wants the hemp community to form a cooperative for a production facility.

He sees a hemp cooperative providing not only his business with the inner stem of the plant for building materials, but also expanding into food products and markets typically dominated by timber and petroleum, including plastics, paints and epoxies.

Hodge said he is moving his business into a 15,000-square-foot space at the Montrose Airport Industrial Park for the facility, and estimates they will start manufacturing materials within nine months.

COOPERATIVE EFFORT

Hodge wants growers to form a cooperative for processing, to provide a steady stream of raw material for him to use for Hemp Adobe.

There have been discussions of using the old Louisiana-Pacific factory near Olathe on U.S. Highway 50 for a processing facility, according to Sandy Head, the executive director of the Montrose Economic Development Corp. The building was most recently occupied by American Pure LLC, a coffee company that made some upgrades to the facility, she said.

The building is about 70,000 square feet and is on a 40-acre parcel, and “everyone that’s in the hemp world that has toured it, drools over it,” she said. “But nobody needs the whole thing.”

Head cited the recent formation of the Colorado Hemp Industries Association, or COHIA, as a step in the right direction for those in the business to share information and expertise. The next step would be forming an actual cooperative, and while there are loosely formed relationships and partnerships in the community, an official cooperative has not yet been formed.

Don Coram, a Colorado state senator, is one of the founders of Paradox Ventures, a business formed in January 2016 on research and development with CBD strains of hemp in Naturita. They’re currently producing CBD oil and marketing the products under the Paradox Pride label.

Their group is working to locate a processing facility in the old elementary school in Nucla, Coram said. Paradox Ventures estimates it could cost between $8 million and $15 million to build a processing facility for fiber.

Paradox Ventures currently has 14,000 plants on roughly 10 acres in the Naturita area, Coram said, a far cry from its beginnings with 100 seeds in a bathtub. From those seeds, they kept 42 mother plants, and then cloned the 14,000 plants from that stock. The company also planted 10,000 plants in eastern Montrose County to supply the production facility.

Coram said his organization is interested in talks of forming a cooperative, but they’re moving forward with their own processing facility at this time.

“The conversation is alive,” said Head, noting that hemp growers in the region will be surveyed on their needs and interest soon.

RELIABLE GENETICS

The quest for cannabis plants that consistently and reliably produce less than 0.3 percent THC continues, as each season passes and growers learn what varieties of hemp perform well in Colorado’s high desert climate. Hemp can be propagated one of two ways — by seed or from cuttings from existing plants, called clones in the cannabis industry.

Hemp growers face a challenge in that the federal government will not regulate cannabis seed as it does other seeds through the U.S. Department of Agriculture, meaning there is no control for assuring quality as it does for other crops. The Colorado Department of Agriculture has experienced situations where hemp seed imported from Europe has produced poorly, with less than 25 percent of the seed germinating, according to Duane Sinning, the agency’s Industrial Hemp Program manager.

Colorado is one of a few states that do not require farmers to grow certain varieties of hemp. The state doesn’t sell the seed, though it has conducted trials on varieties and certified those that are successful to help farmers know what is generally reliable. It started the first certified hemp seed program in the U.S. in 2016.

So far, the state has certified three varieties from Sciavi Seeds of Kentucky and conditionally approved a variety from New West Genetics of Fort Collins. Six more varieties are being grown this year around the state through official research trials. The state agriculture department approves the certified seed through the Colorado Seed Growers Association’s Variety Review Board, which receives the results of the trials each year.

The lack of restriction on the varieties of hemp that can be grown, within the restraints of keeping THC levels at or below 0.3 percent, has created an environment for innovation, Sinning said. The industry is becoming more sophisticated, with some companies employing genetic engineering to locate specific genes that control THC levels and working to develop new types of hemp.

“We’ve said this industry will develop itself,” he said. “We’ve allowed the industry to succeed on its own and not tried to restrict their ability by requiring them to use this seed or that seed. As long as they stay under 0.3, I don’t care.”

Developing reliable genetics has been tricky for those in the industry, and it’s important to reduce wasted time and effort, as a crop that tests outside the law’s parameters for hemp cannot be sold, and if it has high enough THC levels, it can prompt a call to drug enforcement officials. This can result in criminal proceedings in severe cases or financial ruin in those who put their savings on the line and have nothing to show for their investment.

“Genetic purity is key to maintaining low THC levels,” said Rick Novak, director of seed programs for Colorado State University.

Novak said cannabis is a prolific pollinator and marijuana and hemp can cross-pollinate, since they’re the same species of plant. In fact, a distance of 16,150 feet is recommended between different varieties to maintain genetic purity. That’s more than 3 miles.

THC levels can also be affected by plant stress, watering habits and elevation. That means hemp that tests within parameters in Kentucky may not have the same results in Colorado at a higher altitude, Novak said.

Though it can take time to develop new seed that has proven genetics, the lack of reliability of other hemp varieties makes it a valuable investment and certified seed definitely has a niche in the market, Novak said.


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