Now, let’s face it, chum. I’m not leaving till I sell you something! Now, what’ll it be? Just name it!
—DAFFY DUCK, The Stupor Salesman (1948)
With soil prepared and permit acquired, now we’re ready to sketch the genetics options for the farmer-entrepreneur. What should you be looking for as you source your seed? The answer is deceptively simple: Grow for what you want to harvest. Cherry tomato seeds are different from heirloom Roma seeds. Similarly, there is a significant difference between genetics intended for just CBD (and other cannabinoids residing in the flower) and genetics intended for nearly any other purpose. Regardless, advises master breeder Edgar Winters, “look for someone who has provided good genetics in the past, who has a COA and is a permitted farmer in his state.”
To that I would add: Examine the cultivar’s cannabinoid test results and germination rate carefully. (The latter should be north of 85 percent.) If the seller can’t provide both of these forms (COA with cannabinoid test results and germination rate results), I wouldn’t buy the seed. I also suggest visiting the source farm, so you can actually look at seeds, plants, and the overall operation. Is it clean? Organic?
Third, shop early: November is much better than March. By spring, everyone is busy, many breeders have run out of seed, prices are usually higher, and few providers have time for the many questions you’re wise to ask. And finally, ask for the kind of “right of replication” form that we discussed in chapter 3. Own your genetics.
Some states issue specific seed-provider permits in addition to cultivation permits. (Hey, bureaucratic budgets need holiday bonuses too.) If the state in which you’re sourcing seeds has such a permit, you might ask to see your putative provider’s.
Genetic sourcing, especially CBD genetic sourcing, is a massive caveat emptor situation as of this writing. Not for me, since I am my seed provider or I know my provider personally. But nearly everyone who comes to me asking about genetics, CBD genetics in particular, is a refugee from a sketchy seed situation. In other words, I get a fair number of emails that start with, “Help! I just got burned on bunk seed.”
Here’s one that just came in from the Empire State:
Hello Doug,
We are searching for some hemp seed and thought you would be a good person to reach out to. We grow organic hemp along with other crops in upstate New York. We have a bag of seed that we just purchased and it came loaded with Indian meal moth and it looks like the bag is mostly shot.
Kind Regards,
KM
Head Grower
But now you’ve done your homework, you’ve found your reputable provider, and you’re on a farm visit. How do you buy in an informed way? Start by examining the seed closely. This is not a hard-and-fast rule, but generally speaking, CBD seeds tend to be smaller and seeds for other purposes to be fatter. But although I’ve seen some monster seeds, even most of the bigger varieties aren’t much larger than a BB.
Edgar seeks larger, bulbous seeds in varieties that are intended for food. “Look at these fat ones, bursting with oil and meaty hearts,” he told me not too long ago as we pored over a Spanish cultivar in his greenhouse.
There’s considerable variety in how the walnut-shaped hemp shells look on the outside; some are tiger-striped and some a solid cream color. I’ve harvested seeds that were downright purple. But a robust seed generally cannot be cracked between your fingertips. At least it should be very difficult. So on your farm visit, lay down a five-dollar bill and ask the breeder if you can squeeze a few.
Once you’ve decided what kind of harvest you’re aiming for and you’re ready to buy, it’s time to start thinking about how much to plant. Our “tri-crop” dioecious Samurai cultivar (tri-crop = the Big Three of seed, flower, and fiber, plus, when applicable for a project, phytoremediation) has been planted in seven states as of 2019, at several different planting densities. I’d say we get best results from about 15 pounds of seed per acre, more if fiber is the primary application. (Higher-density planting produces tighter, straighter plants, which are easier to process for fiber applications.)
We’ve also planted as low as eight pounds per acre, which maximizes seed and flower production by giving the plants the room to branch out and reach for the sun. But this wider plant spacing (15-inch bases between plants, center to center) means the crop is more difficult to harvest via combine. That’s because rather than plants, you get hulking 10-foot trees like something out of Little Shop of Horrors.
Those looking to grow for CBD (or other exclusively flower-based applications), have several options: mixed-gender seed, feminized seed, and clones. These all have one shared goal in common: an all-female crop. Her flower is your harvest. Though I welcome fertilization of the flowers in my product, most farmers at this peak gold rush moment don’t. In 2018, four out of five US hemp farmers were trying to maximize one cannabinoid: CBD. Fertilization of the female flower can lower that CBD level, and thus the value of a wholesale crop. So if you’re going the flower-only route and start with seed, you can either purchase seed for which you pull males, or shell out for purportedly feminized seeds.1
Flower cultivators can also annually purchase clones, which are genetically identical clippings from mother plants.2 Or they can buy mother plants, from whose branches they can repeatedly clip their own clones. They stick the baby clippings, or “plugs,” into some form of soil or growing medium (many folks use Rockwool) until their roots establish and they grow a few inches. If you want to use goop that purports to stimulate root growth, please be sure it’s OMRI-compliant, so your crop can qualify for organic certification.3
When the plugs have stabilized, they can be transferred to the field. Starting seeds or clones in greenhouses allows outdoor farmers in cooler climates to add a few extra weeks to the growing season by transferring already-sprouted seedlings when the last frost has passed. But a frequent rookie faux pas is transferring the plants immediately outside without acclimating them for a few days with increased outside exposure each day. Rounding out your starting-point options, “tissue culture” is a high-tech variety of cloning done under sterile conditions that is having something of a moment as of this writing. None of these cloning options are my jam, personally. But I see why some folks choose the cloning route. One advantage is you come away with large volumes of similarly sized females, all producing the high CBD that the wholesale market is seeking at the moment. That makes automated transplanting easier. One disadvantage is that the plants are arguably less hardy, especially over time.
Edgar is passionate on the topic. “Cloning is not how these plants work in nature,” he said. “And they don’t work well for very many generations —the mother plants get weaker over time. So if you go with clones, you gotta source new mother plants periodically. Myself, if I get hold of strong genetics from clones, I pollinate ’em and turn ’em back into seed-producing plants.”
Even though practically everyone I know who has cultivated from clones has had at least some major issues with post-transplanting die-off or greenhouse pest infestation, one thing you have to say in clones’ favor: They are efficient. And if you invest in enough mother plants (which can cost $100 or more each), you can soon personalize your clone operation. Ideally in a solar-powered greenhouse using real soil and sunlight as much as possible.
“We had to move to clones for the quantity of product that we produce,” Bill Althouse told me. “The uniformity, the ease of planting, the regularity of the planting cycles, all made cloning the best option. We can turn hundreds of thousands of soil-ready starts around on a three-month cycle in the greenhouse.”
When a new generation of clones is ready (roughly three inches tall) and it’s the right season for outdoor planting in Colorado, the Fat Pig Society’s farmers can just, in Bill’s words, “plug these little sisters in the ground, two thousand an hour—boom boom boom,” care of machines called transplanters that will sink entire flats of baby hemp plants right from your tractor, at spacing that you choose.
It’s fun to be part of this kind of planting: Two farmers ride on the transplanter in mounted chairs behind the slow-moving tractor, feeding plugs into the rotating planting slots on the transplanters. This is the same kind of equipment that strawberry farmers use. A high-end Italian model called the Baby Trium runs about $25,000. It even has ergonomic chairs for the always-sore farmer.
It’s at harvesttime that uniform plants can really make a larger-acreage farmer’s life easier. “Early on we had plants of all kinds of sizes in the field, which complicated harvesting at scale,” Bill said. “Now we’ve got a replicable system.”
Bish Enterprises, an innovative Nebraska company, engineers and markets superefficient flower-harvesting tractor attachments, which neatly slice and swing a whole row of flowering plants up a conveyor belt and into a catchment bin. I’ve watched its Hemp Handler 6031 model bring in three-quarters of an acre of flower in an hour.
“I think that the time you save makes it worth the [$37,000] investment,” said Bish’s 37-year-old president, Andrew Bish.
Even with the clone advantage of uniformity, if I were growing a female-only crop, I would still grow from seed. And I would not pay the extra thousand or two per pound for feminized seed. I’ve already disclosed that I’m a dioecious guy, even for my flower crops. It’s a hormonal-balance theory. Sinsemilla crops are, when you get down to it, sexually frustrated females. All those sticky trichomes they produce are part of a desperate attempt to snag a stray grain of pollen in order to make babies. My motto is “everyone’s happier when they’re dating” and so I use seeded flower in my product. That is sacrilege to today’s wholesale processors. But I’m not aiming for maximum CBD per flower. I’m aiming for an ideal cannabinoid–terpene ratio—the entourage effect.
But even for flower-only farmers who aspire to an all-female crop, feminized seed can present problems. Cannabis not only wants its THC, it also wants to be dioecious. Maleness creeps back in. This has already resulted in lawsuits in Oregon from folks who paid top dollar for feminized seeds, believing all their seeds would be usable, only to find a few of those pesky boys in the mix.
This issue of “stability” in seeds is a complex one. CBD farmers crave it. Understandably, they want the same crop every season. Knowledgeable growers speak of “F1” and “Bx1” generations of seed, referring to the number of generations of breeding that have gone into that seed.
Here again, my philosophy is somewhat against the grain, so to speak: I look for diversity in my genetics. I want each season to be a distinct vintage. Plus, I seek oddballs—what breeders call unicorns. These are individual plants with unusual traits, some of which you can see (phenotypic) and some of which you have to test for (genotypic). It might be an individual that is fast germinating, frost hardy, high in protein, or in possession of distinct fiber color or unusual cannabinoid content. Here we see another advantage of listening to Bill and watching your crop every day: You’re likely to find a unicorn you’d like to select and breed. Vive la différence once again.
Even for farmers devoted to growing a uniform sinsemilla crop, feminized seed can be a crapshoot. You still are going to have to examine every plant to make sure she’s a female, so why not pay less for seed that doesn’t claim to be feminized? And if you’re a CBD farmer wanting to bring only females to maturity, one of the items on your daily farm walk checklist in the early part of the season can and should be, “check for males.” You have plenty of time to identify and remove them before they mature.
The science of seed feminization is kind of cool, though. I’ve visited farms that employ a variety of techniques to achieve it. At Functional Remedies in Colorado, for instance, farm manager Hunter Konchan demonstrated a method of adding silver to the plant’s feeding, which evidently scares away the Y chromosome.
“The silver, introduced at the right time in the plant’s life cycle, reduces the levels of the hormone ethylene, leading to female offspring,” Konchan told me as we toured the vast Functional Remedies greenhouses. Konchan, by the way, is proof that farming is one of the digital age’s hottest professions: He was hired before he graduated ag school at Colorado State.
Regardless of his genetics choice, when a sinsemilla farmer is visualizing his plant spacing in the field, he wants to provide plants room to branch and flower. I’ve found flower-only crops are best grown like psychoactive cannabis, meaning they should be given much wider spacing than our tri-crop applications demand (30- or even 60-inch bases) and much fewer seeds per acre—around three pounds. Which is a good thing for your budget, because CBD seeds are much more expensive than grain, fiber, and tri-crop seeds. Some folks grow in greenhouses, which are measured by square foot rather than by acre. So to figure out how many plants to cultivate in a greenhouse, measure out five-foot bases until you hit a wall. Although greenhouses that utilize natural light and real, local soil can be great, I myself am primarily an outdoor-cultivating farmer. I believe outdoor cultivation results in the highest-quality hemp, and definitely the most carbon sequestration.
Now on to the big question of peak gold rush pricing: Just what can the first-time hemp farmer expect to pay for seed? The first thing to know is that over these next few pages you will almost certainly encounter outdated numbers. Oh, how I hope so. We are in the Wild West phase of cannabis genetics pricing. Because of young, seasonal, unstable markets, prices can swing hugely both over the course of a year and from region to region. That last part always surprises me a little. One could always hop on a plane. Furthermore, folks offer all kinds of different pricing structures. In gold rush terms, the seed merchants are the shovel sellers. They get paid whether or not you grow a successful crop. When you first explore the seed-market landscape, you feel like a prospector in The Treasure of the Sierra Madre with these hyperinflated genetics prices and colorful characters making exotic offers to you from dodgy websites.
But here are some rough numbers: For CBD seed, you might pay between $3,000 and $6,000 per pound, depending on the CBD levels in the COA for the cultivar. Feminized seed can cost up to $7,000 a pound. Clones range from $3 to $10 per plug, depending on quantity and region. Keep in mind, as we discussed, that you’re planting far fewer seeds/clones for CBD crops (around 3 pounds per acre) than you are for seed/fiber/tri-crop harvests (15 pounds, give or take).
For a different perspective on flower genetics, I’m going to outline the business model of Rich Becks, of Chimney Rock Farms in Colorado. I do this as a countercurrent to my own philosophies, since Rich is a guy I respect, and is very professional in his breeding. He does not agree with my total right of replication outlook or my aversion to feminized seed.
“It costs me fifty K to develop a new line of genetics,” he told me. “Someone who wants to buy a clone for four bucks and make an infinite supply is basically free-riding off our work and investment.”
So Chimney Rock offers a “farmer membership” that costs $5,000 per year. It includes online consulting and access to Chimney Rock’s standard operating procedure (SOP). Becks supplies feminized seeds to each member at what he described as a below-market price—enough for five acres.
“These are high-performance genetics that are developed for full-spectrum products with specific cannabinoid ratios and terpenes,” he told me. “My job is to make the member successful.”
And since feminized seed can wind up costing north of a dollar per seed, the Chimney Rock model can make sense to farmers looking to have reliable genetics plus consulting delivered to their door. Knowledge can indeed be priceless, especially the first time out of the gate. Like a first-time parent, a new hemp farmer is going to have a hundred questions over the course of her debut season. I’d go so far as to say that the most common mistake first timers make is not investing time and resources in gleaning knowledge from more experienced farmers.
Becks favors feminized seed since it’s a labor-intensive and technical process that in his view makes each seed worth the price. “That’s because you add another twenty-five to fifty cents in soil, trays, heat, light, and labor and you end up at half the cost of a clone with a much better plant thanks to its taproot.”
When it comes to replicating Chimney Rock genetics, Becks has a two-tier system. Farmer members can clone Chimney Rock genetics for themselves but not sell them. But Becks said “grower partner members” are licensed to produce Chimney Rock genetics in their state.
“I supply the foundation genetics, maintain consistency, do the R and D and marketing,” he said. “I send them leads and they just grow and pay me a royalty.”
So that’s CBD genetics in the time of Wild West pricing. Now on to seed prices for my favorite hemp apps: everything else.
For cultivars intended for seed/fiber/tri-crop harvests, you might get price quotes as low as $2 per pound for staid old stock that you can’t replant, or up to $2,000 a pound for proven open-source cultivars that you own upon purchasing. If you do the math, after five seasons of owning your genetics, even that higher price pays for itself. For the past couple of seasons, generic seed/fiber/tri-crop cultivars with right of replication tend to land somewhere in the middle of those two numbers: They usually run between $30 and $100 per pound. Then you own the seed forever.
In five years, the genetics landscape, worldwide, will be radically altered from its current form. Prohibition will be a fading memory, supply will be much larger, hemp regulations in most states will reflect the level playing field we’ve been mapping, and legit state certification programs will begin to sprout. As well, the USDA and the AOSCA seed-certification agencies we discussed earlier will begin weighing in with guidelines.
I hope that in a generation, readers of this part of the book can have a deep (if sympathetic) laugh at the situation their parents faced. Your established, major crop, grown in the millions of acres, kids, was once a brand-new gold rush, full of speculators and shady operators, wearing the same Carhartt coveralls (or lawyer ties) as the people trying to save humanity.
I’ll endeavor to keep folks abreast of the situation via social media, live events, television, and short-form social media in coming years. A book is a magnificent thing, but it is static. And that’s one of the few things that hemp genetic prices (and markets) aren’t.
That said, I’m glad we’re documenting the Wild West phase. It’s a legitimate part of hemp history. Plus, if I were entering the hemp world now, I’d be more concerned about genetic legitimacy than prices. That’s because today’s prices are not necessarily so prohibitively expensive as they seem, if you look at the current market conditions for the harvested crops.
It’s all well and good (and no small feat) to grow a pretty crop. But if you’re paying so much to get your seed, what is your potential return? We’ll start with flower markets.
Even at $4,000 a pound for seed, a CBD variety can potentially make a legitimate upper-middle-class living for a 20-acre farmer. Especially for a clever, righteous, farm-to-table provider who is willing to do the extra work and take on the added risk of marketing a value-added product —often called a secondary market product or a consumer packaged good (CPG) product.
Because there are so many value-added products on which a farmer-entrepreneur might focus, outlining the metrics for success can be tricky. My five-year plan with Hemp in Hemp is to scale up from current, tiny 1,000-bottle runs to 10,000 annual top-shelf three-ounce units that wholesale at $50. And that outlook involves utilizing both the seed and flower parts of the plant. Plus I own my genetics, so that budget line item is zero. But if Hemp in Hemp meets that year-five production goal and all 10,000 units sell, that will mean a gross of $500,000 on minimal acreage. Might the production runs expand from there? Maybe. If folks demand more than 10,000 units, then scaling up while maintaining farm-to-table quality will be a good problem to have.
But say you simply want to sell your seed, fiber, CBD flower, or processed crude on the open market. I hesitate to get too deeply into that kind of plan, both because of Wendell Berry’s warning about falling victim to the vicissitudes of fluctuating commodity markets and because wholesale market prices are also on the roller-coaster ride of the Wild West phase. They could crash at any time—I think we have about three years until markets start to mature and stabilize.
But since many folks are going to follow the CBD herd anyway, let’s do the agronomic math: If you’re planting for CBD, you use those roughly three pounds of seeds per acre. (There are about 27,000 seeds in a pound.) Meaning you invest about $12,000 per acre in seeds. The New Mexico Department of Agriculture folks estimate a $6,000 per acre cost to cultivate hemp, outside of genetics—for soil preparation, drip irrigation lines, and so forth. So let’s call your total cost of cultivation $18,000 per acre. You have a great year, and you harvest 1,000 pounds of flower per acre on your 20-acre farm.
The low end of CBD wholesale raw-flower (often called biomass) prices over the past couple of years has been about $20 per pound. (It sometimes goes as high as $1,000, and averages $150-ish.) But at $20, you’d clear $2,000 per acre, or $40,000 on your 20 acres. Not terrible. In a $100-per-pound wholesale market, that same harvest would net you $82,000 per acre.
Even at these most conservative calculations, a hemp crop can yield four times what a corn, soy, or wheat crop does. But if you turn those 20 acres into the 10,000 units of value-added product for which I’m aiming in the medium term, and successfully market the full run (no fait accompli and involving much more sweat equity than simply selling wholesale flower), your gross could be as much as $320,000 before marketing, packaging, delivery, and other post-harvest costs.
Marketing your own product is a gut check, but that route has the highest long-term earning potential for the independent farmer or co-op. If you scale up to 100,000 units, you’ll be well into seven figures of annual revenue. Plus you’ll be providing a great product to customers and sequestering thousands of tons of carbon. So feel free to start rubbing your palms together and making greedy “hoo hoo hoo!” noises. As long as you do it right and have a multi-season game plan, both your bottom line and the planet can benefit.
Another option for the flower-only farmer, as long as recent wholesale prices hold, is to “toll process” your flower into crude. That means using someone else’s processing equipment to turn your flower into the raw materials of your product. This is what Salt Creek Hemp does with its harvest: It has a reliable toll processor for its crude, and a capsule-making company turns the crude into the final value- added product.
On the wholesale side with crude, your 1,000 pounds of flower that tests at 10 percent CBD will give you about 90 grams of crude containing 80 percent CBD per pound of flower. (That’s 20 percent efficiency in processing, meaning you lose 80 percent of the flower mass that you harvested.) Wholesale CBD crude prices hovered around eight dollars per gram in 2018. So now, instead of $20 or $100 for raw flower, your pound of processed flower is worth $720, less your processing costs.
If you’re thinking of going with a toll processor, interview several, and pick someone with a track record of not gouging farmers. One reason we didn’t sell our Vermont harvest as wholesale crude in 2016 is that the dispensary with which we were negotiating wanted half our harvest in exchange. That was a crop we lovingly worked on for 240 days. They would have run it through their equipment in 1 day.
If you’ve got the up-front capital, you might consider becoming a toll processor yourself. Then you can process both for yourself and others. This is what Dexter Rice of Sub-Zero Extracts in northeastern Colorado does: He invested $175,000 for a medium-scale cold ethanol processing rig and related facility build-out costs. Now he extracts cannabinoids both for his own Nature’s Love line of products and for other enterprises that want to lease his 120-pounds-per-day equipment for their own products.
Six figures might sound expensive to a bootstrapper trying to save the family’s Midwest farm via hemp. But Dexter took the leap and it’s paying off: When you generate $250,000 in combined product and toll processing revenues annually, a $175,000 investment quickly pays for itself.
Or you can scale up your processing equipment in start-up-friendly stages, as Margaret Flewellen of Natural Good Medicines has done. She started with a $7,000 ethanol extraction machine from Eden Labs in Seattle, the smallest one they offered. “Our equipment has grown as our business has grown,” she said. “We’re on our third unit now.”
Those in the flower game are wise to always keep in mind that CBD is just one cannabinoid. As a whole-plant advocate for maximizing bioavailability and the entourage effect of artisan cultivars, I’m not a fan of isolating specific elements of the cannabis plant. But in the name of thoroughness, I won’t completely ignore these markets. The equipment exists to isolate just about any cannabinoid or terpene you like. And the markets are real, if volatile.
When I walked into the green room for some coffee before a hemp conference in 2018, a former real estate agent–cum–hemp broker was touching up her makeup and speaking loudly into her phone. She was half lip gloss, half hustle. This is what I couldn’t have avoided hearing her say, even if I had wanted to: “Oh, sure, Yuri, two kilos is as easy as one. We’ll send them both right off, no extra shipping. Yep. Should be there by Thursday.”
When she hung up, she hollered to her partner across the room, “The Ukrainians want two keys now!”
At this point, I jumped in. “I have to ask … was that CBD isolate?”
“CBN,” she said. “Can’t keep it in stock.”
“And, um, if you don’t mind my—”
“Fifteen thousand dollars a key.”
I can pinpoint this as the moment I realized that the hemp industry is for real, worldwide in its fungible markets, and about to become very, very big. Specifically, it was my first of many reminders that there are 110 other cannabinoids in play. Today I got an email asking me what I charge for CBG (cannabigerol) isolate. Heard of that one? One peer-reviewed study listed “anti-inflammatory” and “antiemetic” as two of CBG’s qualities, and another found it inhibited colon cancer cells.4 Vermont farmer Rye Matthews of Northeast Hemp grows in part for CBG and told me he finds it “uplifting and analgesic.”
Folks growing for organic seed applications (like hempseed oil and hemp hearts, or value-added products using them), rather than flowers and their embedded cannabinoids, can expect to harvest 1,000 pounds of seed per acre. That’s the new normal, up from the 600-to-800-pound Canadian average of just a few years ago.
In the wholesale market, organic seed for food is worth between one and two dollars per pound. If you paid $300 per acre for your planting seed ($20 per pound), then your profit, for much less work than a flower crop, is $700 per acre wholesale (if you received one dollar per pound for your harvest). And here is where seed ownership is so crucial: The following year, your seed is free. Plus your own seed is available whether or not seed companies come and go.
Dioecious crops are considerably less labor intensive than sinsemilla crops because you’re not obsessing over gender and flower manicuring. If you toll-process your seed harvest into a hemp-heart product that you market yourself, again, you’re talking much higher revenue than wholesaling whole seed. Organic hemp hearts retail at around $15 per pound.
Owning seed-processing equipment is a less expensive proposition than owning flower-extraction rigs. A high-end, single-screw, seed-oil press will set you back about $15,000. Capacity varies, but you’ll be able to press 250 to 500 pounds of seed with a small press in a 10-hour workday. So if you’re expanding, you might need more presses, pretty quickly. Hemp Oil Canada, then the world’s largest seed-pressing company, was on its fourth equipment upgrade in 10 years when I visited its Manitoba facilities in 2013. And that was before US legalization.
Whether you’re buying seed presses, dehullers, or bottling machinery, today’s players all emphasize the importance of high-end equipment, whether new or used. You get what you pay for, and top-of-the-line equipment companies tend to offer better customer service. That’s essential for a nonmechanical guy like me.
Chad Rosen, president of Victory Hemp Foods, a hempseed processor in several US states warns, “Nothing ever comes ready out of the box. So finding a company that still exists when you call is a wise investment. We learned that one the hard way.”
Rosen said that a reliable US seed-oil press manufacturer is Wisconsin-based AgOilPress. In 2016 in Vermont, our group used a Swedish Täby press, which worked slowly but terrifically.
Fiber is, as of this writing, financially viable only for those with large acreage. That is, unless you are a craftsperson hand-making the hempen equivalent of a Stradivarius. Which is not a hypothetical: two companies are already offering hemp-body guitars: Silver Mountain Hemp Guitars and BugOut Guitars. Small-volume, ultra-high-end hemp-based consumer goods are a viable small-acreage market for fiber.
Generally speaking, though, you need about 3,000 acres to feed even a small fiber-processing facility. But that makes it an ideal market for a cooperative, as we’ll discuss. The fiber is there in the field regardless of your primary harvest application. So if 25 big-state farmers team up to process the conservative 6,000 tons that 3,000 acres will provide, there’s significant value there.
Just how much value depends on how entrepreneurial this hypothetical farmer co-op is. Baled “mixed fiber” drew perhaps $200 per ton in 2018 (a bit more from buyers under contract with the few existing North American fiber facilities). But say you form a co-op that separates the hurd (the inner core of the hemp stalk, sometimes called shiv) from the bast (the long outer fiber, which makes such fine clothing, paper, plastic composites, and next-generation battery components). Then you have multiple streams of secondary-market products.
Hurd is the hot fiber app at the moment. Marty Phipps of Old Dominion Hemp asks $15 for a bagged, 33-pound bale, which is used as horse bedding. Hurd is also popular for the fast-growing, carbon-sequestering hemp construction market (known generically as hempcrete building). Spill cleanup and moisture absorption are additional up-and-coming markets for hurd.
That relatively simple process of separating the bast from the (in this case) desired hurd through a technique called decortication quadruples the fiber harvest’s value, to $800 per ton. All you have to do is open your gate once per season for the co-op fiber-collection truck, and you share in the value-added revenue of the bagged hurd’s final price. There was so much demand for Phipps’s product that he still, as of 2018, had to import some of his hurd.
Now, someone has to buy, operate, and maintain the decortication machinery (which ranges from $20,000 for a small-scale hammer mill to $8 million for true industrial-scale facilities), plus the bagging operation and climate-controlled storage. Here is where the Farm Bill comes in particularly handy: Hemp farmers now have access to agriculture grants and loans.
Keep in mind that when you do decide to market any value-added product, you bear the burden of elements like quality control, insurance, and payroll.
“You’re on the hook for liability once you decide to be the entrepreneur,” Roger Gussiaas of Healthy Oilseeds in North Dakota reminded me.
But value-added product will often be the better option with any part of the hemp plant for the enterprise with a long-term game plan based on top-shelf quality. If you stake your enterprise on current gold rush wholesale prices, you’re probably in for a shock. A wild initial pricing ride is a normal phase in the growth cycle for any booming new industry—not that knowing this makes the bite any easier for the new farmer-entrepreneur who makes the wrong decisions.
The best way to insulate your small-acreage enterprise from the coming wholesale roller coaster is to develop your own product line. But I hope that in so doing you remember Margaret’s Law: You might want to call off any plans for downtime for a half decade or so. The uptime is generally a lot of fun, though, when things are going well and you get to skip through fragrant hemp fields for a living. Plus you get to save humanity.