More and more farmers are growing hemp after the passage of the 2018 Farm Bill that legalized the production of the plant nationwide.
Thirty farmers in Montezuma County and 45 in La Plata County are listed on the Colorado Department of Agriculture’s hemp registration.
Amos Lee, manager of Ignacio’s Farmers Fresh Market, and his brother, Zeph, experimented with 1 acre of hemp on their other siblings’ farm east of Ignacio.
“There are not a lot of real profitable crops these days,” Lee said. Hemp, he said, at least for now, is one of them.
It’s important to understand that there are different hemp plants used for different purposes: cannabidiol (CBD), hemp or seed oil, and fiber. CBD crops require the most input and expense to grow but have the highest returns. Underneath that is hemp oil, which has no cannabinoids, the potent factor in CBD, and is used in food and body products. The return on CBD oil to hemp oil is around 45-to-1. The lowest tier is fiber crops.
Compared with other crops, the return on 1 acre of a CBD hemp, without any investment, is potentially around $50,000 per acre. Hay is about $1,000 per acre. The price will drop as the industry becomes more saturated.
Last year, Lee purchased plants from AJ’s Greenhouse for CBD purposes. He sells the flower and worked with the pharmacists at Farmers Fresh to develop a Lee Hemp Co. tincture and cream. They are sold at the market and at leehemp.com.
“I had not grown cannabis before, so it was experimental, a last-minute decision,” he said. “We just acquired some seed and went for it. It went pretty well.”
This season, Lee is planting at least 7 acres of hemp, and he plans to buy plants from Clutch Hemp Co. The Durango company is poised to be one of the first vertically integrated CBD hemp companies on the Western Slope. They currently sell their clones (plants with identical genetic makeup) and offer consulting services. In the fall, they will offer harvesting, drying and extracting services to farmers.
The services are useful for farmers who, like Lee, are grow hemp on a larger scale but don’t have the equipment or know-how.
“We’re trying to network in the community,” Lee said. “I see there being a great need for that.”
Clutch Hemp CEO Patrick Cain, who quit his job as an ER doctor at Mercy Regional Medical Center two weeks ago, and COO Stefano Creatini founded Clutch last year. The two met because they both raise mangalitsa pigs in Durango. Cain has been involved in the agriculture business for the past decade and began experimenting with hemp three years ago when he moved to Durango.
“The original idea was to just grow – just be farmers this year,” Cain said. “But once we realized where the industry was and that there were a lot of inefficiencies ... we decided to start our own company and do it right.”
There are only around five modified combines in Colorado that are used for hemp. Clutch purchased one from Germany, The Claas, which Lee plans on utilizing in the fall for his larger crop.
After hemp is harvested, it needs to be dried quickly to maintain quality.
“The management of the oil is very critical because if you lose just 1% or 2% (of the CBD), that is hundreds of thousands of dollars,” Cain said.
Currently, hemp farmers dry in the field or ship the biomass (the bud and leaves that contain CBD) to Denver or Colorado Springs to dry.
Clutch’s dryer operates at a low temperature so none of the CBD evaporates. It has the ability to dry 6,000 pounds of hemp per hour, burning about 200 gallons of propane in that time. Most hay farmers don’t have the funds to invest in the massive driers or large combines.
Beyond farming, Lee said extraction businesses were set up for marijuana, not hemp. The facilities are not geared toward the scale of hemp, which appeals to a much broader market.
“I know all sorts of conservative Christians who are using it,” Lee said.
The bottleneck issue has resulted in price gouging. The price of extraction for a pound of hemp is around $35 or more.
Lack of regulations has led to dishonest extractors or people selling snake oil products. The only regulation is the FDA’s Good Manufacturing Practices that apply to anything that goes into a supplement or food.
The only other stipulation is hemp plants have to be under .3 percent THC under the Department of Agriculture’s definition. But as far as standards set on the hemp itself, there are none.
“Quality all starts to form in the clones,” Creatini said.
The plant’s quality is measured by its percentage of CBD. When measured at the highest concentrated area of the plant, the industry average is around 10% to 12%. Clutch’s greenhouse plants push 19% and their outdoor plants are around 15% to 16%.
“We are trying to develop this region as a premium product, like Napa wine country,” Cain said.
“We are trying to make this part of Colorado be the best place for CBD.”
To do so, they want to keep hemp farming in the area CBD hemp only. If a hemp oil crop was planted near a CBD crop, they could cross-pollinate and this could drastically decrease the quality of the CBD plant.
“We are really working collaboratively to get as many farmers as possible to expand as much as possible because we do see this as a way to rejuvenate the agricultural lands in the region,” Cain said. “We understand there is a bubble aspect to it. The prices are not going to be this great forever, but even if the prices are this nice for two or three years, it allows farmers to reinvest in their fields.”