Q: How has the signing of the Farm bill changed the industry?

The Farm Bill has certainly created an influx of individuals, businesses, and investors that are interested in getting involved in the hemp industry now. We’re hearing from a lot more farmers across the country that are excited to start growing hemp. We’re hearing about major investment happening across the world, and particularly here in the US, as a result of the Farm Bill.

We see it having a massive impact on the potential for the industry and  starting to bring about a lot of the basic necessities that have been missing, like banking, insurance, protections for interstate commerce. It’ll take some time to really have its full effect, but the Farm Bill is going to give the Hemp Industry the support it needs so that it can grow. Those investment dollars are going to trickle down from CBD into some of those other categories, like food, fiber, and building materials, allowing those industries to also get more of a foothold here in the US. The economic impact of the signing of the Farm Bill is going to last a long time.

Q: Have all the logistics, like banking and insurance, started to pop up yet?

It’s slowly but surely happening. Banks that have been more progressive but didn’t feel totally comfortable yet are finding out how they can make it work for their shareholders and their executives. With the major banks, though, it’s going to be a while. They may start with only supporting the Hemp Farmer, without touching anything related directly to CBD sales. There is still clarification that is going to have to happen over the next couple of years—hopefully not too much longer than that—to finalize some of those uncertainties for the major banks and insurance companies. Slowly but surely, tides are turning in all those categories.

Q: What states are leading the charge in hemp farming?

The states that are leading the charge are Colorado, Oregon, Kentucky, Nevada, and North Carolina. Most of those states were on the early-adoption side. States like Colorado and Oregon were certainly at the forefront of open-market sales and marketing of the byproducts of hemp as part of RND that needed to happen under the 2014 Farm Bill.

Our business was fortunate to be here in Colorado where we had the Department of Agriculture on our side helping and supporting us to create more of a free market for these products. Like most of us predicted, the rest of the country is trying to play catch up. Thanks to the states leading the charge, there is a community of hemp farmers nationwide that have had a head start in this industry and helped pave the way for a larger pool of individuals and businesses to get involved with a reliable hemp supply chain. Now it’s really game-on all over the country and all over the world.

Q: Where are farmers able to obtain seed?

When it comes to seed, there are not a lot of proven, reliable options. State-by-state we’re starting to see a handful of companies emerge that are showing longer track records of producing solid seed that is working for farmers and staying compliant in producing the results that people are looking for. This year there is an overwhelming demand for seed  with masses of new people getting involved with the global demand picking up after the passing of the Farm Bill. At this point, word of mouth is the best way to find seed. There are a handful of companies that are advertising—we’re certainly one of them–but you can’t go into a store and buy seed. As a consumer, you are typically dealing with companies online or making personal connections with sources directly to be able to work with them. We’re seeing a lot more small seed companies pop up and start to fight for the remaining market share, but only a handful of companies that have been around for longer than a year or two.

Q: Are there any regulations or issues currently holding back the industry?

Education and misinformation. A lot of politicians that are less progressive say things like, “because hemp looks so similar to marijuana, we don’t want it in our state because it would be indistinguishable and people would be trying to grow that instead.” We just need to get past that closed-minded mindset, otherwise those states are going to miss out on this economic opportunity.

Also, a lot of people would say that the FDA is trying to shut down the hemp industry. While I don’t agree with everything they’re doing, I do agree that there is a bit of regulation that needs to start happening for the consumers’ sake. Hopefully the FDA can assist without trying to just shut the CBD industry down on behalf of big pharma like some people are worried about. I think there is a middle ground to be found, but there is a lot of uncertainty about the FDA. That’s one big thing preventing a lot of the big groups from jumping in and investing, it’s probably the stance of the FDA right now which is a little up in the air. There was a request from congress asking the FDA clarify their stance on it, and it looks like they’re attempting to do so in a way that is a path to consumers having access to these products.

Q: What is their current stance in regard to CBD?

The big question they’re asking is what to classify it as. Is it a drug, is it a food product, is it a supplement? CBD isolate has been shown to be a pharmaceutical product, but most of what’s being sold on the market has a wide range of cannabinoids and compounds outside of just CBD. Most of our products have the full spectrum. While CBD has a pharmaceutical classification, hemp extract and other cannabinoids do not. While the FDA is trying to say that it’s not allowed in food products—because you can’t have something classified both as a pharmaceutical ingredient and a food ingredient—there is precedence that goes back to early 1800s of Hemp and Cannabis being used in food products that tested for THC and CBD. That shows you can’t say it’s only a pharmaceutical. So it’s things like that that are still being figured out. I have faith that the industry is going to continue to find plenty of pass to market regardless of where the FDA’s stance finally lands.

Q: Is hemp profitable?

Yes, hemp is extremely profitable right now. It can also be relatively modest money, so it just depends on what type of hemp you are growing. The guys that are growing CBD are seeing some unheard of numbers for farming per acre. Upwards of $200,000 an acre which just seems ridiculous but it happens. We’ve heard of people hitting more than that per acre seeing that return selling the raw biomass from their farms. I think the average is going to be a lot closer to maybe $50-100k right now, but for a farmer that is used to be making $1000 an acre, that is a pretty significant increase. Hemp is extremely profitable if you do it properly and find a path to market.

Hemp fiber, food, and building materials can still be profitable, but you will see returns that are more in line with traditional agricultural farming operations . Maybe a couple thousand bucks an acre, which is slightly better than the average farmer, but it is the CBD right now that farmers are flocking to for high returns.

Q: How long will this trend continue? In five years will the numbers be the same?

No it will fall a lot faster than that. I think farmers have just a few years to do pretty well in hemp. I think in the next 5 years we will see prices drop significantly as the global market picks up in terms of quality and production output. This will cause a lot of farmers to reevaluate whether they want to continue growing hemp or switch back to other crops they were growing previously. But it is common in farming to bounce around when there are opportunities or when there is a new crop demand or there are tariffs that are introduced that make growing crops like soy or corn more or less profitable. There is no better time to get into hemp than today.

Q: How would farmers go about converting their crops to hemp?

Most people are germinating their seeds indoors or buying seed starts, then using a transplanter behind a tractor to get these into the ground. It’s all relatively accessible equipment even if someone doesn’t have it on hand. Drip irrigation and field flooding are the most common practices from an irrigation perspective, which are pretty common in the farming industry. It’s really on the harvesting side–bailing and drying–where the equipment is getting to be a bit more custom. A lot of experimentation, research, and development going on with the major farm implementation companies. John Deere, Case, and plenty of others are putting out equipment now that can bring hemp fields down in a number of different ways; but all that comes back to how you plant it and how you treat it during the season when it comes to how you get it out of the field. Once you get it out of the field you have you figure out how you are drying and storing it. If you can’t dry it and store it, you need to figure out if there is an option for you to bail it that is not going to degrade the material too much so you have something that can be dried once you have the capacity for drying.

Q: Can iHempx assist with supply chain?

Yes, particularly in regions like Oregon, Colorado, California, Nevada, Kentucky, and North carolina. We really have some great resources at our disposal in Oregon, Colorado, California, and Nevada. We’ll continue to expand and have more reach with farmers all over the country.

Q: Any existing guide to converting to hemp?

Not at the moment. Most people are focused on trying to benefit right now, and it hasn’t become mainstream enough yet. The people that know how to do it are often keeping their heads down and trying to expand their operations or charge for their services, so I haven’t seen any great resources for farmers that serve as a tutorial or guide on how to do it.

Q: Where does iHempx fit into this equation?

iHEMPx is here to service the industry by being a trusted, vetted, and reliable supply chain partner from seed to finished product. We can assist in all aspects of the supply chain. Whether you are trying to find buyers for your products and services, or if you are looking to get into the industry for the first time and are looking for the highest quality and most reliable seed and farming partners that exist, iHEMPx can find or be that partner for you.

The post Interview with Mike Leago of iHEMPx: State of the Hemp Industry appeared first on iHEMPx.

Q: What is your background in farming and in hemp?

I got into hemp farming and production out of the cannabis industry in 2015. I started a hemp farm with a friend in Longmont, Colorado. We learned through experience the differences between indoor cultivation and outdoor cultivation. We had to learn most lessons the hard way, but we still had a successful first season.

Q: What inspired you to start iHEMPx?

I realized that the largest need for the industry was more connectivity and more support for the farmers and growers getting into the industry, and the other suppliers and other people in the supply chain, so decided to found International Hemp Exchange as a result. The idea with International Hemp Exchange was to give farmers, processors, and retailers access to product and connectivity with others in the industry that were doing things the right way. It started off more on the retail side—think Amazon for CBD when there weren’t a lot of options for somebody producing branded product—but it quickly evolved into a tremendous amount of wholesale demand and supply-chain support.

Q: What do you see for the future of iHEMPx?

I see iHEMPx having a foothold in the supply chain of Hemp, both domestically and internationally. I want to give farmers, processors, and brands consistency, reliability, and support for the effort they’re putting into the industry. Because of this, we plan to be vertically integrated by producing seed and working directly with farmers. In an effort to provide the best support for the supply chain, we need to have a more strategic approach, which means working with the best when it comes to genetics, helping and supporting farmers across the country, and figuring out who the best and most reliable partners are for a consistent supply chain. Similarly with extraction, we will be working with some of the best and most reliable partners in the country, as well as investing into our own infrastructure and technology.

Q: Can iHEMPx assist with supply chain?

Yes, particularly in regions like Oregon, Colorado, California, Nevada, Kentucky, and North Carolina. We really have some great resources at our disposal in Oregon, Colorado, California, and Nevada. We’ll continue to expand and have more reach with farmers all over the country.

Q: What makes iHEMPX a powerful partner?

It is our track record. You would be hard pressed to find somebody who has had a bad experience with us anywhere in the supply chain and that is what we pride ourselves on. We are here to do good business and be good stewards to the hemp industry and the hemp supply chain. Our reputation shows that we go about this with the right ethos and we’re in it for the right reasons. While it is a profitable industry, it is also one that is very rewarding to communities and the planet. Humans and animals all over the world will benefit from hemp being reintroduced into society. So, we are here to be a conduit for that to happen in a positive way and connect people that want to be good stewards of the land and of business.

Partnering With The Best

Q: Why was HGH chosen as a partner?

We were the first licensed bonded hemp broker in the US and we’ve been helping farmers buy and source genetics since 2016. About a year ago, we were just overwhelmed with the number of seed inquiries, particularly those regarding feminized seed. We had a relationship with HGH seed and worked with them on a number of deals to help farmers find a high-quality seed. We had farmers reaching out to us to see if we could help them source HGH seed over anything else on the market and knew that since we were local to HGH we may have access.

We ended up working with HGH quite a bit and had some really great experiences, other than that there were not enough seeds to go around for all the demand. When we started realizing that HGH only had a certain allotment that we could help bring to the market, we started working with a handful of other companies that were producing and selling seed. We had some really terrible and expensive experiences.

We didn’t get the seeds we were promised, we didn’t get feminized seeds from a couple of groups that were promising those to us. We ended up having to go out of our way a lot because it is our ethos to make deals right for our farmers even if that means coming out of pocket on some really large deals to get our clients what they needed to have a  successful season.

So, once the dust settled from a few of those bad experiences, we realized that it was going to be imperative to partner with the best. Since we had not had any negative experiences with HGH and had only heard positive things from farmers that had been growing it…they were our first choice. After months of working together on different ideas and ways to make it happen, we identified Oregon as a market that we could help HGH break into. We partnered on a production facility in Oregon to produce, market, and sell their genetics and established ourselves as a national and global sales partners for HGH to help them field inquiries and spread the reach and brand of their company.

Q: Why is HGH the best?

Like I said before, it is the track record. HGH started in 2014 in Colorado with one of the first hemp farms in the country and has been putting out quality reliable seed ever since. They were really one of the first to identify this niche opportunity and put out the highest quality product and ramp up production, genetic development. HGH genetics were used in many of those breeding programs and imitated across the country.  If you look at it from the perspective that “imitation is the highest form of flattery”, no one is being imitated more than HGH right now.

I think they have created the premium quality boutique high-percentage CBD varieties that can still be compliant. Their compliance record and the ability for the total THC to remain under .3% while still having some really high and really attractive CBD values is outstanding. Also, for the total composite of the plant once it is harvested and homogenized to remain high in those attractive cannabinoids and compounds is exceptional.

Q: What does the future look like for the partnership, hemp, and iHEMPx?

It’s hard to talk about the future because I either get pretty far out there or I come back to the fact that the world of hemp can change so quickly. As we are identified as a leader and innovator in looking at new opportunities, I am continuously amazed at what is brought to the table.

Right now it is the opportunity to partner with HGH genetics. We are putting a lot of our resources toward developing new genetics, bigger production facilities, more distribution channels both domestically and globally. As you do that, it creates not just ripples, but massive waves. HGH is the leader in genetics right now so we are seeing first hand, the amount of farmers that are converting, the acreage that’s going up, and the rising global demand. It’s hard not to feel the effects all of these things are going to have downstream.

It feels huge when you look at the total biomass produced, the total amount of drying and harvesting infrastructure that’s going to need to be in place, the amount of extraction capabilities that need to be set up in order to utilize that material, and then ultimately the market for all for that. Ultimately it comes down to the consumer realizing the benefit and us having the paths to market. Whether as a daily supplement, part of their skincare regiment, or pain management in the athletic world, there are countless ways that CBD can be introduced to more products. But it comes down to having the green light to put it in these products and put these cannabinoids, compounds, and terpenes into all these different products around the world.

If all these things line up, it will take off like crazy. If they don’t line up, we are going to experience massive bottlenecks. In the season, in drying, in extraction, having all this supply and then having the FDA clamp down on it and saying “ you guys don’t have any access to the consumer”. There is a lot to be determined in the future, but we continue to hit things on a trajectory and pace that continues to grow exponentially and overcome these bottlenecks. If we continue on that trajectory, it’s going to be a fascinating thing to see unfold because it’s having a global impact today and we are only at the tip of the iceberg.

Stay tuned for Part 2 of the interview: State Of The Industry

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