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Growers and entrepreneurs interested in joining the expanding industrial hemp industry in North Carolina were told to start slowly and beware of the risks at Friday’s agriculture summit at Wilson Community College.
More than 200 people attended the first NEW Business of Agriculture summit, which focused on regional opportunities for growth in Nash, Edgecombe and Wilson counties.
“It is a lucrative crop if you do it right,” said Angela Post, small grains extension specialist at N.C. State University. “We look forward to having more growers come on line in North Carolina.”
Bruce Perlowin, CEO of Hemp Inc., said its 85,000 square-foot hemp processing facility in Spring Hope is the largest in the western hemisphere.
Cannabidiol, or CBD, is a compound in hemp with a mild psychoactive effect.
“CBD is the fastest-growing industry in the world today, growing by 700 percent,” Perlowin said. “The medical claims that are out there for CBD are pretty phenomenal everything from sleep to seizures to pain — whatever it is, it works, and people are buying it like crazy. CBD stores are probably opening up probably one a week in America.”
Scott Propheter, head of field operations and outreach for Criticality LLC, a new 90,000 square-foot Wilson processing facility opening in January, spoke to the entrepreneurs in the room.
The company extracts CBD from industrial hemp.
“I am the speaker of hard truths, and it is very difficult to start a business in this industry right now if you have to raise capital,” Propheter said. “You are not going to be able to get a loan from a bank on any of this, whether it is for equipment costs or whether it is for operating money.”
Propheter said until a federal farm bill that would lift an 80-year ban on hemp passes, there is a reluctance from financial institutions to get involved in the hemp industry. That reticence could linger even after the hemp ban is lifted.
“There is a lot of legal ambiguity in it,” Propheter said. “You have to have a tolerance for risk in order to fund a project like that.”
People interested in getting into the hemp business should keep in mind that right now it is an unregulated environment.
“Getting into this industry right now, there is a lot of risk involved,” Propheter said. “There is a lot of volatility in the market.”
The prices for a kilogram of CBD extract range from $4,500 to $35,000.
“There is a lot of smoke and mirrors in the industry right now,” Propheter said. “There are lot of folks doing bad business. This is gold rush mentality right now, and there are a lot of bad actors in the industry right now. The FDA getting involved is going to clean a lot of that up.”
More than 4,000 acres of industrial hemp were grown in North Carolina this year. All of it was raised under the regulation of the N.C. Industrial Hemp Commission.
“There is a good opportunity for growers to work this into their crop rotation and make a very decent living,” Propheter said.
Tony Finch of Finch Family Farms in Nash County is one of the new hemp farmers and spoke at the conference Friday.
“Big tobacco didn’t care much about small family farmers, so I decided to try hemp,” Finch said. “You’d hear all of these big numbers and people making claims. I figured I could get some of that.”
Finch said he learned much of what he had to know about it by trial and error.
“If I can do it, y’all can do it,” Finch said. “It’s not rocket science. It’s not that complicated. If you love plants and love growing things, you will have fun learning this stuff, and you can figure this out.”
This will be his second year growing hemp.
“My first year, I fell flat on my face,” Finch said. “I jumped out there, and I had a hard time.”
Finch advised farmers to start small.
“Don’t go out there too big,” Finch said. “You can spend a lot of money on this crop, so start small. You can get discouraged early. No need to lose the farm.”
Finch described hemp as a tough, hardy plant that loves sunshine.
“If you are planning on making money on this, put it on good land,” Finch said. “These things do not like standing water.”
Finch learned that the plants need to be placed five to six feet apart and allowed to spread out.
“It’s really simple. It’s a lot of hands-on. It’s hard work, but it’s not any worse than tobacco,” Finch said. “Y’all noticed I had the kids out there working. I grew up in tobacco. I’m trying to grow my kids up in hemp.”
Angela Post, small grains extension specialist at N.C. State, said hemp is a natural substitute for tobacco.
“As far as having growers on the agronomic side that know how to grow this crop, we are going to be at the top of the game when it comes to that because we can grow it similarly to tobacco,” Post said. “We have good tobacco growers in the state and we have folks who are having to deal with loss of contracts and things on that. So I think we are going continue to grow at least over the next five years and at that five-year mark, I think we are going to see where the saturation is on the CBD side. In North Carolina, following that, we are going to see growth in grain production, certified seed production and also fiber production. Fiber probably will come on last as far as that goes because we do have so many certified seed growers in our state. I think they will go for grain first, but that’s just my opinion.”
Pender Sharp, a Wilson County farmer, found the presentation interesting but doesn’t plan to grow hemp.
“There is probably an opportunity for some farmers to fill a niche market,” Sharp said. “It is certainly foresighted for the community college to present this information. I think people need to proceed very cautiously. Certainly as a tobacco farmer, tobacco will be here a long time and it is still a profitable commodity. We still have good markets around the world. I don’t see this as a replacement for anything, but my be an opportunity for a few farmers to look for a niche market.”
Dell Turner, a farm owner, said the potential for hemp is “phenomenal.”
“I think we need to continue to look at new crops to be able to diversify our income sources,” Turner said. “It’s something that needs to be looked at. Do I fully understand it? No. Do I understand what the regulations are going to be? No. It is something clearly that we need to consider.”