Hemp farmers work to set industry apart from marijuana

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Daniel Chang, co-owner and operator of Kria Botanicals, moved to Vermont with his family four years ago expressly to join the state’s fast-growing hemp industry.

Although at that point hemp, the cannabis plant that does not contain high levels of the psychoactive ingredient THC, still had a low profile in Vermont, Chang saw opportunity in the state’s agricultural economy and its reputation for quality products.

 

Now Chang, who ran a microbrewery in Minnesota, operates a CBD extraction company and laboratory in South Burlington. He was one of several hemp industry leaders who got together at the Statehouse on Friday to talk to lawmakers about their business. CBD is a product with medicinal uses that is extracted from the hemp plant.

“I saw a unique opportunity,” said Chang. “In the last couple years I’ve been working with farmers… growing hemp in Vermont, learning about genetics, farming, climate.” Along the way, he and Kria CEO Bill Lofy saw a need for a laboratory that would help them extract CBD to sell wholesale.

“How does a farmer who grows an acre of hemp get that raw commodity into safe, sellable form? How do value-added processors know their products are legal?” Chang said. “ The legitimacy in this industry will come through analytics.”

The House Agriculture and Forestry Committee and the House Commerce and Economic Development Committee held the joint hearing to learn more about the fast-growing industry, which gathered momentum in December when Congress ended the federal prohibition on hemp production.

Now, after a long period of working largely without conventional business supports such as insurance and loans, Vermont producers are working with banks and joining forces to help their industry grow the way they want it to.

One of their first priorities, the producers told lawmakers, is to make sure all hemp growers and CBD producers are held to quality standards.

Carolyn Partridge

Rep. Carolyn Partridge, D-Windham, chair of the House Committee on Agriculture and Forestry. Photo by Bob LoCicero/VTDigger

Rep. Carolyn Partridge, D-Windham and chair of the House Agriculture and Forestry Committee, said she’d like to use CBD lotion now, but she’s worried that it would show up on a drug test. Partridge drives a school bus.

“I grew hemp this year, and I’d like to make some salve out of it,” said Partridge. “I’d love to rub some stuff on my knees, but I’m worried that I’m going to get busted.”

Reliable lab testing can take care of that, said Carl Christianson, who founded the Northeast Processing hemp operation and laboratory in Brattleboro.

“We have to make sure we have trustworthy foundation of analytics so when people have a label that says it has no THC, they can trust they won’t be drug-tested and fail a drug-test,” Christianson said. “These challenges from an entrepreneurial perspective are also opportunities.”

Another priority is to educate the lawmakers and the public on the difference between hemp and marijuana.

“We want to make very clear that we see hemp as an agricultural good, something that is totally removed and different from marijuana in terms of the medicinal and recreational side of marijuana,” Christianson said. “It is important to go through the process of regulation.”

Otherwise, he said, hemp farmers and CBD producers might find themselves regulated the same way marijuana growers are, which could suppress their business. The Legislature is expected to take up the matter of taxing and regulating marijuana this winter.

It’s also important to make sure the Vermont trademark is protected, said David Barash, CEO of Luce Farm Wellness. Barash said he has been running agricultural consumer products businesses in Vermont for 40 years.

“One of the challenges I’ve seen in the market here in Vermont, and one of the things that is being observed in an early market such as CBD and hemp, is that many folks use a Vermont label without the produce being grown in Vermont or processed in Vermont,” Barash said.

“In some places the oil is purchased at the cheapest rate and put in a bottle with Vermont label. The risk here is pretty significant,” he added.

Hemp plants growing in Chittenden. Photo courtesy of Robin Alberti

Hemp is an industry that can revive Vermont’s farm economy and attract educated professionals, the industry leaders said. Christianson moved to Vermont from Boston last year and opened his business in October. He and his wife are building a house in Weathersfield.

Some of the hemp business owners also met with officials from the Agency of Agriculture this week to talk about regulations for hemp growers and laboratory operators. Most of the industry regulation will happen through the rulemaking process, with minimal involvement from lawmakers. But there’s value in educating lawmakers about hemp, said Lofy.

The Legislature would have to be involved if the industry tries to change the legal concentration of THC in CBD products, which is now set at .3 percent, said Lofy. And there are regulatory structures that must go through the legislative process. For example, Lofy’s business can extract THC from CBD.

“The Legislature can provide some clarity,” he said. “What do we do with THC when we extract it? Can we engage in commerce with a medical dispensary? Should we destroy it? Right now the statute does not address that issue.”

Chang and Lofy have formed a loose partnership with Christianson; with Rebecca and Joe Pimentel of Luce Farm Wellness, a hemp and CBD operation in Stockbridge; and with Brenden Beer and Amy Skelton, owners of Kitchen Cabinet Medicinals in Greensboro.

“We’re competitors with one another, but we have a shared vision for this state,” Lofy said. “We believe we’re all going to be able to thrive with proper and thoughtful regulation.”

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