VOL. 45 | NO. 21 | Friday, May 21, 2021
By Tom Wood
They are positioned greater than 2,500 miles aside. But besides for his or her polar-opposite inhabitants bases, there are numerous similarities between tiny Ketchum, Idaho (2,878 residents, the most recent census figures present) and Knoxville (741,000).
Both cities sit within the coronary heart of the nation’s largest mountain chains, the Rockies and the Appalachians, and each are close to scenic leisure/ski areas. Knoxville, in fact, boasts Gatlinburg, Pigeon Forge and the Great Smoky Mountains; Ketchum counters with Sun Valley and Bald Mountain.
And each have their share of well-known residents, previous and current. Ketchum has been house to the likes of Oscar-winning actors Gary Cooper and Tom Hanks, creator Ernest Hemingway, musicians Peter Cetera and Steve Miller, and athletes Picabo Street and Dick Fosbury. Knoxville can brag on having been house to Oscar-winning actors Patricia Neal and Quentin Tarantino, creator Alex Haley, musicians Roy Acuff and Kelsea Ballerini, and athletes Peyton Manning and Ralph Boston.
Now they’ve another factor in frequent – a stake in every state’s younger hemp business, which has skilled extra ups and downs than a Dollywood curler coaster, together with falling costs, market saturation and the COVID-19 pandemic.
“So, you’re looking at prices falling by 90% over a two-year period,” says Michael Sanders, president of X-tracts LLC in Joelton, who provides he’s concerned “in every aspect” of taking hemp from seed to shelf.
“Farmers were growing crop and they had contracts in 2019 and they thought they were gonna get $30 to $50 a pound for hemp. Today, there are people paying a dollar a pound on something that costs $4-$5 a pound to grow.”
Good information from Knoxville
Ketchum-based firm Hempitecture, Inc., a rising chief within the biobased insulation business, not too long ago opened a distribution middle in Knoxville for its hemp-based merchandise to serve shoppers east of the Mississippi River.
It was welcome information in powerful instances for the business.
While Hempitecture doesn’t really develop or purchase Tennessee hemp – and even manufacture its HempWool insulation and Hempcrete development materials – that might sometime change, says Hempitecture CEO Matthew (Mattie) Mead.
“We’re a company that specializes in what we believe is the most sustainable insulation material on the planet. (HempWool is) a 90% hemp fiber batt, so it can be used in lieu of fiberglass, rockwool or other batt insulation products,” Mead explains. “It can even take the place of spray foam insulation.
“We work with a manufacturer based out of Canada (and) distribute this product all across the United States … with our first warehouse being Salt Lake City, which is a pretty well-located hub for the Rocky Mountains and Northwest.
“But with our growth over the last year and a-half, and with the growing popularity of this project, we’ve been looking for an ideal location to set up a new distribution center. And we chose Knoxville for a couple of reasons,” Mead provides.
Michael Sanders, president of X-tracts LLC in Joelton, has seen hemp costs rise and fall as he works to maintain a gentle provide for his enterprise.
— Photo By Michelle Morrow |The Ledger
“First off, Tennessee is super-well located to reach the Eastern Seaboard, the Southeast – even the Midwest. That was one of the main criteria. It’s a vibrant city, a vibrant area. So having a distribution center there made a lot of sense from a logistics standpoint as well as just being able to reach most of the United States.”
Tommy Gibbons, the agency’s chief working officer, was in Knoxville a few weeks in the past and will probably be shifting there this fall to work on an unannounced undertaking that might take their merchandise to a different stage. Asked about his impressions of the town and the corporate’s future position within the state, Gibbons was upbeat and optimistic.
“It’s a cool city. I’m really interested in what Tennessee has available to companies who are trying to set up a home base there and bring business to that state,” Gibbons says.
“They seem to really have a lot of resources for bringing jobs in and then locating your business there. I think we’ll see in the near future where we could be producing our hemp-based insulation materials in both Idaho as well as Tennessee. So, I think it’s gonna be a good fit for us from multiple standpoints.”
Mead and Gibbons, each 30, have drawn nationwide consideration for his or her Hempcrete product, making the 2020 Forbes “30Under 30” listing for manufacturing. The honor cited their “hemp-based building materials that absorb CO2 emissions and improves insulation.”
“Just being young people, I think we have maybe a little bit of a different perspective than other generations, that we’ve grown up at a time where we can see impacts on the environment,” Mead says of his firm mission. “We can more closely feel them and I think it’s going to be more commonplace for people our age and younger.”
Industry in restoration
News of Hempitecture’s arrival to Tennessee’s white-knuckle hemp trip has been met with open arms from state officers, academicians finding out the plant, and growers and sellers within the standard CBD market.
The Tennessee Department of Agriculture launched its hemp program in 2014 to discover the commercial makes use of with 49 licensed growers scattered throughout the state. When the Farm Bill of 2018 eliminated hemp from the listing of federally managed substances, Tennessee up to date its guidelines, as effectively. Interest blossomed just like the cannabis plant itself.
That 12 months, there have been 226 licensed growers. In 2019 that quantity swelled to three,957 with growers in every of the state’s 95 counties.
But woes hit the business like falling dominoes, and the variety of state-licensed growers plummeted to 1,918 in 2020.
In 2021, there was a slight restoration to 2,008 licensed growers working in all however one county in higher West Tennessee.
Denise Woods, hemp program coordinator for the state agriculture division, chooses to concentrate on the long run moderately than the setbacks of the previous two years.
“Isn’t that exciting? That is very exciting,” Woods says of Hempitecture’s arrival and potential uptick for industrial hemp within the state. She says the business as a complete can study from the previous whereas specializing in future progress.
Highs and Lows
The fluctuating variety of licensed hemp growers in Tennessee from 2015-21:
Source: Tenn. Dept. of Agriculture
“You don’t understand the value of the plant, the plant itself. The fiber portion, the grain, the seed – you know, all of that – was pushed aside by the buzz of the CBD, although I, in no way, want to underestimate the benefits of those qualities of the plant.
“I do think that the fiber, the other qualities of the plant, are making their way. They’re growing steady, they’ve stayed true to the plant and kept moving forward while other folks were distracted by the other news.
“So, it’s exciting to see what’s around the bend for fiber. One of the things that fiber has on the ball that growers for CBD haven’t been able to work out yet is all the standardization of USDA, FDA, DEA.
“Once those standards and requirements are ironed out, fiber is well on its way by having the international … their standards are already in progress. So that’s a real foot in the door that hasn’t happened yet for the other industry.”
‘Nobody has a crystal ball’
Mitchell Richmond, who since April has served because the University of Tennessee’s assistant professor in tobacco, hemp and specialty crops extension specialist, met with Hempitecture’s Gibbons whereas he was in Knoxville.
“I did meet up with Tommy, and he discussed a little about their products with the HempCrete, as well as the insulation (HempWool),” Richmond says, noting his space of experience lies in different facets of hemp.
“Now, as far as the industrial hemp side of things, we do have some trials here at UT. We’re going to be growing some hemp for dual-purpose studies with fiber and grain,” Richmond provides.
“We’ll harvest the grain and the fiber, then we’ll look at maybe as many as 15-17 different varieties and see how they perform under Tennessee’s growing conditions. (But) I have very little involvement right now with anything related to the products.”
Richmond is from Kentucky, which additionally has a giant stake within the ever-growing hemp business. While he has no horse within the race to get merchandise into the fingers of customers, Richmond sees the potential for industrial hemp progress within the state.
“Nobody has a crystal ball to be able to look into the future and tell what it holds,” he says. “But if you look at the history over the last couple of years – and some of the estimations that might be coming out as far as total acreage demanded for CBD – that leaves a lot more room for the fiber and grain,” Richmond states.
“Specifically, if the industry partners that sell these products find markets that they can have a constant source of revenue for, it also opens up the market for producers to sell to them.
“It’s a very interesting crop, and I think there’s a lot more that we need to figure out in terms of how to grow it. I’m an agronomist first, so looking at products is not really my major interest. It’s how do we grow it?
“And as far as Tennessee is concerned, we can grow it well. Finding a market to sell it is going to be the next step, I believe.”
Tough instances throughout
Nemo Solanki prepares oils extracted from hemp at X-tracts LLC in Joelton.
— Photo By Michelle Morrow |The Ledger
The final two years have been agonizing, not just for the skilled hemp farmers who’ve caught with the plant by means of thick and skinny but in addition those that jumped in on the extremely anticipated “green gold rush” of 2019.
Those with little or no prior expertise in hemp rising obtained burned when the CBD craze nose-dived, however those that caught with it suffered, too.
“Farmers are always looking for ways to better their operations, so when hemp made its brand, you know, it had been in the state and there had been much interest for, what, four years, three years, before 2019,” Woods factors out, including that “2019 really pushed it to the forefront.
“The news latched on, the word was out and everybody was so excited. They were really, for the most part, hearing one side of the story. Of course, anytime you go into a new industry, you should be cautious and everyone knows the first soldiers are the bloodiest.
“So that 2019 hemp rush, it had its casualties. But it laid the foundation of what makes hemp such an incredible plant. It’s unchanged by that.”
Grower Ryan Rush, proprietor of Rush Hemp Farms in Maryville, blames the state CDB business’s speedy rise-and-fall issues on “a lot of people” who noticed it as a get-rich-quick alternative.
“A lot of people definitely got on the bandwagon. A lot of people were not prepared for what it takes to fully take their product to market or grow a product that certain processors or end retail users would be wanting,” Rush says.
“A lot of people did find their results to be lackluster and did find those results to be not worth their time and effort. So, a lot of people did jump off the bandwagon.”
Rush provides it wasn’t simply these well-intended people who sophisticated the state of affairs.
“You also had a lot of big-money players come into Tennessee and not do so hot because they just didn’t have the right business plan,” he opines. “Or you had a lot of people also got into this who maybe were not the most enthusiastic about this plant. That can also maybe kind of steer companies in the wrong direction and not knowing what they’re doing or appreciate the kind of positions they are in.
“That definitely showed in some big companies’ end game plans and they fell apart within a year or two years starting up and opening up out here. It definitely got rid of some people on the bandwagon as well – which I’m not going to say is a bad thing.”
How tough has it been?
Rob Mock, proprietor of Urban Horticulture Supply in Chattanooga, is a licensed grower, provider and retailer. He says the 2020 international pandemic hit their business significantly laborious, however that issues existed earlier than the pandemic.
“What I’ve seen with the pandemic, I guess the industry as a whole, I know it started off with what I would consider a lot of capital, a lot of fragmented industry capital with not a whole lot of regulation,” Mock says.
Some of the merchandise obtainable at Stones River Apothecary in Joelton.
— Photo By Michelle Morrow |The Ledger
“So that allowed too many types of different people to grow and cultivate, and what you’ve seeing, basically, was a flood of people learning how to grow cannabis. And basically, dumping a substantial amount of capital into growing hemp for the hope of selling it.
“A lot of people jumped in with no clear avenue of who was going to buy it. So, there was kind of a rush to produce a product – and back then, it was pretty much biomass that was considered for oil production – and then there was a flood to process it and then there was a flood to get a little bit of the product to consumers.”
Mock gives a proof of how drastic the final two years have been:
“In the beginning of the 2016 and even the 2017 seasons, biomass was trading for $20 a pound, which, you know, was relatively good because you consider one or two plants can produce a pound of biomass,” he explains.
“You can do 1,500 to 2,000 plants per acre, so there are very large amounts of money being exchanged for the biomass. In that next year – at least as a wildfire over pretty much the whole United States – everyone produced extremely well.”
But then in late 2019, the hemp-pendulum started to swing the opposite path.
“They grew as much as they could, but that same year it basically crashed. And it crashed because we out-supplied the market,” Mock says of the biomass for oil extraction, which he mentioned fell from $20 a pound to $1-$5 a pound.
Dreams by no means materialized
Joelton’s Sanders has seen individuals dealing with monetary spoil as a result of their plans by no means got here to fruition. The hemp business has “a very challenging question with a lot of parts and pieces,” he says.
“There has been a systemic process of artificial commoditization in a nascent industry before it ever matured,” he explains. “That’s sometimes inexplicable as to why these visions are made the way they are.
“Things have gotten so bad for farmers, processors and even some of the product companies at this point that is almost the question of sanity about why people should continue in this business.”
He pauses and chuckles barely. Laughter eases the ache as he recollects a current dialog with a Maryland farmer.
“(That’s) a little levity but not much … because it’s that serious. I see people who are impacted,” he says. “The farmer I was meeting with almost lost his farm to hemp and growing hemp on the promise that it was going to bring great fortune.
“His story is not unique. I’ve heard it over and over again – people calling me literally in tears or very upset that they’ve been promised monies for their crops that never materialized. And then there are a lot of other things that are going on with the industry that caused this artificial commoditization.”
Blame, finger-pointing and name-calling have grown like weeds as issues have gone from dangerous to worse the final couple of years.
“We call it the race to the bottom – everybody trying to be cheaper than everybody else instead of focusing on what’s important … which would be some kind of sustainable model for all of us so that farmers, processors and retail brands could all make money.
“There’s been a lot of intrusion in our market by opportunistic brokers and other people who cause commotion. So, it’s a very complex explanation that, you know, would require a book-length explanation to make any true sense out of it,” Sanders says.
Optimism amid despair
The hemp business is hoping it’s going to bounce again when the pandemic fades.
“I believe that’s where Tennessee is really going to thrive, in the CBD market, the craft cannabinoid market and, hopefully, eventually, marijuana market,” Rush says.
That additionally contains the commercial facets that Hempitecture is making an attempt to capitalize on with its Knoxville distribution web site.
“There are other companies that are working on the fiber and the seed, and there’s other construction applications,” Sanders says. “I think those are wonderful because that was the actual intent of the industry when we got started. This was an industrial crop with industrial uses and the whole thing with CBD was supposed to be an afterthought.”
Hempitecture officers Gibbons and Mead will surely agree with that.
“I think it’s really important that people know about these building materials happening, and it’s exciting what’s going on Tennessee,” Gibbons says.
“For us, as cliche as it sounds, every day is Earth Day,” Mead says. “It’s doing things that are good for the environment, and this business is designed to, you know, be harmonious with the natural world, and so that’s really our goal.”
That’s additionally the message from state officers Woods and Annie Self, the plant certification director for the state.
“We have a friendly regulatory environment in Tennessee,” Self says.
“I think we’re very excited about the direction of the hemp program,” Woods provides.