CBD Products A Prominent Piece Of Vermont's Expanding Hemp Industry

Oct 9, 2018

As the harvest nears a close, 2018 is turning out to be a pivotal year for industrial hemp in Vermont. More people are growing it than ever before and millions of dollars are being invested in hemp farms and in the industrial labs needed to extract CBD from hemp.

CBD, which stands for cannabidiol, is a completely legal compound found in hemp and is not psychoactive, which means it won't get you high. It's been showing up in retail shops across the country.

Nowhere is Vermont's booming hemp scene more evident than in Hardwick where the company Green Mountain CBD is based. It grew 40 acres of hemp this year in Hardwick and Hyde Park. But unlike Vermont's other hemp growers, Green Mountain CBD is also processing hemp oil and manufacturing CBD capsules and tinctures on the farm.

“I think that we're really just working with something that's been around for ages,” said CEO Alejandro Bergad, who has experience growing hemp out in Colorado.

Bergad and his partner Jacob Goldstein have made the Hardwick hemp farm a leader among Vermont hemp growers. They've put up two buildings for manufacturing on the Hardwick farm and a 20,000 square foot drying facility that dries hemp plants in 24 hours — hemp has to be dried before it's processed.

Bergad uses a touch screen to start a $150,000 assembly line that caps and labels bottles of CBD capsules. “This line right now is spitting out about a thousand bottles an hour,” Bergad explained as the white plastic bottles rolled by.

Alejandro Bergad, left, and Jacob Goldstein of Green Mountain CBD in front of a hemp field in Hardwick in July.
Credit Jon Kalish / For VPR

Green Mountain CBD currently produces 60,000 capsules a day but plans to scale up to a million capsules a day next year. The company, which will change its name to Sun Soil, opened an office in Burlington and plans to double its acreage in 2019 — possibly to the Champlain Valley — thanks to a $5 million investment from an out-of-state venture capital firm.

Expansion in hemp growing and processing is happening all over the state.

“Our hemp registry has exploded,” reports Cary Giguere, who runs the Vermont Agency of Agriculture's hemp program. “This year we've got nearly 400 folks growing hemp and it's almost 3,000 acres.”

Giguere is also a hemp farmer in Washington County, where he's partnered with the New Mexico-based hemp advocate Doug Fine.

The Vermont Legislature authorized hemp cultivation in 2013 and a handful of hemp plots were grown in 2014. Statewide the acreage devoted to hemp this year has quadrupled last year's figure. The acreage devoted to hemp in the U.S. more than doubled this year and has reportedly tripled in a couple of western states.

Cary Giguere is the director of the Vermont Agency for Agriculture's hemp program, as well as a hemp grower himself.
Credit Jon Kalish / For VPR

In Vermont, hemp farmers have paid as much as $500 per pound to have CBD extracted from dried hemp flower using a method that involves carbon dioxide.

Until this year there were extractors serving both the medical marijuana and hemp industry in Waterbury and Milton. But new extractors opening in South Burlington and Brattleboro in time for the fall hemp harvest are expected to lower the cost of CBD extraction.

One of the new extractors is housed in what once was a bakery that produced Twinkies in Brattleboro. Northeast Processing's new facility dwarfs the capacity of Vermont's other extraction labs. The company's CEO, Carl Christiansen, has a Ph.D. in chemistry and contracts with 50 Vermont hemp farms.

“We see hemp as being something that could be quite advantageous to the state because the state needs new revenue,” said Christiansen, “[Vermont] needs new industry but it doesn't want to abandon who it is. And we see hemp as being a really important market for the state because we can still stay true to what Vermont is all about.”

According to Christiansen, some of the $2 million invested in his start-up came from a hemp grower. He expects Northeast Processing's customers will include farmers and CBD product producers who don't necessarily grow hemp.

Carl Christiansen at the former Twinkie factory in Brattleboro that has been converted into the Northeast Processing company's headquarters.
Credit Jon Kalish / For VPR

“There's a lot of farmers who just want to focus on being farmers, and so we'll purchase that product and we'll turn it into oils and then we'll go and then sell that on to product producers who may not want to farm,” said Christiansen. “And we think that that's an important part of the marketplace as well.”

The technology to process hemp for CBD extraction is extremely high-tech, but turning hempseeds into food is anything but.

At the 7,000 square foot Victory Hemp Foods plant in Middlebury, hempseeds are de-hulled before being pressed. The pressed seed, which is known as cake, is ground and sifted to make hemp flour that is 50 percent protein.

The equipment in this Middlebury plant belonged to Full Sun, a local seed oil company that went out of business. It was purchased by the Kentucky-based Victory Hemp Foods, whose chief operating officer is Chris Bailey, the founder of Vermont Smoke & Cure in Hinesburg.

“We're having very good demand for the hempseed oil,” said Bailey. “Everyone from people that are using it as a carrier oil for CBD to other food manufacturers and to health and beauty folks using it for soaps and skin care.”

Victory Hemp found only one farmer in Vermont willing to grow hemp as a grain crop. Everyone else is growing hemp for CBD. A 24-year-old farmer named Sam Bellavance grew 10 acres on a thousand-cow dairy farm in Alburgh. Victory Hemp is buying his crop and plans to buy seed from farms in Maine and upstate New York.

For now, though, almost all of Vermont's hemp farmers are hoping to cash in on the “CBD gold rush.” The market research firm New Frontier Data, which focuses on the cannabis industry, estimates that Americans spent $367 million on CBD products last year and expects sales to top a billion dollars by 2020.

The market research firm New Frontier Data, which focuses on the cannabis industry, estimates that Americans spent $367 million on CBD products last year and expects sales to top a billion dollars by 2020.

At the UVM research farm in Alburgh there were 2 acres of hemp planted in 2018. Not all of it was for CBD research.

“We've got two different varieties of fiber and three different varieties of grain,” explained Abha Gupta, the crops and soil coordinator for UVM Extension“They were planted out at three different planting dates.”

Agronomist Heather Darby thinks that the widespread availability of hempseed, along with an official state research and development program for hemp created by state lawmakers, is responsible for growing interest in the crop. Darby said many Vermonters have been calling her for advice.

“Most people are looking for markets,” Darby said. “Some of the questions are, 'Is this a real opportunity or is it just a bubble we see floating by?' You know, 'Where can we actually tap into this?' And the markets are really still developing, especially if we're not talking about CBD production."

But CBD, of course, is what everyone's talking about. Although the FDA forbids claims about CBD's purported health benefits, demand for CBD as a treatment for pain, anxiety, insomnia and other woes is growing.

A supercritical carbon dioxide extractor used to extract CBD from hemp flower at the Nutraceutical Science Laboratories in Waterbury. It has a half-million dollars worth of lab gear and plans to spend hundreds of thousands more for new equipment.
Credit Jon Kalish / For VPR

Kalev Freeman, a physician and scientist affiliated with the Nutraceutical Science Laboratories in Waterbury, plans to conduct research on CBD's effects on animals.

"CBD has not met the most rigorous levels of evidence, which would be randomized control trials at multiple centers. CBD hasn't met that criteria yet,” noted Freeman. “Stepping back, however, there's historical and anecdotal and case report data that is so overwhelmingly in support of CBD's benefits, that it's very hard to say that there's no evidence for it."

No wonder, then, that a cottage industry has sprung up in Vermont producing a wide array of CBD products: capsules, tincture, dog treats, body creams, beverages and candy.

At Nutty Steph's in Middlesex you can buy CBD-infused chocolate in various doses and shapes.

In July, Jacqueline Fernandez-Riki, who owns the shop, said that CBD products were 30 percent of Nutty Steph's sales after being introduced introduced six months prior.

Asked about her 3-ounce CBD chocolate bar that sells for $20, Fernandez-Riki said, “This is very much more than a chocolate bar.”

Although chocolate contains caffeine, people suffering from insomnia have found CBD chocolate helps them to sleep, Fernandez-Riki said.

CBD is also showing up in honey, coffee and tea.

Nutty Steph's owner Jacqueline Fernandez-Riki holds a pan of CBD chocolate hearts.
Credit Jon Kalish / For VPR

Joe and Rebecca Pimental have been growing hemp at Luce Farm in Stockbridge. They pay to have the CBD extracted from their hemp.

The Pimentals opened a commercial kitchen in Bethel to make CBD balm, honey and tincture. They had collaborated with Long Trail Brewery on a CBD beer dubbed "the Medicator," but it was ordered off the market by federal authorities.

Their CBD is now used in a cold brew made by Abracadabra Coffee in Woodstock, and it's an ingredient in tea and a tea/juice blend made by Dobra Tea and Tomgirl in Burlington.

“Both of those companies use our CBD-infused honey,” said Rebecca Pimental. “I think you're going to see it everywhere.”

At the Green State Gardener store in Burlington, owner Dylan Raap says his company will sell a million dollars in CBD products this year. He has his own line of CBD edibles, which includes a $50 bottle of CBD gummies.

“We're seeing boomers come in for joint pain,” Raap said during an interview at the store on Pine Street. “But we're also seeing a lot of millennials, and really everybody, coming in for anxiety and just the mood-stabilizing effect that CBD has.”

Raap will soon release CBD-infused sparkling water and soda.

“As a product class, I think the sky's the limit for CBD,” he said.

There is another store specializing in CBD products in Burlington run by the Champlain Valley Dispensary. Other stores in Lyndonville, St. Albans, Brattleboro and Middlebury are solely devoted to hemp or CBD products.

Shayne Lynn, the executive director of the Champlain Valley Dispensary, which also has a store in Brattleboro selling CBD products, complains that profit margins are tight. He suspects that prices for CBD will drop as the hemp supply grows.

“You gotta think, hey, Kentucky, then you gotta think Colorado,” said Lynn. “This is really a world marketplace. And so, how are the Vermont farmers going to compete outside of Vermont?”

Another cannabis cognoscenti who thinks hemp prices will drop is Joel Bedard, the founder of The Vermont Hemp Company.

"Everyone's so excited about cannabinoids and they want to try and make some good money first and then when it all stabilizes, they're going to realize, 'OK, this actually is a food crop.' This is so much more than just cannabinoids." — Joel Bedard, The Vermont Hemp Company

“Everyone's so excited about cannabinoids and they want to try and make some good money first and then when it all stabilizes, they're going to realize, 'OK, this actually is a food crop,'" said Bedard. "This is so much more than just cannabinoids.”

CBD, of course, is not the only cannabinoid. Other cannabinoids with reputed medical benefits include CBG and CBC (not to be confused with the Canadian Broadcasting Corporation).

At the second annual Hemp Fest gathering, organized by Heady Vermont last month, the keynote speech was given by Seth Crawford, an Oregon hempseed breeder who predicts that CBG is poised to take off.

In an interview after his speech, Crawford noted that the crystalline form of CBD sells for as much as $5,000 a pound and the crystalline form of CBG goes for triple that amount. Crawford said that the crystalline CBC sells for around $45,000 a pound.

“As new cannabinoids become available, they become expensive,” Crawford explained. “When these new compounds come on-line, it's substantial amounts of money that can be made by farmers in this industry.”

Crawford's Oregon-bred hempseeds account for about 50 acres of this year's Vermont hemp crop.