A group of investors that includes two prominent Vermont businessmen has reached a tentative agreement to back a hemp farm in Hardwick that is producing pills with a high concentration of a substance claimed to be effective in blocking seizures in epileptics.
The substance — called CBD, or cannabidiol — is also used to treat arthritis symptoms. Although the Food and Drug Administration has forbidden nutritional supplement manufacturers from making health claims about CBD, the Vermont investors hope to tap a burgeoning market for the product.
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The investment group is Evergreen Capital Management.
It includes two successful Vermont businessmen: Will Raap, the founder of the Gardener's Supply Company and the Intervale Center, and Alan Newman, who started Seventh Generation and Magic Hat Brewing. Evergreen will invest $250,000 in Green Mountain CBD, a hemp farm in Hardwick that harvested its first crop last month.
"As we scratched the surface and looked around, we found Green Mountain CBD as a real innovator," says Raap, who helped form Evergreen Capital at the beginning of the year to invest in Vermont’s cannabis industry.
It was hoped that industry would include recreational marijuana but legalization failed in the legislature. Raap and the other investors still have high hopes for another sector of the cannabis industry.
"I think what we’re talking about here is the process of helping a new sector of the economy emerge," says Raap. "I think Alejandro [Bergad] and his Green Mountain CBD business can do that uniquely well because of his smarts, because of his experience, because of his motivation."
Alejandro Bergad is the CEO of Green Mountain CBD and a veteran of the Colorado hemp industry. This fall his company harvested 7,000 hemp plants grown on five acres in Hardwick. The crop was ground up and cooked with coconut oil. The resulting CBD oil filled 14 buckets that were loaded into a Subaru Outback and transported to a Long Island pharmaceutical factory earlier this week.
The first batch of Green Mountain CBD oil will make 300,000 capsules. Each capsule has 20 milligrams of CBD and will sell for a dollar a piece. Green Mountain CBD’s Bergad says that’s half the price of most CBD capsules currently on the market.
"We believe we’re farming more efficiently than anybody in the country in terms of dollars in and milligrams of CBD out," Bergad explains.
With the $250,000 investment from Evergreen the Hardwick hemp farm will double the acreage of its next crop, expand its greenhouse and processing capacity and hire more workers. Green Mountain CBD sells directly to consumers and Bergad says its customers include parents who have been giving CBD to their autistic children.
"We’re seeing a large increase in demand as word gets out," He says. "As we help people, people talk about it and we’re really seeing a grass roots spreading of the word."
Green Mountain CBD plans to grow five acres of hemp in the Champlain Valley next year. That plot will be part of a soon-to-be-formed Vermont Center for Botanical Excellence. Will Raap says that one of the sites under consideration is a farm in Charlotte that wants to downsize its dairy herd and grow hemp and other medicinal crops.
"We’re hoping to break ground next month on a five acre grow," Raap says. "We’re not only going to plant hemp and CBD, we’re hoping to plant burdock root. We’re hoping to plant elderberry and other locally produced medicinal plants. Now, if we do that, we’re going to need a drying facility, we’re going to need a testing facility, we’re going to need a processing facility."
A source who asked not to be identified says Gov. Peter Shumlin's administration is poised to issue a memorandum of understanding directing the Agency of Agriculture to test hemp for THC, the chemical in cannabis responsible for the high, to make sure levels do not exceed .3 percent.
Depending on the amount, hemp with a THC count above that level will either be destroyed or reported to the Department of Public Safety as a law enforcement matter. The governor has also issued a statement saying he supports medicinal and agricultural uses of hemp.
Gardener's Supply Company is a VPR underwriter.