A lot of people grew hemp in 2019, thinking there would be easy money to be made in the CBD industry. However, the market crashed that year due to oversupply, and the number of growers in Vermont has plummeted since then.Many hemp growers and processors are still trying to find their niche in the CBD market, but some are also branching out into industrial hemp. And, some business owners are discovering along the way that their experiences growing hemp translate well in Vermont's legal cannabis industry.
Brandon McFarlane has learned some tough lessons while trying to make a go of it in Vermont’s hemp industry.
"Our business model was to work with farmers in Caledonia County and some of the surrounding regions, and perhaps even in the state, to swap over to industrial hemp from CBD hemp, or to replace their existing hay operations with industrial hemp." - Brandon McFarlane, Zion Growers
“Like many farmers in the area -- really the country -- after the passing of the 2018 Farm Bill, everyone wanted to try and jump into CBD hemp,” McFarlane said. “ And so we did the same thing and found a lot of the same problems that other farmers had: It was just hard to get rid of after we grew it.”
The Farm Bill that McFarlane is talking about was the federal rule that legalized hemp production across the United States.
Vermont first issued hemp permits to farmers in 2013. But after the crop was legalized nationwide, small hemp farms in Vermont had to compete with huge commercial farms across the country.
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That lead to a lot of people, like McFarlane, losing money.
But McFarlane still sees a future for the plant, and he thinks industrial hemp, which is used for things like rope, fiber and even building materials, can be grown here.
“Our business model was to work with farmers in Caledonia County, and some of the surrounding regions, and perhaps even in the state, to swap over to industrial hemp from CBD hemp, or to replace their existing hay operations with industrial hemp,” he said.
The St. Johnsbury Development Review Board recently gave conditional approval to McFarlane’s company to use an old grain mill in town for an industrial hemp processing plant.
And if the plan comes together, McFarlane says it will be a place where farmers can bring their industrial hemp to turn it into the raw product, that is then made into things like paper, fabric or construction materials.
McFarlane thinks if there were a facility like the one he's talking about in Vermont, then more people would grow industrial hemp, which could then lead to all sorts of other entrepreneurs coming up with ways to use the plant.
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“This really is a catalyst, as I was saying earlier, like [for] further innovation and further use,” McFarlane said. “But this is really where the gap is, right now, in the entire production cycle; is someone to actually take the raw product and break it down into components that can then be turned into something else.”
Stephanie Smith is Cannabis Quality Control Policy Administrator with the Vermont Agency of Agriculture, Food, and Markets. She said the sort of innovation McFarlane is talking about is already happening elsewhere.
"You know people are still finding their way, and getting better at what they do. And I think it will continue to be a crop on the Vermont agricultural landscape."- Stephanie Smith, Vermont Agency of Agriculture, Food, and Markets.
“There’s innovation happening in the United States. I’ve heard of a company that’s taking hemp fiber -- the long fibers, the stalk -- and manufacturing it into flooring materials in a sustainable manner,” Smith said.
As the the CBD market levels off, Smith thinks there will be more interest in growing industrial hemp.
“There are companies that are chipping the fiber into short fibers to make animal bedding, and I believe there’s a market for that,” she said. “There is technology out there, it’s just a matter of creating it in the United States and in Vermont.”
There are about 350 acres registered in Vermont this year to grow hemp, just a fraction of the more than 1,600 acres that were in cultivation last year.
And the number of people registered to grow or process hemp this year has dropped by about half, to just under 300.
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Smith says most of the growers are registering an acre or two, and not the larger tracts that farmers used for hemp during the boom year in 2019.
She says some of the farmers and entrepreneurs who got into the CBD business are surviving.
“You know, people are still finding their way and getting better at what they do,” Smith said. “And I think it will continue to be a crop on the Vermont agricultural landscape.”
In 2019, a lot of farmers were left holding their hemp crop because the processors were either backed up with too much product, or the money was just not there to make it economically feasible.
But Karen and Cam Devereaux, who run Northeast Kingdom Hemp in Barton, invested in their own processing equipment. They were able to process what they needed, and continue to serve their customers.
Devereaux says a lot of people jumped on board to make a quick buck when hemp was first legalized, and she thinks small businesses like hers now have space to grow at their own pace.
“The message that the media put out there was, ‘Come to Vermont and grow hemp because there’s money in it,” Karen Devereaux said. “So we thought somebody knew something. But I don’t know anybody, any of those farmers that grew those 10 and 20 acres that have had much success with selling it.”
Now, the family is taking the lessons they learned growing and processing hemp and getting ready for the legal cannabis industry here in Vermont.
Devereaux’s husband Cam says the same equipment they use to extract CBD oil from hemp can be used to extract THC oil, which is used in edibles.
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“I thought it was going to be the same way, but our lawyers tell us it isn’t. They tell us it’s going to be a profitable business, and there’s going to be a lot of money. 'It’s not going to be like hemp,' they said," said Devereaux. "Now, I thought it was going to follow the same thing. They’re going to let everybody grow, everybody’s going to grow, they’re going to flood the market. Personally, that’s the way I felt. My lawyers are telling me different.”
In fact, the Devereaux are actually planning an expansion project at Northeast Kingdom Hemp.
And as pandemic restrictions ease up across the country Karen Devereaux says she’s looking forward to hitting the road again, to go to craft fairs and events and visit newly re-opened stores to find new customers for her CBD oil.
Have questions, comments or tips?Send us a message or get in touch with reporter Howard Weiss-Tisman@hweisstisman.
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