Colorado hemp industry growing like weed


In the 17th century, farmers in the American Colonies were required by law to grow hemp, a valuable raw material used to make rope, cloth and parchment. Hempseed oil fueled lamps in colonists’ homes. According to historians, Thomas Jefferson wrote a draft of the Declaration of Independence on hemp paper.

Now, 400 years later, Colorado is leading a reinvention of the hemp industry. Though still in its infancy, it’s an industry that has enormous economic potential.

“Among the products that can be made very cost-effectively are food, lubricants, paints, fuel and building materials,” said David Bush, an attorney with Denver-based Hoban Law Group, a major cannabis practice, and founder of the Industrial Hemp Research Foundation. “The trick is how to do it in an economically efficient manner.”

At the federal level, hemp, which is a non-psychoactive relative of the marijuana plant, is a Schedule 1 substance, meaning it’s illegal because it’s considered to have high abuse potential, no medical use and severe safety concerns. But it is on the verge of being legalized in the 2018 version of the federal farm bill.

Colorado already is experiencing “a green rush, where people are coming here seeking their fortune in some aspect of the cannabis industry,” Bush said. “A lot of people are coming just for hemp.”

If the new farm bill becomes law, and the state can develop the infrastructure and economic incentives for industrial production, “we’ll be a leader in some sense,” he said. “Like any new business, there are lots of challenges to get it going, but the potential is there.”

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Hemp infrastructure

Since 2014, the Colorado hemp industry has grown exponentially.

“There was negligible activity in 2014,” Bush said. “About 200 acres statewide were registered to grow industrial hemp. A small fraction of that was actually planted and harvested. The last I heard, 25,000 acres were registered, of which a substantial percentage is planted. Millions of square feet of greenhouse space also are registered.”

The year-end report from the Colorado Department of Agriculture won’t come out for another couple of weeks, but preliminary estimates are that about 19,000 acres are cultivated.

“The upshot is that almost every year since Colorado opened registration, the number of acres has almost doubled,” said Hunter Buffington, CEO of the Colorado Hemp Industries Association, which represents about 280 producers, processors, retailers and consumers.

Almost 90 percent of the hemp currently grown in Colorado is used for products containing cannabidiol, or CBD, said Duane Stjernholm, founder of the Colorado Hemp Processing Cooperative, a La Junta-based Limited Cooperative Association formed to provide seed-to-sale harvesting and processing services to the industrial hemp industry.

CBD is one of dozens of chemical compounds in cannabis plant varieties called cannabinoids; another cannabinoid is delta-9 tetrahydrocannabinol, or THC.

Both compounds interact with receptors in the brain and central nervous system. The difference is that THC is psychoactive—it’s the substance in marijuana that alters mood and perception, while CBD has no psychoactive properties.

Production of  hemp plants for CBD uses is so high because that’s where the money is. According to a report published Feb. 15 by Hemp Industry Daily, Colorado hemp growers get $5 to $50 per pound for flower, depending on the content and quality of the CBD; $6 to $12 per pound of food-grade seed; and about $200 per ton of baled fiber.

CBD is used in a variety of products, from food to personal care products. It is derived from the flowers of the female hemp plant. But the plant also yields three other materials from which many products can be made.

Small entrepreneurs already are cold-pressing hemp seeds for oil or grinding them for use as an ingredient in protein powder, energy bars and other food products for humans and animals.

But the stalks, which consist of a fibrous outer layer and a woody core, mostly go to waste. Stalk materials, which have thermal and acoustic properties, can be combined with lime to produce hempcrete, incorporated into plaster or made into woolly rolls or panels for insulation or mats for flooring.

“Hemp makes a wonderful water filtration medium,” Stjernholm said. “It can be modified to even filter out radioactivity in water.”

The cooperative’s short-term plan is to build an oven to turn the stalks from legal marijuana and CBD plants into biochar that can be used to improve soil and produce better crops. Stjernholm expects to get the biochar oven up and running within the next six months. Within five years, he is looking to build a large-scale plant that can remove the outer portion of the stalks, a process called decortication.

PureHemp Technology in Fort Lupton, a subsidiary of a firm that developed a process for producing pulp from biomass, has already opened a pilot plant that converts industrial hemp into sugars for hemp beer and ethanol, pulp for paper and lignin, which can be made into plastics and resins.

Regulation of hemp

Growing hemp has effectively been illegal in the United States since 1937. The plant got a brief reprieve during World War II, when farmers could get special permits to grow it for the war effort, but otherwise, the ban remained.

In 1970, the Controlled Substances Act equated industrial hemp with marijuana, classifying both as Schedule 1 substances.

A provision in the 2014 federal farm bill permitted research on industrial hemp by universities and through state-approved programs. Though growing hemp is legal in Colorado and 39 other states, it’s still illegal at the federal level, and most of the industrial hemp used in this country is imported.

“A lot of problems have arisen because of the federal illegality,” Bush said. “It’s difficult to transport hemp to another state. There’s no access to banking, credit is nearly impossible to get, and you can’t get a trademark.”

The farm bill is updated about every five years, and the new bill, formally known as the Agriculture Improvement Act of 2018, would create a regulatory system for hemp that would solve those problems.

The Senate and House passed different versions of the bill earlier this year. A conference committee currently is attempting to forge a compromise.

“The word on the street is that the differences have nothing to do with hemp but are more over other aspects, such as food stamps,” Bush said.

Senate Majority Leader Mitch McConnell (R), who represents Kentucky, another state with a growing hemp industry, “intends to use his influence to keep the hemp provision in the compromise bill. It could get passed this year or the beginning of next year. The prospects look good,” Bush said.

Colorado’s legal definition of industrial hemp as a plant containing less than 0.3 percent THC was established as part of Amendment 64, passed in 2012. Amendment X, passed Nov. 6, changed that from a constitutional definition to a statutory definition.

“If the federal act is adopted, our definition could [have] put us out of compliance and at a competitive disadvantage,” Buffington said.

Amendment X allows the state to modify the definition legislatively rather than through the more cumbersome constitutional amendment process.

Research & development

The Institute of Cannabis Research at Colorado State University-Pueblo is working directly with industrial hemp in a variety of projects.

“The engineering department, in collaboration with a chemistry department member, is looking at incorporating hemp fibers into 3D printing,” said Chad Kinney, director of the institute.

Another interdepartmental project is evaluating the use of industrial hemp to remediate soil contaminated with heavy metals and is exploring other industrial hemp applications.

“We also have folks working on genetic analysis of hemp in collaboration with the University of Arizona, CSU-Fort Collins and [the University of Colorado] Boulder,” Kinney said. “Having that type of information available could be very beneficial in processing plants that could have industrial uses.”

The institute is funded primarily by a state appropriation, with additional funds from Pueblo County. Passage of the federal farm bill could make federal dollars available to expand research at the institute and other institutions of higher learning.

“My impression is that we are ahead of the game from a national point of view,” Kinney said.