Staunch opposition by Southeast Colorado Springs residents has prompted a hemp processing company to drop a proposal to put a CBD extraction operation into an industrial site on Aeroplaza Drive.
The leaders of Veritas Farms, a hemp growing and processing business that produces CBD-infused products such as tinctures, salves, lip balm, moisturizing lotion and edibles for people and pets, have decided to keep the extraction part of their business on their property near Pueblo.
Veritas, which is leasing the 61,600-square-foot building at 1225 Aeroplaza Drive, instead plans to use it as a manufacturing and distribution center.
After CBD oil is extracted from the hemp that Veritas Farms grows, it will be transported to Colorado Springs and mixed into the products Veritas sells to clients including King Soopers, Rite Aid, Kroger and CVS.
Colorado Springs Planner II Rachel Teixeira received numerous letters and emails after she sent out a notice informing nearby residents of plans for the building, which is zoned for industrial use.
“I have read every single one of the letters that came to Rachel’s office,” Rianna Meyer, vice president of operations for Veritas Farms, said at a neighborhood meeting Sept. 9 at the site. “Our company is very family-oriented; we believe strongly in the communities we serve. We have chosen to take extraction off the table.”
Veritas Farms now does all extraction and mixing of products in Pueblo County, COO Dave Smith said.
“We’re currently using this facility for shipping and receiving,” he said. “We’ve decided [extraction] is not the best thing to be a good neighbor.”
Most of the 50 residents who attended the meeting did not seem reassured.
Veritas Farms uses ethanol to extract the CBD from the hemp plants it grows. According to Marijuana Business Daily, the process involves soaking raw cannabis in ethanol, also called ethyl alcohol or grain alcohol. The resulting liquid is filtered and the alcohol removed.
When done correctly, the process is considered safer and more efficient than other methods.
Ethanol extraction is not without risk, however. Ethanol is highly flammable, and producers must use sophisticated equipment to keep it confined.
The federal Occupational Safety and Health Administration strictly regulates storage of ethanol in production facilities and requires adequate ventilation to protect employees.
Those concerns are among the reasons why Southeast residents were worried about Veritas’ plans for performing ethanol extraction at the Aeroplaza facility.
More than a dozen neighbors contacted the Colorado Springs Planning Department after the property owner, David Jenkins, and consultant YOW Architects applied in July for a zoning variance for “a marijuana processing business” using ethanol extraction.
“This plant will be putting out ethanol emissions that are harmful,” Paul and Pat Long wrote in a letter to Teixeira. “Our property will be harmed by those emissions, because our property is only a few hundred feet from the source of those emissions.”
Other citizens objected to the presence of a marijuana-related business near two churches and the Boys & Girls Club of the Pikes Peak Region, and feared its effects on traffic, crime and their property values.
“I am concerned about the potential smell from the facility,” wrote Melissa Peltier, who lives in the nearby Colonial Park subdivision. “A strong smell from this facility could severely impact our home values and quality of life.”
The building’s previous tenants have included paint and industrial ceramics operations that produced unpleasant odors, residents said.
At the Sept. 9 meeting, Meyer said the variance request would be withdrawn and that the company would instead apply “as soon as possible” for conditional use approval, which is required by the city when hemp or marijuana products are involved and would include a public hearing before the city planning commission.
The operation would run two or three production lines in two shifts to mix the extracted CBD oil with other natural ingredients such as coconut oil and beeswax. The finished products would be packaged, stored and then shipped from the building.
There would be no smells or emissions, Meyer said, adding that she did not expect the business to add substantially to traffic in the area because trucks would deliver materials only once a day.
When fully operational, the plant would employ 30-35 people, Meyer said.
“We employ 100 people on our farm,” she said. “We’re trying to employ people in our communities. … We need to get quality people, and we already have employees from Colorado Springs.”
These will be “decent jobs,” Smith said, with “competitive salaries” and benefits for employees.
The Aeroplaza site was chosen in part because of its potential to house expansion of the business.
“We are preparing for growth, five years from now when the industry blows up,” Meyer said.
“It’s a little hard to find places where the market is good,” Smith said. “We’ve been looking since September of last year.”
After the meeting, Peltier said some of her concerns were alleviated but she was still troubled about crime and property values.
“While we understand the difference between marijuana and hemp, some people don’t,” Peltier said. “We had a drug treatment facility move in on Jet Wing, and we are already seeing an impact on our property values.”
Industrial hemp industry poised for huge growth
The passage of the 2018 Farm Bill by the U.S. Congress opened the door to cultivation of industrial hemp nationwide.
But Colorado legalized both hemp and marijuana when voters approved Amendment 64 in November 2012.
In 2017, farmers planted nearly 12,000 acres of industrial hemp in Colorado, which led the nation in industrial hemp production, according to the state Department of Agriculture.
By early 2018, more than 31,000 acres of hemp were cultivated, and the department projects that more than 50,000 acres could be sprouting hemp by 2020.
Growing industrial hemp is no stroll through the field, however. Farmers have to carefully control all aspects of the growing process, and they are subject to stringent state regulation.
Hemp and marijuana come from the same cannabis plant. The difference is in the amount of THC they contain.
Formally called delta-9 tetrahydrocannabinol, THC is the psychoactive substance in marijuana that gets users high. The farm bill removed hemp from the federal controlled substance list, but marijuana remains a Schedule I substance, defined as drugs with no medicinal use and high potential for abuse.
To be classified as industrial hemp, cannabis must contain less than 0.3 percent of THC. Under Colorado and federal law, cannabis with more than 0.3 percent of THC is considered marijuana. The Colorado Department of Revenue has jurisdiction over marijuana.
Amendment 64 directed the legislature to enact rules governing the cultivation, processing and sale of industrial hemp.
According to Colorado.gov, legislation adopted in 2013 gave the state Department of Agriculture responsibility for establishing registration and inspection regulations for cultivation of industrial hemp.
The department regulates only the cultivation of hemp and does not have authority over processing, sale or distribution.
Anyone who grows industrial hemp must register with the state at least 30 days before planting a crop and pay an annual fee to the state. Growers can register as commercial growers or research and development industrial hemp producers.
Registrants must provide a report verifying that their crop will not contain more than 0.3 percent of THC and stating the intended end use for the cannabis plants they grow.
Another report must be submitted within 10 days after planting, describing all the cannabis varieties planted. At least 30 days before harvest, commercial registrants must provide documentation that they have entered into a purchase agreement with an in-state industrial hemp processor, or a statement of the intended disposition of the crop.
All registrants are subject to routine inspection and collection of samples to verify that their cannabis does not exceed 0.3 percent THC. The department of agriculture can inspect and take samples without prior notice if it’s believed that a grower is violating the rules.
The state tests the samples, and if the plants contain more than the allowed amount of THC, a grower’s registration can be suspended or revoked.
Registrants pay for costs to the state, including inspectors’ drive time, mileage and hours spent performing the inspection and sampling, as well as lab costs.
Failure to comply with the regulations or to provide any information requested by the department can result in civil penalties up to $2,500 per violation and disciplinary sanctions that may include suspension or revocation of the registration.
The state does not regulate hemp processing, but many local jurisdictions have enacted rules concerning growth and processing.
Besides THC, the cannabis plant contains many other compounds, including cannabidiol, or CBD. Unlike THC, CBD does not make a user feel stoned or intoxicated.
CBD is purported to have many medicinal effects and is commonly used to treat seizure disorders, anxiety, pain and other conditions.
Research is ongoing to determine exactly how CBD works in the body and its efficacy in treating various physical and mental ailments. The Institute of Cannabis Research at Colorado State University-Pueblo is among the institutions doing groundbreaking studies.
For now, producers are not allowed to make any therapeutic claims about their products containing CBD.
Nevertheless, CBD-infused tinctures, lotions and creams have gone mainstream, and industry analyst The Brightfield Group projects that U.S. sales will grow to $22 billion within the next couple of years.
CBD is by no means the only product that can be derived from the hemp plant.
Hemp also can be used to produce commercial and industrial products including textiles, clothing, paper, bioplastics, biofuel and building materials such as insulation and hempcrete. It also can be used to purify water and soil.