As one of the first states to legalize recreational cannabis, Colorado is well-positioned to make hemp its next big industry. At least Deepank Utkhede, director of the new CBD processing start-up Vantage Hemp Co., thinks so.
The CBD extraction company was set to start production last month in Greeley, but the COVID-19 outbreak has delayed its original timeline. Utkhede said once social distancing is no longer necessary and the company can begin production, the high-volume extraction company will be a leading supplier of CBD-hemp, as well as information about the best extraction science.
This could be a benefit to hemp growers in other parts of the state, who are jumping into the market without understanding the proper methods to keep THC levels under the legal limit.
“One thing working against growers are the restrictions on THC,” Utkhede said. On the federal level, CBD derived from hemp is legal if THC levels are below 0.3%, which is a “very difficult number to maintain,” Utkhede said.
If inspectors find the THC level to be beyond the 0.3% limit in a farmer’s crops, the crops must be destroyed. It’s also hard to grow hemp because it is difficult to find pure hemp seeds, and processing it can be costly and exasperating to learn.
Utkhede said the logic behind the 0.3% legal limit is not based on science, and “even if the plant contained 1% THC, it would not be enough to get high off of.”
But CBD, extracted from the hemp plant, is growing in popularity to treat conditions like arthritis and anxiety. The 2018 Farm Bill removed hemp from the controlled drug category and labeled it a regular crop because the plant won’t cause a high like a marijuana plant will.
Vantage Hemp Co. aims to provide the raw materials of CBD-hemp that others convert into final products for sale.
“Our primary driver for hiring high-quality people with scientific backgrounds in an industry that is so new is to drive data,” Utkhede said.
The Vantage Hemp Co. team includes people like Daniel Chinnapen, a former Harvard Medical School professor, as chief scientific officer to analyze and maximize efficiency in CBD processing.
“What we are doing is extraction driven by science,” Utkhede said.
Forging a clear path and guidelines for hemp farmersScott Perez, a hemp grower and agricultural consultant in the Durango area, said the Vantage Hemp Co. facility may be “a benefit to local farmers in the long run if they can find a good way to extract.”
But Perez warns there are many different growing climates in Southwest Colorado – harsher climates than the Front Range. The plants Vantage Hemp Co. grows may be too weak to handle climates on the western side of the state.
And hemp farmers who got into it for CBD last year didn’t make out like they had hoped, Perez said.
Brian Koontz, industrial hemp program manager with the Colorado Department of Agriculture, said there is not a sufficient availability of processors or testing labs in the southwestern part of the state. Growers have few resources for selling or extracting the CBD from their crop.
Utkhede said his new CBD processing facility located in Greeley would reduce shipping costs, but Koontz speculated there is a chance that having a large processor on the eastern side of the mountains could squeeze out the many small-scale farmers in the west.
But any research done on hemp is helpful so growers can produce and process their crops more efficiently, Koontz said.
Federal laws ‘killing the industry’Perez said what’s really hurting the market are the restrictions at the federal level on cannabis.
The 0.3% THC limit is “completely ridiculous and killing this industry,” he said.
“No one is going to be smoking even 5% THC,” he said. “We are way past that these days.”
The Colorado Hemp Advancement and Management Plan, created by key stakeholders in the industry statewide, has proposed state legislation that would create research and development infrastructure for the crop – key information not included in the new Farm Bill guidelines for hemp.
Koontz said support for the legislation is promising, but the state Legislature is waiting to see when and how it will proceed. It has been stalled by the COVID-19 outbreak.
“There’s a lack of direction for research and development from the FDA, and as far as 2021, there is no allowance for it,” Koontz said. “The FDA doesn’t seem to be encouraging it.”
Emily Hayes is a graduate student at American University in Washington, D.C., and an intern for The Durango Herald.