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Georgia's sprouting hemp industry attracts Canadian hemp grower (Photos) 

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Georgia Department of Agriculture

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University of Georgia

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By Alex Gailey  – Restaurant/Airport reporter, Atlanta Business Chronicle

11 hours ago

 

Georgia's sprouting hemp industry has attracted a big investment by a major Canadian hemp grower.

A new state law signed by Gov. Brian Kemp in May legalized hemp farming in Georgia. Growers licensed by the Georgia Department of Agriculture will soon be allowed to grow and process hemp in Georgia.

Hemp is used to produce cannabidiol, or "CBD", the active ingredient in oil and foods that continue to grow in popularity across the country, but Georgia licenses won't be issued until state regulations are finalized later this year.

British Columbia-based Village Farms International Inc. (Nasdaq: VFF) reported July 11 that the company "is now well advanced in planning and engineering work to establish its centralized [CBD] extraction operations, which will be based in Georgia." The facility is expected to be operational in the first quarter of 2020.

 

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In March, Village Farms formed a joint venture with Georgia farming company Nature Crisp, which has already started to plant 700 of acres of hemp in Virginia, North Carolina and South Carolina, and plans to grow roughly 1,000 more acres of hemp in Georgia in 2020.

Led by University of Georgia graduate Phil Jennings IV and his father Phillips Jennings III, Nature Crisp is one of several of their agriculture businesses. The Jennings family has grown dozens of crops (vegetables, soy beans, corn, wild blueberries, etc.) over the last 10 decades.

Village Farms International gave Nature Crisp roughly $15 million to cover start-up costs and generate working capital. Jennings IV said many of the farmers they have partnered with in other states have taken their knowledge and transferred it to hemp, which is a crop that can be grown almost anywhere.

 

"We're in this for the long haul," Jennings said. "I think what Village Farms brings to the table and what Nature Crisp brought to the table was a great marriage to be able to build an exceptional outdoor growing company for hemp. My background and my dad's background in outdoor farming stretches back for our entire lives, and then you've got Village Farms that's been an innovator in the farming space for 30-plus years."

Nature Crisp owns 35% of the joint-venture company, called Village Fields Hemp, while Village Farms International owns 65% of it.

Village Fields Hemp is growing hemp across several states, but wants to produce the largest acreage and build a roughly 25,000-square-foot centralized extraction facility in Georgia. Jennings said the facility will be able to extract thousands of acres of hemp grown in Georgia and across nearby states, although the company would need more capital to build and hasn't decided on its exact location.

 

"The initial size of the extraction facility is going to be around 20,000-30,000 square feet, and we'll expand on that as we grow, but it is a multi-million dollar investment so there will need to be additional capital raised," Jennings said.

Hemp is a member of the cannabis plant family, but unlike marijuana it includes only trace amounts of THC, the compound that gives marijuana its high. CBD may contain no more than 0.3% THC.

Georgia is the 41st state to establish a hemp program.

Farmers can harvest three types of hemp: fiber; grain or seed; or floral material extracted for plant resin, including CBD. Hemp is used in more than 25,000 products, including textiles, biofuel, ropes, cosmetics, food and beverages, but Jennings wants to focus on CBD extraction.

 

The CBD business is booming. CBD oil is already a popular product sold in Georgia, but it's currently imported from other states.

Nationally, there are still broad concerns about companies following testing protocols for CBD products, and the U.S. Food & Drug Administration accepted public comments through July 2 to determine if and how it will regulate the CBD industry.

"We've have had a lot of inquiries from companies wanting to be licensed to put CBD in their food products. We continue to tell them that until FDA recognizes CBD as a 'generally recognized as safe' food, we are not able to issue them a license to manufacture foods using CBD as an ingredient," said Julie McPeake, a spokesperson for Georgia Department of Agriculture.

 

When asked about CBD regulation, Jennings said everybody in the industry calls it the "wild west."

Once the state government creates regulations, CBD will be able to be manufactured in-state by farmers who receive a hemp growing license, which costs $50 per acre annually.

"We are still in the beginning stages for the adoption of the rules and regulation for the licensing of production and processing of industrial hemp in Georgia," McPeake said.

She added that the state could begin reviewing hemp licenses in a few months, likely around October.

Allison Margolin, a well-known cannabis lawyer based in Los Angeles, is currently helping a Candler County, Ga., farmer navigate what can be a fraught licensing process.

 

"You definitely have to pay a lot of fees, but the hemp requirements aren't as complicated as the medical marijuana requirements," Margolin said. "They can likely process the applications more quickly, and maybe they can start growing as early as January. It's a huge industry and has a lot of potential in Georgia."

Jennings hopes state government regulations are finalized by the end of the 2019 in order to start growing and processing hemp by next year.

"As long as we get our licenses in 2019, then we're okay to start growing season in spring 2020," Jennings said. "I'm just short of a guarantee that we will grow in 2020."

Although Georgia has been slower to adopt hemp farming, Jennings said the state could catch up quickly.

"I take a lot of pride in Georgia, and I would love to be able to grow 1,000 acres of hemp next year," Jennings said. "I don't think there's going to be any shortage of farmers wanting to grow in the state of Georgia next year."