Today, we have the pleasure of being able to publish an interview with Future Farm’s Derek Ross who has been the key player in the company’s industrial hemp business.
We are excited by this high growth vertical and see it as a significant growth driver for the overall company. Derek, it is great to connect with you and we appreciate you being a part of this interview.
Our readers have been very excited by Future Farm’s industrial hemp business and so are we. 2018 has been a major year for Future Farm’s hemp business. Please tell us about the state of current operations and where this emerging growth vertical is going?
I’m excited too! And thank very much for considering me for this interview. We applied for and were granted three industrial hemp licenses in the state of Maine. One license is for our previously announced 120-acre Amity farm, which will be dedicated to feminized seed production during the 2018 season. A second license is for Heresy, Maine where we have entered into a contract with local farmers to lease 100 acres of organic certified land. This farm will be dedicated to organic CBD production. The last license was awarded in Belfast, Maine for our 60,000 sq. ft. facility of which 12.800 sq. ft. is being built out right now. This facility will serve as our processing and production facility where we will germinate over two hundred thousand seedlings and process metric tons of high CBD hemp biomass. In the first phase of the build-out we will be building a propagation space capable of germinating 200,000 seedlings per run. The next phase of the build-out will be our processing and extraction lab, which will be capable of processing over 500 pounds of biomass an hour. In 2018, we are projected to produce 150,000-200,000 pounds of organic, high CBD biomass and harvest over 75,000,000 organic, hemp certified feminized, high CBD seeds. Next year we want to be a resource for local farmers to obtain feminized compliant CBD hemp seeds and be an avenue of distribution for them as well. We truly believe if we can let the farmers do what they do best, which is farm, we can make a significant impact to the agricultural community here in Maine.
Derek, you have an impressive track record of success and have been laser focused on a huge growth initiative. Can you please tell us a little about your background and how you became a leader in the industrial hemp industry?
It all started thirteen years ago when my life became consumed by the cannabis space. I’ve been living and breathing cannabis every day since. Cannabis and hemp are very much similar and when the Farm Bill passed, I saw opportunity. My goal was to develop a strain that would look, smell and grow identical to cannabis but have less than 0.3% THC. It also needed to contain the highest amount of CBD possible and thrive in the northeastern hemisphere. In 2015 I acquired a strain that I was comfortable using as the foundation of this genetic roller coaster ride soon to come. Trial after trial, the THC climbed down into compliance. Roughly a year later after a lot of hard work I had my unicorn. It tested at over 25% CBD and 0% THC. This was ground breaking! Test results like this would yield us double the amount of CBD per acre then any of the average hemp-compliant strains on the market. This strain was the beginning of my industrial hemp career. This year we will stabilize and back breed this strain to produce some of the highest CBD seeds in the world that are feminized, hemp-compliant, and organic.
In the 1930s, Popular Mechanics called industrial hemp a billion-dollar crop. We believe this opportunity is significantly larger due to the known uses of hemp and the incredible applications of it. Can you please tell us how Future Farm plans to take market share in this massive market?
The opportunity is much larger and is growing rapidly. “Cannabis research firm Brightfield Group estimates that the U.S. market for hemp-derived CBD hit $291 million in 2017 and will balloon to $1.65 billion in 2021.” This is growth of more the 500% in only four years!! Future Farm this year will focus on CBD and organically certified, feminized seed production while building infrastructure to participate in other hemp product markets. In 2019, we will switch gears and add two major hemp products that will include the cultivation of CBG, which is an additional cannabinoid found in the cannabis plant and has been gaining serious traction. We also have been exploring industrial hemp fiber production to be utilized in nontoxic, biodegradable child resistant cannabis packaging. The average human throws away 185 pounds of plastic a year. Hemp can fix that.
The future will include genetics specifically grown for individual cannabioids, like CBG and CBN, as well as terpenes, fiber and pulp for clothing, fabrics, paper products, building materials, hemp-based sustainably grown biodegradable plastics. These different genetics will be part of a rotation to be able to produce a variety of products.
Where do you see some of the biggest growth opportunities for Future Farm and what are some potential catalysts for the hemp business.
The biggest growth opportunities for us are right here in the northeast. We want to dig ourselves deep and be an asset to all farmers here in New England, starting with Maine.
A big growth catalyst for hemp is federal legalization. With legislation being introduced to make that happen, I believe Future Farm has positioned itself perfectly.
Senator Mitch McConnell is surprisingly leading a hemp legalization initiative. Can you please tell us a little about this and how it will impact Future Farm’s hemp business?
My hat is off to senator Mitch McConnell. He is a pioneer in the hemp revolution and is rewriting history. If and when it goes federally legal, we will be well-positioned as one of few suppliers of organic feminized CBD seeds with an outlet to farmers who want to include CBD hemp in their crop rotation. Demand for feminized seed is high, selling at an average of $1.00-$1.50/seed. I believe legalizing hemp would only add fuel to our fire.
Do you plan to expand the hemp operations into new markets or continue to focus on the base of operations in Maine?
Maine is our primary focus this year. We believe that the experienced farmers and affordable land make this a viable opportunity. We are excited to provide Maine farmers with the seeds and processing to make them successful, and ultimately drive the Maine economy. Maine is well-known for its local, hand-crafted products and we intend to do our best to support this part of the economy. We look forward to being a part of the ongoing hemp conversation here in Maine.
However, I do see the future to include all of New England, with lots of opportunity to work with our neighbors in VT, NH, MA and CT.
How do you see hemp fitting in to Future Farm’s portfolio-based approach to investing? With the massive addressable market for hemp-based applications can you see the hemp side of the business eventually outpacing the marijuana focused investments?
I see hemp complementing Future Farm’s portfolio approach to cannabis investing. Right now, Future Farm has invested interest in 6 dispensary opportunities and that number is growing. Dispensary sales don’t consist of just THC sales. CBD is a big player in the retail sale revenue as well. Future Farm will be able to utilize its own dispensaries as retail distribution opportunities and at the same time start developing CBD-focused retail brands within these markets. This will give us a seed to retail sale approach and vertically integrate our CBD hemp business. With kilos of CBD concentrates selling for an average of $8,000-$10,000 wholesale and over $35,000 retail we will have an amazing opportunity within our portfolio.
I do love it when a plan comes together and with hemp legalization nearing I do believe that one day very soon the hemp and cannabis revenues will be neck and neck with each other.