15 minute read
HEMP HAPPENINGS
Four years after the state started issuing licenses to industrial hemp growers, North Carolina’s pilot program wraps up this year. During that time, the industry ballooned in the state. But what’s next for the emerging crop?
NC HEMP FARM
harvesting HEMP
BY JOHANNA CANO PHOTOS BY ARIS HARDING & TERAH WILSON
When Jason Simmons lost his job as a firefighter due to asthma, he was left unable to provide for his family and experiencing chronic pain, inflammation and anxiety.
His wife, Audria, sought to find answers for her family’s health. She began researching CBD, a type of cannabinoid that can be extracted from both the hemp and marijuana plant (two different names for the cannabis plant) that is promoted to help relieve pain, depression, anxiety and several other conditions.
“He was very sick and could not get out of bed,” Audria Simmons said. “We used some CBD for his anxiety and panic attacks (from) not knowing how to provide for his family, and it was working.”
At the same time, due to her growing knowledge of CBD, she was approached to work at a CBD dispensary that opened in Southeastern North Carolina where she was able to talk to companies, learn what was in the products and what it took for the product to work, she said.
In 2017, and with $60, she started Bethesda Hemp from her home in Burgaw where she cold-presses hemp to make CBD oil.
SEED TO SALE: The hemp plant can be used to make a variety of products
SEED
Animal feed, proteinrich fiber HEMPSEED OIL: margarine, oil paints, varnishes, soap, cosmetics, lotions
STEM & STALK
INDUSTRIAL TEXTILES: twine, rope, canvas, carpets CONSUMER TEXTILES: clothes, shoes, handbags
LEAVES & FLOWERS
CBD
The Simmonses were part of a group of early adopters in the state who delved into the hemp industry when it became legal. In 2014, the N.C. Industrial Hemp Pilot Program was authorized, and in 2017 the Industrial Hemp Commission adopted rules that included guidelines on approved seeds, THC sampling, reporting requirements and more. The market was further unlocked when the 2018 Farm Bill removed cannabis and cannabis derivatives that have low levels of THC (a cannabinoid that gives people a high) from the definition of marijuana in the Controlled Substances Act, legalizing hemp-based products at the federal level. Now, as the state’s hemp industry continues to gain popularity, both from entrepreneurs and users seeking results, many are finding that lack of regulations and volatility in the hemp crop are causing a setback in the emerging market.
Justin Hamilton is another early adopter in the state’s hemp industry. Hamilton is the founder of Wilmington-based Hempleton Investment Group, which has several brands under its umbrella, including HOPE Hemp Extracts, Legacy Farms Cannabis, The Hemp Farmacy, Prolifera and Prohibition Spa Skin Care.
Hamilton was previously in real estate, redeveloping historical properties until 2008 when the real estate market collapsed, prompting him to find another venture.
“I started flying into Colorado, and as that marijuana program was developing, I made some investments in small startups,” Hamilton said. “And what that did for me was gave me a base of knowledge on how cannabis would help people but also how the structure of cannabis companies and a cannabis state program would look.”
Hamilton formed the Hempleton portfolio in December of 2015, which involved a year of talking to attorneys. A lot of the early involvements of the company were in lobbying and being an active participant during the development of the state’s rules.
Companies under Hempleton include a firm creating tinctures through extraction, an in-house product line with several storefronts and the NC Hemp Farm in Wallace, which grows hemp and provides a space for research and innovation.
“Our goal was to create a vertical portfolio that allowed us to have our own research arm, production farms, multiple extraction facilities, and then to build out the distribution center and the distribution network, and finally the retail storefronts,” he said.
With The Hemp Farmacy opening its eighth location, Hempleton has experienced growth in the industry. Hamilton said, however, that one of the biggest challenges has been a lack of proper regulation.
“That (deregulation) enables a lot of short-term-gain mindset for people. They’re creating fake brands. We see this in our stores regularly. People bring products in, and they’re like, ‘This stuff just doesn’t seem to work well.’ That’s because there’s no CBD in it,” Hamilton said.
“Our biggest problem is that you have such a tainted marketplace for the products that a lot of people are trying CBD or what they think is CBD, and it’s not working and they’re not really retrying it or getting properly educated about what to look for,” he added.
The FDA has not approved a marketing application for cannabis for the treatment of any disease or condition, except for one cannabisderived and three cannabis-related drug products only available with a prescription.
While the FDA has not banned all edible CBD products, it has warned manufacturers who have
made unapproved health claims for their CBD products or who have misrepresented CBD amounts.
Currently, the best way to see the legitimacy of a product is to look for lab testing associated with each batch, Hamilton said.
Another element that has caused a setback for the hemp industry is an overproduction of hemp crops that created what Hamilton referred to as a “collapse” in the agricultural side in 2019.
In 2016, as the state started its hemp program, there were only a couple other states that had a program that allowed the plant’s growth for the production of CBD.
“We had a really strategic advantage for a couple of years. The state program went from a couple hundred farmers to almost 1,900 farmers, and those farmers, instead of growing research plots to understand how to grow the plant, saw dollar signs and they overplanted,” Hamilton said. “These guys went in for 50 acres for their first production, which was extremely risky, but it also created such an oversupply of hemp that it drove the price from $4 a pound to 22 cents a pound currently.”
At its Aug. 5 meeting, the N.C. Industrial Hemp Commission shared that the state currently has 1,500 licensed industrial hemp growers, representing 14,016 acres and nearly 6.9 million square feet of greenhouse production. There are currently 1,295 registered processors.
According to minutes from the commission’s June 1 meeting, Chairman Tom Melton said there is an overabundance of CBD, and that has driven prices down. Also, in a December meeting, Commissioner Pat Short noted that the CBD market is flooded with a massive amount of biomass with no market. He recommended that before someone grows hemp, they have a contract that is reviewed by lawyers before investing.
Further adding to what the commission describes as a “gray area” in the hemp market is the discovery of other cannabinoids, such as Delta-8, CBN, CBG, CBC and others. More than 100 cannabinoids have been identified.
Delta-8 has recently become popular because of its similarity to Delta-9 THC, giving users a milder, but similar high that THC provides.
The legality of Delta-8 is hazy, which like CBD can also be extracted from either hemp or cannabis plants.
In an April meeting, Melton noted that Delta-8 seems to be gaining popularity, but he recommended that
growers seek legal counsel to discuss gray areas of this product.
Commissioners also announced the N.C. Industrial Hemp Pilot Program would end Dec. 31. Under the 2018 Agricultural Improvement Act, the USDA was tasked with creating a program to govern hemp production nationwide. North Carolina submitted a letter to USDA stating it intends for USDA to run the hemp program in the state. North Carolina growers will need to apply to the USDA’s hemp program to continue to grow next year.
The state might be seeing another phase in the cannabis industry with the legalization of medical marijuana under Senate Bill 711, sponsored by N.C. Sens. Bill Rabon and Michael Lee, both area Republicans representing the region in Raleigh.
According to the latest version of the bill, on which no decision had been made as of press time and which has undergone several text changes, medical marijuana could be prescribed by a licensed medical provider for those with a diagnosis of cancer, epilepsy, HIV/AIDS, ALS, Crohn’s disease, Parkinson’s, PTSD, multiple sclerosis and other “serious or debilitating medical conditions.”
Some feel this is not inclusive enough.
“One of the biggest disservices with this bill to the people is that they did not list chronic pain as a condition. I thought they’re supposed to be fighting the opioid battle. People don’t take pain pills for headaches,” said Jason Simmons, of Bethesda Hemp.
The Simmonses think that the bill is too restrictive, only allowing up to 10 supplier licenses in the state with each licensed supplier having up to four medical cannabis centers.
“I think it’s too narrow, and I think it drops the people that have really worked hard in the hemp industry of having a chance of being in that industry,” Audria Simmons said.
Under the bill, first-year licenses include a nonrefundable fee of $50,000 plus $5,000 for each production facility. Renewals would be $10,000 and $1,000 per facility.
Lee, who is opposed to recreational marijuana, said this is the “right time” for the measure.
“There’s been evidence across the U.S. and around the world that (marijuana) is effective in treating certain symptoms of debilitating conditions, and so now seems to be the appropriate time to move forward with it,” he said.
The proposed bill limits licenses to 10 to be able to start with the right structure, Lee said.
“We’re creating a whole new regulatory framework, and it seems to be appropriate to start at that level to make sure that we’ve got the right framework in place for regulating medical marijuana,” he said.
With the bill language still being worked on and the current Senate session ending soon, Lee said it will probably not move out of the chamber until next summer.
For Chelsey Peterson, co-founder of Huckleberry Hemp Farms in Willard, regulations on who can participate in the medical marijuana program allow a more controlled growth of the market.
“I’m fine with the restriction because I know it will expand eventually, and it’ll be better for the market when it does,” she said.
Peterson, along with her boyfriend, Tripp Livingston, and her parents, Dwayne and Brenda Peterson,
started Huckleberry in 2019 after Livingston moved to California to learn about the cannabis industry.
The farm currently has five greenhouses where the team typically grows 100 plants per greenhouse, harvesting three times a year. Huckleberry also processes the plant in its lab and creates products including CBD oil, lotion, bath bombs, capsules and pet treats.
Livingston said they pride themselves on growing hemp using organic practices.
“We use what’s called a compost tea to feed; we use natural remedies for repellents, and it’s just a completely organic farm,” he said.
The Huckleberry team has also experienced the issues that the lack of regulations has brought.
“There’s a lot of hemp products on the market that I’ll have no issue saying are snake oil. It should be illegal for people to do what’s going on in the hemp industry,” Livingston said. “It hurts the people like us that really pride ourselves on a pure product.”
While the business is young, Huckleberry has grown its customer base from locals to across many states, and Chelsea Peterson said they hope to open a storefront.
She, like the Simmonses and Hamilton, believe that more regulations would help those in the industry continue to grow and provide a better product for clients.
“The testimonials we get from people that are really suffering from bad health conditions saying, ‘Before I was lying in bed all day. Now I’m able to get up and go do something.’ To be able to give someone a measure of their old life back, you can’t put a price on that,” Jason Simmons said. “It’s not going to cure them, but to be able to offer people something that actually helps them and helps make their life a little bit better under incredibly difficult circumstances to me is priceless, and that’s really the heart behind why we are in this game.”
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November 6, 2021
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How can Wilmington achieve an INCLUSIVE ECONOMY?
-Patrick Brien CEO Cape Fear Collective View the Inclusive Economy Report
Cape Fear Collective, with support from the Kate B. Reynolds Charitable Trust and collaboration among multiple partners at the regional and state level, set out to better understand economic drivers of health and prosperity. The full report will be released in September of 2021, but here are some initial insights.
capefearcollective.org/inclusive-economy Visit CapeFearCollective.org to view the Inclusive Economy Report
How can Wilmington achieve an INCLUSIVE ECONOMY?
, with support from the Kate B. Reynolds Charitable Trust and collaboration among multiple partners at the regional and state level, set out to better understand economic drivers of health and prosperity. The full report will be released , but here are some initial insights.
Less Pay
Hispanic Female - $26,561 less
Equal Pay
Hispanic Male - $24,224 less
A Hispanic female in New Hanover County earns, on average, $26,561 less than a White, Non-Hispanic male Black Female - $21,207 less
Black Male - $16,318 less White, Non-Hispanic males earn significantly more than any other demographic group in the county, with racial, ethnic, and gender disparities growing throughout the region.
2019 Median Earnings Gap of Full-Time Workers in New Hanover County as compared to White, Non-Hispanic Males. US Census Bureau. (2019). American Community Survey 5-Year Detailed Tables.
Housing prices in the region have remained relatively flat and below the state median. New Hanover County, however, is much higher than the state and increasing steadily as home ownership gets further out of reach for many.
House Price Index (adjusted for inflation)
$300,000
$250,000
$200,000 New Hanover County
State Median
$150,000 Rest of Cape Fear Region
2010 2014 2018
Federal Housing Finance Agency. (2010-2019). House Price Index.
According to the Economic Policy Institute’s Family Budget Calculator (2017), childcare costs in New Hanover County would require 61.8% of a minimum wage ($7.25/hr) earner’s income.
The hourly wage necessary to afford a 2BR home in New Hanover County is $20.56, well above the $13.95 earned by the average renter in the county.
U.S.Census Bureau. (2019). National Low Income Housing Coalition. (2021). 1 in 3 people living in the Southside of Wilmington do not have access to a vehicle, making work, medical visits, shopping, and other household chores difficult and expensive.
U.S.Census Bureau. (2019).
Two children growing up in poverty in the Creekwood neighborhood have very different economic outcomes as adults, depending on their race.
$20k $30k $40k $50k
$26,500 $45,700
The median income of a Black person who grew up in poverty in Creekwood is $26,500. The median income of a White person who grew up in poverty in Creekwood is $45,700.
Black White This pattern persists for every tract in New Hanover County, with Black children having less upward mobility.
$20k $30k $40k $50k
In many downtown Wilmington neighborhoods, the typical household is struggling to meet the Self-Sufficiency Standard*.
The median income in many Wilmington neighborhoods is between $30,000 and $60,000 lower than the Self-Sufficency Standard for the county. Meanwhile, much of the coast earns $30,000 to $60,000 more than the Self-Sufficiency Standard.
Black White
Opportunity Insights. (2018). The Opportunity Atlas. U.S. Census Bureau. (2019). American Community Survey. Median Household Income >$30k Below SSS >$30k Above SSS
U.S. Census Bureau. (2019). American Community Survey. University of Washington. (2020). Self-Sufficiency Standard.
*The Self-Sufficiency Standard, developed by the University of Washington, defines the amount of income necessary to meet basic needs without public subsidies and private/informal assistance.
For many people in New Hanover County, even being the top earner within their profession still leaves them well short of reaching the annual income necessary to meet the Self-Sufficiency Standard*.
IQR of Yearly Wage (2019) for select industries in New Hanover County. North Carolina Department of Commerce. (2019). OEWS Series. University of Washington. (2020). Self-Sufficiency Standard. Self-Sufficiency Standard 1 Adult, 1 Child New Hanover County $48,052
$50,000
$40,000
Carpenters
Nursing Assistants
Firefighters Restaurant Waitstaff
Preschool Teachers
$30,000
$20,000
NOVEMBER 6
Wilmington, NC and Remote
Join us as technologists and subject matter experts come together to understand how data can inform the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of the ocean ecosystem. Teams will analyze data related to the following sectors:
Ocean engineering and marine robotics Sustainable aquaculture and fisheries Marine biotechnology Tourism, recreation, and hospitality Coastal conservation and resilience
For more information, including sponsorship opportunities, contact info@capefearcollective.org
