An old crop is new again: With crop’s legalization, Pierce County businessman aims to help Wisconsin farmers become national leaders in industrial hemp

posted Dec. 18, 2017 10:31 a.m. (CDT)
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by / Heidi Clausen, Regional Editor | heidi.clausen@ecpc.com

  • con_Hemp_1_122017
    A combine harvested a field of industrial hemp near McVille, N.D. Corn and soybean farmers shouldn’t need to invest in any new equipment in order to grow hemp.
  • con_Hemp_5_122017
    A combine harvested a field of industrial hemp near McVille, N.D. Corn and soybean farmers shouldn’t need to invest in any new equipment in order to grow hemp.
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    Hemp grain flowed out of a combine into a truck in North Dakota.
  • con_Hemp_4_122017-1
    Hemp grain was transported by auger into a separator for initial grading and dry-down. Air separation helps get rid of foreign material and knocks down moisture. The crop is then run into a grain cart for weighing before it goes into storage bins.
  • con_Hemp_3_122017
    Hemp grain flowed into a grain cart after being run through a separator, where it was graded and dried.
  • con_Hemp_2_122017-1
    Hemp grain was transported by auger into a separator for initial grading and dry-down. Air separation helps get rid of foreign material and knocks down moisture. The crop is then run into a grain cart for weighing before it goes into storage bins.
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    Anderson

PRESCOTT — If Ken Anderson has anything to say about it, Wisconsin farmers will emerge again as national leaders in industrial hemp production, and it won’t take long.

“The forward-thinking individuals and farmers in Wisconsin are very refreshing,” said Anderson, president and founder of Legacy Hemp, who has led the fight to bring industrial hemp production back to Wisconsin after a 60-year hiatus.

The Prescott entrepreneur’s vision got a big boost last month with the Wisconsin Legislature’s passage of a bill permitting industrial hemp to be grown again. Wisconsin — the first state in which a hemp bill has unanimously passed in both the Senate and the Assembly — is the 34th state to allow production of industrial hemp.

The Wisconsin Department of Agriculture, Trade and Consumer Protection has 90 days from Gov. Scott Walker’s Nov. 30 signing of the bill to create rules for growing the crop before farmers can apply to participate.

“I plan on Wisconsin leading the country in hemp production once again, and it won’t take that long at all,” Anderson said. Considering the overall conservative political climate in Madison, “what just happened in Wisconsin is bigger than what Wisconsinites know.”

Anderson gives much of the credit for this watershed moment to the early support hemp received by the Wisconsin Farm Bureau. Anderson and North Dakota hemp farmer Neil Reiten were well-received in a workshop this month at the organization’s convention in Wisconsin Dells. But getting here hasn’t been easy.

“The push, for my company, is to bring hemp into the ag realm rather than the niche market advocacy realm it has been stuck in for so long,” Anderson said. “The ag crowd is on board with industrial hemp; that’s why things are changing.”

The atmosphere for hemp now is a far cry from a decade ago, when few farmers were interested in jumping on the hemp bandwagon unless their father or grandfather had raised it back in the 1940s and 1950s, he said. “They had the conflation issue of marijuana and industrial hemp,” but more people have come to understand that industrial hemp — which has a lower level of the high-inducing compound tetrahydrocannabinol, or THC, than marijuana, another type of cannabis — is not a drug crop.

“When the farmers are on the side of hemp, that’s when you win,” he said. “You can’t just push them off as the lunatic fringe.”

Anderson is hopeful that hemp can jump one more major hurdle: A narcotics license is still needed to grow industrial hemp, but federal legislation to remove it from the Controlled Substances Act list has been proposed; that would bring it out from under the Drug Enforcement Administration’s thumb to the oversight of the U.S. Department of Agriculture.

“That would be a dream,” he said.

But Wisconsin’s rapid, uncontested passage of a hemp bill is proof that “the tide has turned,” Anderson said, adding that he rarely has to explain the difference between industrial hemp and marijuana anymore. “I used to walk into a hostile environment; people thought I was just pro-marijuana,” he said. “It’s like a light switch was turned on.”

A seed is planted

Hemp production is not new to Wisconsin. In fact, America’s Dairyland once was a national leader in the crop, mainly used for fiber. The last crop was grown in 1957, and the next year, the last hemp mill in the U.S. was shut down. Hemp made a comeback as part of the 2014 Farm Bill, which allowed universities and ag departments to set up pilot projects.

While Wisconsin’s hemp history is interesting, Anderson said, he’s even more excited about its future. It will not be limited by the ability or desire of farmers to grow hemp, he said, but by markets that are still in their infancy, with lots of up-side potential.

“I will end up turning away many farmers this year who want to grow hemp. I only have so many contracts,” said Anderson, who has worked with hemp projects nationwide, but his enthusiasm about its promise for his home state is undeniable.

Legacy Hemp, with locations in Prescott, Albert Lea, Minn., and McVille, N.D., was established in 2015 and is the first — and so far only — domestic provider of certified hemp cultivars in the U.S. The company aims to provide the infrastructure to deliver hemp to developing markets and does all bulk wholesale, with no product branding. Legacy Hemp has sold most of the certified seed planted nationwide, according to Anderson.

He began working with hemp in 2009, when he collaborated with a housing developer seeking a new “dream technology hempcrete,” which is a bio-composite made of the inner woody core of the hemp plant and a lime-based binder. At the time, no industrial hemp seed was available in the U.S. and it had to be imported.

“As an entrepreneur, I saw that as opportunity,” he said, joking that hemp was a “four-letter word” in his household for several years, but “without risk, there’s no reward.”

He teamed up with plant breeder David West and started buying up the rights to cultivars collected from around the world and now sells seed in hemp-friendly states. About 12,000 acres of hemp were planted this year — an almost 1,000-acre increase over last year, he said.

But Anderson is adamant that farmers have a destination for their crop before putting seed in the ground, and he said he has contracts ready to be filled by Wisconsin growers.

“We are a vertically integrated company,” he said. “We sell farmers the seed but also contract their acreage. They have to have a buyer at the end of the day.”

UW-Extension hemp variety trials could begin in Wisconsin next year, and Anderson expects more than 4,000 acres of industrial hemp to be planted next spring in Wisconsin. Anderson also vows to bring a processing facility to the state by next fall that will employ about 16 full-time workers. Legacy Hemp is eyeing four sites — Prescott, Vernon County, Rock County and between Menomonie and Eau Claire.

“Now that we have the markets and financial capabilities,” he said, “we need processing set up so we can process Wisconsin grain here.”

Most of the initial focus in Wisconsin, he said, will be on certified organic grain production. De-hulled organic hemp seeds — high in protein and omega-3 and omega-6 and easily digestible — are widely used in food production.

“The largest market growth and profitability is in organic hemp,” he said.

Cultivars are being developed specifically for Wisconsin, and seed will come from Minnesota and North Dakota. No pesticides, herbicides or fungicides are labeled for use on industrial hemp, so “even on conventional land, it’s basically organic,” he said.

Anderson said Wisconsin is perfectly suited for hemp production and has the potential to lead the way nationally for production costs and yields. Because of its already active organic farming community, the Vernon County area may be the “sweet spot” for certified organic hemp grain.

There’s plenty of room to grow in markets and product development: U.S. consumers bought almost $600 million in Canadian hemp products in 2015 — a market penetration of only 0.5 percent, he said. That figure is expected to closer to $1.6 billion by 2020. Anderson expects to see a need for 12,000 more acres in 2018.

“We’re nowhere near the scale we need to be to supply people like (General Mills),” he said.

Hemp is on the radar of big players in the seed business such as DuPont Pioneer, and eventually, those types of firms will enter the hemp market, but it probably won’t be until there are more acres and markets are further developed, he said. “They’re waiting to see how things play out.”

How to grow it

It may be tempting to build Wisconsin’s hemp industry quickly, he said, but it’s important do this right from the start. That’s why he wants to work with “real farmers” who already know how to produce other crops.

“I don’t want to educate you on the basics of farming,” he said. “I want to take your expertise and put another very profitable crop in your hand.”

Legacy Hemp is driven to produce the most nutritionally dense grain available, Anderson said, and while genetics play a role in crop quality and quantity, soil health is more important. Cover crops are encouraged. Farmers set up to raise corn and soybeans already have the equipment they need to raise hemp, he said, and hemp can be added to the corn-soy rotation.

Industrial hemp should be planted when soil temperatures exceed 50 degrees Fahrenheit. Planting depth is a half-inch to three-fourths inch, with row spacing at 7½ inches. The typical seeding rate is 30 to 35 pounds per acre.

Hemp is very hardy and may be a good option for marginal ground, but it doesn’t like “wet feet,” Anderson said, so good drainage is key. The crop typically is planted by mid-May and emerges from the soil in about three days. Harvest takes place in late-September.

Textile-grade hemp fiber will be “a ways off” for Wisconsin, he said, because it requires some specialty equipment and the infrastructure isn’t yet in place. Grain is the low-hanging fruit, and if the stalks can be used, the crop becomes dual-purpose.

Not wanting to put the cart before the horse, Anderson strongly urges farmers to have a contract in hand before planting hemp as having farmers with bins full of hemp that they can’t sell would give the burgeoning industry a black eye before it even gets off the ground.

Prices fluctuate wildly — depending on grade, about 52 to 56 cents per pound for conventional hemp and $1.08 to 1.18 for organic — but stability will come once the crop is better known, he said. Organic hemp farmers can net as much as $1,000 an acre. Legacy Hemp will assume the risk in these early stages, he said. “Farmers’ risk is the crop insurance part. We’re the ones taking the gamble when we contract.”

Hemp production will expand, he said, but only with contracts from more large-scale buyers like Post, he said. Grain can go into protein powders, snack foods, gluten-free flour, cereals and more; oils can be pressed into cosmetics, deck sealants, lotions and ointment, or sold as is. Stalks can be used in animal bedding. Some companies have expressed interest in using it in cheese.

“Finding out what we can do with this crop is exciting,” he said. “Wisconsin will figure out how to use this whole plant and put in products we’re not even thinking of right now. ... It’s a lot bigger than a few granola bars.”

While much of his recent time has been devoted to advocacy, Anderson said he most enjoys working at the grassroots level, with farmers.

“If I can make a farmer profitable without any subsidies and I’m making them more profitable than they are with crops that are heavily, heavily subsidized ... I feel good about it,” he said. “The economics of industrial hemp farming are very good for farmers.”

For more information about Legacy Hemp, visit http://www.LegacyHemp.com or contact Ken Anderson at 612-309-2007 or Ken@LegacyHemp.com.






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