1998: HempNut, Inc. Offers License to Grow the Industry

This is the press release I sent to HIA members in 1998 to encourage them to get into hemp foods, cheaply and easily and with our full marketing support, even licensing our trademark HempNut to them for the nominal sum of $1/year. That would allow them to ride the coat-tails of the largest publicity and advertising campaign in hemp history ($230,000), even guaranteeing the lowest price. HempNut was the first shelled hempseed brand in North America, introduced in August 1997. In just two decades shelled hempseed would become hemp’s first billion dollar segment, 90% of Canadian hemp.

When I went to get the domain name <hempnut.com> a few days later (yes, it was a more innocent time back then…), I found that an HIA member liked my product and brand name so much he beat me to registering it! While I learned that lesson the hard way, it actually turned out to be the Hand of God as it forced me to get <thehempnut.com>, and thereby later create an entire personal brand around being “The Hemp Nut,” nutty for hemp. Before this, “hemp nut” was not a thing, long before “hemp hearts.”

So then, who grabbed <hempnut.com>? A caterer with a tiny restaurant in New York City, not in commercial food production or wholesale, who gave shelled hempseed as much prominence in his cooking as he did shallots or parsley. With his not-so-subtle phallus-centric ads in Hemp Times (see ad at right), he convinced people that despite no experience or existing distribution network he was somehow going to introduce the most competitive items (soda, ice cream) in the most competitive market (New York City), any day now. Meanwhile, we were already in thousands of stores in two countries for years with a long-established sales and distribution network. He also opposed my trademark for HEMPNUT, so he could try to get it. There was no love lost between the two of us, one a New Yawka and the other a California beach kid.

One time I went to his restaurant and as soon as he saw me he ran out the back door. Having had the first vegan restaurant in California almost two decades earlier, my opinion of his dishes is that they were pedestrian, and use of shelled hempseed appeared as an after-thought. Right outside was a pay phone, so I took this 10-inch HEMPNUT logo rubber stamp and permanent ink I brought along and stamped it on the side of the public phone for him to see every time he went to call his, er, suppliers:

Applying my 18 years of experience innovating and marketing new foods, I had an idea for how we could all work together, coöperatively. “Coöpetition,” not competition. After years studying business at University, I realized that this emerging segment could run by a different set of rules than past businesses. Not only were the companies all start-ups, but so was the category, that of hemp foods. We had a blank slate to work with, and the spirit of Coöpetition was the way we could engineer a new ethos to do a food business, and set an example to the world. Innovating not just products and a market, but also best practices for how businesses could work together while still competing to prove it was possible, a true Win-Win outcome.

My vision for the hemp food industry was this, which I offered to those start-ups who just a year later would instead ruthlessly fight over a tiny market I was in first:

Since I had by far the lowest-cost primary product, I would process, import, and brand it as “HempNut shelled hempseed.” Concentrating the relatively small volume in the hands of the best yet least-expensive brand lowered costs and improved quality for everybody. It’s easier to innovate new processing and packaging with higher volume, and to monitor quality.

Others would then start hemp food businesses using HempNut as an ingredient with our help, even financing, formulations, or our dozens of co-packers. One idea I suggested was a perishable secondary hemp foods business using HempNut to make cheese, milk, yogurt, ice cream, veggie burgers, and the like. I already had a few of those products and would have shifted production to them, as well as brand under HempNut the other products they co-packed. They would be free to brand or co-pack for others, they just had to use our HempNut if they put it on the label. We would even plug their products into our successful network and get them into thousands of stores coast-to-coast in the U.S. and Canada, within weeks. They would contain at least 5% HempNut or Oil.

Another suggestion was a hemp frozen foods company. Make ready-to-eat meals like lasagna and TV dinners, meals in a bowl, ingredients for use in a recipe, or ice cream, all sold frozen.

Yet another was a dry hemp food business. Make or just market dry foods such as bars, chips, cookies, breads, nut butters, and the like.

To do so I would charge them a license fee of $1 per year, the legal minimum, and require they bought only from me if they used the HempNut brand name on packaging. I promised the lowest preferential partner price, and highest quality.

This “rising tide lifts all ships” approach would have made the infant hemp food industry very strong and united, giving start-ups the benefit of a long-established (since 1986) sales and distribution network in two countries, thousands of natural food stores and supermarket chain stores, over a hundred distributors and brokers in every region, plus the export markets we had.

Instead of competing against each other, we would be working together by co-branding. It was a great deal for the people I inspired to get into the business, giving them their first foray into food in a way that would ensure success. They would be mentored by a successful food professional, leveraging what at that time was 17 years of experience. We would be a team, the HempNut Team. They would use our brand name and product in the ingredients, and in turn we would promote and market them to several thousand stores and millions of consumers. They would get prime trade show placement in our booth, since we had seniority in booth selection we got much better placement than the start-ups would.

This model allowed a number of efficiencies. Higher quality and lower cost, certified organic starting material, a wider range of hemp foods on the store shelves, coöperative marketing efforts such as sampling at consumer festivals and a massive national advertising budget ($230,000) driving the advertising and PR at the consumer level so they look for it as an ingredient on packages (much like NutraSweet® did).

Instead, four of us were scratching and clawing over a <$1 million market and today the volume of sales of hemp foods is a fraction of what it should be. Farmers get as little as 10¢ per pound for seed, you pay double what you should while processors increased profit margins by over 450% selling protein powder instead of paying pig farmers to haul it away, hoarding that profit windfall from farmers and consumers.

BTW, protein powder was another product HempNut pioneered in 1998, called HempNut Flour (see image at right) because like today, the protein was low at 45% and soy protein isolate was at the 90%+ level.

My primary objective was to brand hempseed as an American food on par with soybean, flaxseed, and corn, like I did successfully since 1980 with tofu and soymilk. If that were done properly, it would drive production demand globally including in Canada, and especially put pressure on the U.S. to legalize hemp. Four companies selling complementary not competing products in a new product category would be better on all counts than four companies selling the same product to the same people, competing head-to-head. That would increase demand for hempseed to be grown in Canada and elsewhere, since it takes 2.5 pounds of whole to get one pound of shelled hempseed, five to make oil.

Alas, greed and xenophobia (their Canada Über Alles mentality, I was processing Chinese seed in Germany) won out. That hyper-competitive anti-coöperative attitude led them to crash the hemp foods market for years over a lie when DEA tried to legalize 98% of the industry, no max THC, ironically almost taking Canadian hemp down with it. That was after losing for us the 3,000 ton/year birdseed market in 1999 due to the phony “U.S. Hemp Embargo” that wasn’t.

So, despite being flush with cash and free time after selling Rella Good Cheese Co. for $3.7 million in 2001 and ready to push hemp foods even further, faster, instead I retired when the market died, walking away from $2.5 million invested and years of work.

BTW, that “oil pressed from HempNut” mentioned in the press release was a new technique we developed, pressing oil from shelled seed, but our co-packer couldn’t do it so it never got introduced. Ironically, in 2020 a company won the Hemp Innovation Challenge with the same idea, 22 years later.

Richard Rose

HempNut License Available

Santa Rosa, California—The Hemp Corporation announced today that its trademark “HempNut” will be made available for use by its customers, under license. 

HempNut is The Hemp Corporation’s brand of hulled hempseed.  Certified organically-grown, it has not been sterilized or heated, and the hard outer coat has been removed.  Since the coat is removed, the seed is free of any traces of THC typically found on the coats of whole hempseed.  And also because it is hulled, rendering the seed unable to grow, it does not require sterilization or heating before importation to the U.S.

“We are excited to be able to offer this program to our customers in North America and Europe, where we own the trademarks for HempNut,” said Richard Rose, president of The Hemp Corporation.  “This way we can assure the quality of products using the HempNut name, and consumers will know that the product uses the highest quality hempseed.  We expect HempNut to be known as the best quality food-grade hempseed.”

HempNut is one of the most nutritious seeds, with 36% essential fatty acids, 31% highly-digestible complete protein, 6% fiber, and many vitamins and minerals.  HempNut tastes very similar to hulled sunflower seed, and looks like sesame seed. 

Oil pressed from HempNut is subjected to far cooler temperatures than oil from whole hempseed, and it has a longer shelf life and fewer contaminants.  The presscake has virtually no coat in it and less oil, and is about 75% very high-quality concentrated protein.  Whole hempseed have minute traces of THC on their coat, which when used in foods or oil often are found in the urine during drug testing.  Because the coat is removed, HempNut is the only hempseed free of any trace of THC.  Removing the seed coat also improves shelf life, digestibility and palatability, and reduces darkening of foods. 

The hempseed is certified organically-grown by the Demeter organization of Europe, which requires sustainability practices be used in addition to organic cultivation.  It is also available non-organic, at a lower cost.

HempNut is exclusive to, and a trademark of, The Hemp Corporation of Santa Rosa, CA, and is its first product.  The ingredient is used in HempRella, a product of Rella Good Cheese Company, as well as “Bite Me Bars,” a chocolate bar.

Hempseed is legally grown in virtually every industrialized country except the U.S., which imports and sterilizes 1,000,000 pounds of it per year, mostly for bird seed.

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