How to harvest hemp’s low-hanging fruit?
Start with a market that’s ready to buy
By Richard Rose, special to Hemp Today
Without strategic branding and marketing, none of that breeding, farming, and processing will get retailed. That’s the situation we find ourselves in today. Developing new markets for new materials is hard and expensive, but capturing existing ones is far easier to leverage big with the same number of dollars.
No accident
Creating hemp’s most successful segment starting in the last century wasn’t an accident or happenstance, but rather the predictable result of a team of food marketing professionals doing what they do best, with a decent budget, consistently for years. Marketing is marketing, whether widgets or tofu cheese or hempseed foods. That experience revealed it’s easier for an existing company to succeed in hemp by pivoting to it than for a hemp start-up. The key to success for hemp in the U.S., for millions of waving broad acres of green Cannabis plants, is the same as always: go after the market easiest to sell a large volume of profitable products into, colloquially known as its “low-hanging fruit;” in this case, literally (hempseed is botanically a fruit). Then leverage each success to build the business and acres, incrementally and sustainably.
Target the one existing segment with millions of hempseed consumers and thousands of retailers in the U.S. already, the one with the most sales and profits and driving the most acres.
The segment with a total market of nearly 100%, which renews its need for the product daily and is completely legal globally and ready for export. Build a hempcrete wall and you’ll never build that wall again, but eat hempseed and they’ll just grow and process more for you to eat tomorrow. It is hemp’s from day one. The only change is that now it can be grown in the U.S., which was the end goal of many of us building demand and thus markets for hemp, as it would then increase pressure to legalize.
By simply growing hempseed and removing the shell, it can birth an entirely new hemp food processing industry making delicious raw food high in protein and omega-3.
Foods containing shelled hempseed (hempnut) such as baby food, bagels, beverages, biscotti, bread, breading, cakes, camping foods, candy, caramels, cereal, cheesecake, chocolate, cookies, crackers, cream cheese, cream soup, dessert topping, dip, dressing, energy bar, extruded or puffed snacks, falafel, flour, frozen dessert, fudge, granola, hard cheese, hummus, mayonnaise, meat alternatives, medical foods, miso, muesli, muffins, nut butter, oil, pancakes, parmesan alternative, pasta, pastries, pesto sauce, pet food, pie crust, pilaf, pita bread, pralines, pretzels, protein powder, pudding, sauces, scones, shakes, smoothies, snack chips, sour cream, tabouli, tahini, tempeh, toffee, tofu, tortillas, trail mix, truffles, veggie burgers, waffles, and yogurt.
Bring the avalanche
You get the picture, enabling the primary products in turn creates an avalanche of new secondary products based on it, potentially on the shelves in weeks. It also allows joint marketing efforts, such as a co-op Hemp Food Association booth at ExpoWest or true renewable resource.
It is also the market that is her first billion-dollar one despite existing only about 30 years, which also offers far more climate change mitigation than hempcrete or EVs.
Made in . . . Canada
Food is the only hemp segment proven successful and profitable over the last 20 years; 90% of Canadian hemp is about food. It’s the easiest way for a company to “get into hemp” with products on the shelf in just days or weeks.
And with a domestic market of thousands of stores supplied by Canada, China, and Europe, it would be an easy “Made in USA” replacement strategy to get shelf space.
That is hemp’s low-hanging fruit, the one I naturally assumed the Green Rushers entering after 2018 legalization would logically flock to if only they knew about it.
The key word is “knew,” because no one has yet told the story of how hemp got to where it is today, what has worked in the past and why, and what didn’t. Hemp’s biggest obstacle has long been the Dunning- Kruger Effect – delusion. Many erroneously think the U.S. hemp industry started in 2018 with the Farm Bill, or in 2014 with that Farm Bill, or in 2013 when Colorado planted its first state-legal crop.
But no, the U.S. hemp industry never died, seed and fiber have always been imported. In fact, sterile seed and stalk/fiber have been exempted from marijuana laws. Again, these are the best practices we learned decades ago, the things that worked.
Some of the most advanced developments in hemp research in the last few years have been with the seed, medical as well as nutritional. And the cutting-edge work of hemp food companies like Nepra Foods and Planet Based Foods inspired me to reboot the Hemp Food Association (founded 1998) in 2022.
Get into hemp!
“Getting into hemp” via food is available to anyone, from the marginalized to a large corporation. Everyone eats, and food production is ubiquitous. Almost anyone could get a new food containing hempnut made nearby, package it, then sell it. A meritocracy, it rewards creativity and perseverance. A chocolate bar or tortilla with 5% hempnut, or milkshake and ice cream topping. Look around, from gelato shop to pasta maker, there are many ways to get a hemp food made with your brand locally.
Or not locally; some of the largest food retailers sell hempnut already, such as Walmart, Costco, even Woolworth’s in Australia. Other large companies marketing hemp food include Patagonia, Nature’s Path, Bob’s Red Mill, and Tilray. Margins are so fat one Canadian processor sold for an unusually high premium… twice.
My upcoming ebook “Seedy!” details exactly why and how to get into hemp foods. A generation ago I proved the model for how to make money on hemp by slightly pivoting my successful Inc. 500 business from using tons of soybean to using tons of hempseed. Working with the dozens of brokers and distributors that helped us make America’s most-hated food (tofu) popular in the Reagan ’80s, we had shelf placement in thousands of stores in just months. It’s the same business model still used today throughout the industry. And you don’t even need a farm, building, or equipment to get started.
How do we disrupt 15% of food soya with hempseed, a million acres worth, which has long been my goal? It’ll take the one thing Americans aren’t good at anymore: cooperation. A strategically located processing plant with hundreds of thousands of acres in hemp within an hour away. Like in Canada, state and federal grants will be needed as well as an agreement from local supermarket chains and food processors to buy the “Made in USA” hempnut and other branded hemp foods.
Best is to organize as a co-op so that processor and farmer interests are aligned, with a consumer brand selling value-added products. Developing bespoke cultivars for their region and application, it will require investor patience and management skill.
Growing for grain produces at least four times more stalk than seed, so the fiber industries will have plenty of bast and hurd. It’s a win-win for the nascent hemp industry.
With “hemp THC” gummies sold in gas stations to teens scaring away USDA/ NIFA grants, the legitimate hempseed food segment needs a little help from Congress. One is in the form of “THC-free” labeling for compliant GRAS hemp foods, much like we see for “fat-free” (<0.5g fat) and “alcohol-free” (<0.5% alcohol).
Another is a standard of identity for shelled or hulled hempseed as “hempnut,” thereby reducing label space and clarifying the product’s standards.
One of hemp’s problems has been the lack of a common narrative creating a community with a shared idea. We’ve seen a positive narrative in hemp a few times in the past with Jack Herer and then Charlotte Figi, whose story fueled the rise of CBD, but nothing since federal legalization.
That allowed us to fragment into many different industry silos, just one of the problems with “25,000 products from hemp.” Then federal legalization encouraged a Green Rush by people entering from other industries infamous for dodgy dealing. The rash of fraud, lawsuits, and bankruptcies testify to that.
Existential crisis
The proliferation of “hemp THC” products is because it’s far cheaper to synthesize various types of THC from hemp CBD, which is now sourced mostly from foreign farms of unknown provenance or soil quality. American farmers don’t benefit and researchers have yet to see even one clean chromatogram of any of the thousands of dirty “hemp THC” products they tested. We need to fix bad laws, not find toxic workarounds just to boost profit margins.
And besides not helping American farmers or patients, stony cannabinoids ostensibly from hemp are creating an existential crisis for grain and fiber hemp. Since 1980 I’ve been a processor and marketer of grains into value-added consumer packaged goods and industrial ingredients. And since 1994 I’ve spent millions to build a market in order to get U.S. farmers to grow hempseed.
All I wanted to do is feed and clothe people. Thirty years on, I’m still waiting.
# # #
Hemp veteran Richard Rose is founder of the Hemp Food Association (1998). You can order his free ebook “Seedy!” here.
HempToday Magazine | Q4 2024 | Copyright Hemp Today 2024, all rights reserved
Get your free Hemp Today Magazine Q4 2024:
“As we enter the era of Hemp 3.0, the hemp industry stands at the brink of transformative global growth, driven by sustainability and innovation. Yet, challenges persist, with market oversupply and infrastructure gaps threatening stability. See how Hemp 3.0 can redefine industries to build a legacy of economic growth rooted in environmental stewardship.”
Click here for a free 39-page full-color PDF for viewing or download.