Category: RR

KY Hemp Fiasco

The GenCanna and Atalo bankruptcy stories from years ago are still unraveling. The court forced farmers to pay back the previously paid invoices, over $9 million.

Workaround: invoice from a standalone corporate entity. Close it if a customer files for bankruptcy within 90 days of a payment.

With its history in hemp ignored, I post more on the past leaders of Kentucky hemp than Kentuckians do.

Instead, they leveraged that for a job for someone to post on social media. When a movie star’s valet who never did much good in hemp is on your Board instead of those experienced in making hemp a success, you got trouble. Big trouble.

And it shows:

From the Murray Scanner:

“In 2019, farm families in Calloway, Graves and Marshall counties [in Kentucky] planted about ten thousand acres of hemp on contracts. Many were never paid. The company kept taking the crop anyway — and its own executives told a federal court why: “It was more important to obtain the hemp and generate sales to support the business.”

This is the story of the second hemp rush, told in the seasons it took, by the people who worked them — from the courtroom record, the company’s own bankruptcy filings, and our own reporting in Calloway and Graves counties.

CHAPTERS
0:00 Give the money back
0:59 It started in Calloway County
1:59 The pitch: $25,000 an acre
2:35 Spring 2019 — the rush
3:55 Inside the company
4:43 September 11th
5:16 They took the harvest
6:49 A season of wages
8:17 The $462,000 baler
9:45 The money
10:27 The company’s own ledger
11:16 The clawbacks
12:27 The gamble
12:59 The building today
14:16 Who pays the farmer?

SOURCES — every figure in this film traces to a public record:

  • Why farmers went unpaid: OGGUSA (fka GenCanna) v. Louisville Dryer Co., Adv. 20-5032, Bankr. E.D. Ky., Mem. Op. Mar. 31, 2022 (sworn testimony of the company’s own VP of Finance and former General Counsel)
  • The clawback: Oxford Restructuring Advisors v. Anderson, Adv. 22-5016, Mem. Op. Dec. 29, 2023 — $120,937.50 recovered from a farmer; ~110 such suits, 2021–2023
  • Insider payments: the company’s own Statement of Financial Affairs, Case 20-50133 — $5,620,297.83 to 24 insiders in the final year
  • What farmers were owed: the company’s own schedules and public claims register, Case 20-50133 — more than a dozen west Kentucky farms, roughly $9–10M combined
  • Professional fees: fee applications and orders on the same docket — more than $9M filed
  • Acreage: Kentucky Department of Agriculture (42,086 approved acres and 978 growers in 2019; 5,530 and 240 by 2022)
  • The farmers: Joseph Kelly of Murray spoke to us on the record; Leewood Cornett, Brandon Barnett, John Fuller and Bobby Huff from contemporaneous reporting and federal filings (Lovell v. Bluegrass Bioextracts, 4:20-cv-00059, W.D. Ky.)

What we deliberately do NOT claim: that this was a scam from the start. No fraud finding, criminal case, or Attorney General action exists against GenCanna or its executives, and the court attributed the collapse mostly to the CBD price crash.

If you grew hemp in these years, or know someone who did, we would like to hear from you.

Archival imagery is public domain — Library of Congress (Keystone View Co. stereographs of Kentucky hemp harvest, c. 1920, dated on screen) and USDA photographs of modern hemp farms (federal public domain; representative fields, not the Kentucky farms in this story). Court documents are authenticated federal records from govinfo and the public docket of Case No. 20-50133, Bankr. E.D. Ky. Site photography at Hickory and the Joseph Kelly interview are our own original reporting.
—
Murray Scanner · murrayscanner.com”

Click here to see the 16:02 video.

2016: Nobacco Hemp Smoke

In 2016 I spoke at the NoCo Hemp Expo along with friends Rob Clarke, Chris Boucher, and Adam Dunn on The Future of Hemp.

I presented for the first time in public my idea of “Nobacco,” artisanal Type 3 CBD hemp buds.

High in CBD and low in THC, since it replaces tobacco the TAM is larger than the stoner market.

Despite also starting hemp’s first billion-dollar segment, shelled hempseed as food, at the time many thought I was crazy(er).

Yet, floral hemp went on to be most of the hemp grown in the U.S., and there were thousands of such stores in Europe and the U.S. It kept hemp alive the last several years.

Segment is 1:24.

Hempnoid Co. Fined

Delta-8 is the MAGA of Cannabis.

“A Colorado man whose companies agreed to pay $125,000 to resolve consumer protection investigations is at the forefront of efforts to delay a federal ban on hemp and associates contended in litigation documents that he has claimed his ties to Trump’s chief of staff give him influence over White House policy.

Bret Worley, 30, of Denver is the chief executive of MC Nutraceuticals, which claims to be “the largest global supplier of cannabinoids.”

He married Susie Wiles’ younger daughter Caroline in June at the Trump Winery in Charlottesville, Va. Wiles is the president’s chief of staff.

A North Carolina hemp manufacturer in July 2025 sued Worley and his companies and contended in that federal claim that Worley boasted of “his business and political connections” and stated, “that he could, indirectly through his personal relationship with Caroline Wiles, secure political appointments and other favors.”

That lawsuit suggested Worley’s statements “of significant political power” through his relationship with the Wiles family were exaggerated to give him greater stature in the hemp industry and to attract investors.

Against this backdrop, a recent White House push to delay a ban on virtually all hemp products has generated pushback among Republicans in Congress critical of the hemp industry.

One congressman criticized Worley’s efforts to overturn the ban.

“People can draw whatever conclusion they want about the fact that, you know, a senior White House person’s relative makes millions of dollars from selling this product, including products that end up in children’s hands,” said U.S. Rep. Andy Harris, R-Md., who is pushing back against efforts to delay the ban on hemp products. “It is just not the right thing to do.”

Congress passed a law in November banning nearly all hemp-derived products starting this November. In so doing, federal lawmakers reversed the legalization of hemp that occurred in 2018, which was originally pushed as an economic boon to farmers. Critics of the 2018 legalization contended it ushered in a largely unregulated intoxicating hemp industry that went far beyond what Congress initially intended and allowed products that can be more intoxicating than marijuana to be sold in service stations and over the internet.

Regulators also expressed concern that hemp products could pose threats to consumers because of the chemicals used to turn hemp into products with the psychoactive compound THC that makes people feel high.

Trump signed the hemp ban.

In the last few days, numerous reports said the White House has pushed for nearly a monthlong delay in the hemp ban and has sought a regulatory framework instead that would allow many more hemp products to remain legal.

Last week, Wiles, the chief of staff, made a rare visit to Capitol Hill to huddle with Republican congressional leaders, according to news reports, bringing with her the White House legislative affairs director James Baird. Within days, a stopgap funding bill emerged from GOP leadership that also included a delay in the hemp ban. Some members of Congress have objected and said they will not pass the funding bill if it contains a delay in the ban on most hemp products.

The White House has denied that Wiles directly lobbied Congress to delay the hemp ban.

“The chief of staff has never lobbied in favor of this or any other position on hemp with Capitol Hill,” said White House spokesperson Kush Desai. He added: “The only interest guiding the Trump administration’s decision-making is the best interest of the American people.”

Harris, the Republican congressman, acknowledged he wasn’t privy to the conversations between Wiles and GOP senators, but he insisted the effort to delay the ban had clearly come from the White House and not Congress.

“I don’t know what she discussed with the senators,” Harris said. “I will tell you my impression is that she didn’t really need to discuss anything directly because the (White House) Office of Legislative Affairs was pushing this, as well as, you know, her domestic policy advisers, the White House’s domestic policy advisers.”

The emergence of the proposed delay in the ban as part funding bill was hailed by MC Nutraceuticals in a newsletter it sent to supporters.

“This position exists because the industry showed up,” according to the newsletter. “There’s one more push coming before year-end to make the rules permanent. When we send the word, it’ll matter — and we’ll only send it when it does.”

Harris said he objected to the “chest thumping” from Worley and his father, Jeff Worley, who is the chief financial officer of the company. The congressman said he would work to strip out of any funding legislation the delay in the hemp ban. Meanwhile, U.S. Sen. Ted Budd, R-N.C., was leading efforts in the Senate to keep the original hemp ban implementation date intact.

The U.S. Senate in an overnight vote Saturday approved a short-term measure to fund federal agencies into early December. That bill includes language delaying a national ban on most intoxicating hemp products.

Budd tried to strip the hemp delay from the bill, but the Senate turned aside his effort.

Worley is a member of the board of the trade group Hemp Industry & Farmers of America, which has spent $445,000 on lobbying Congress.

In 2025, the Worleys and their companies agreed to pay $50,000 to settle a consumer protection investigation into their hemp products by Colorado Attorney General Phil Weiser’s office. The settlement document stated that the investigation by the Attorney General’s Office found the companies misrepresented to consumers “the source, quality, characteristics, ingredients and/or health benefits of their products.” The companies also falsely claimed to be operating in Texas when in fact the companies operated solely in Colorado, according to the settlement.

The companies agreed in the settlement to set up an age-verification system for their hemp products.

In December, the Worleys and the companies also agreed to pay a new fine of $75,000 for continuing to solicit Colorado consumers when the attorney general said their products are prohibited from being sold in Colorado. The new settlement stated the companies had continued to improperly test their products in testing laboratories that weren’t certified by state regulators.”

From The Denver Gazette.

Hemp THC Tax: $8,000/Acre

Yale Budget Lab suggests a $0.00625/mg federal tax on THC, at the producer level.

They included what the DEA said about “Marijuana, in its natural form, is one of the safest therapeutically active substances known to man” with what are known as the Sin Taxes: alcohol and tobacco, by the same agency which also taxes firearms and bullets, formerly known as the Bureau of Alcohol, Tobacco, and Firearms (BATF).

Not to bury the lede, but that one acre of hemp will produce enough THC to be taxed at over $8,000 an acre!

Even if growing for grain and producing say half as as much flowers mixed amongst the seeds, say 500 pounds, that’s an unconscionable $4 grand an acre tax on Hemp, making it financially impossible.

That gives you a sense of scale of a tax on a plant not a product like spirits or beer or cigarettes, as if they taxed corn, barley, and tobacco leaves. And more: that plant is ubiquitous, grown in almost every county in the country, even feral in thousands of ditches.

“Federal legalization would raise $57.9 billion over ten years and federal plus remaining state legalization would raise almost double that” at $0.00625/mg THC via TTAB.

“For distilled spirits, the federal rate is $13.50 per proof gallon effectively taxing the pure alcohol content rather than the finished product. (A proof gallon is defined as one liquid gallon at 50 percent alcohol by volume.)

Beer is taxed at $18 per barrel (31 gallons) for large domestic producers, with a reduced rate of $3.50 per barrel on the first 60,000 barrels for domestic brewers producing fewer than two million barrels annually;

wine is taxed on a graduated schedule ranging from $1.07 to $3.40 per wine gallon depending on alcohol content and type, with additional rates for sparkling and artificially carbonated wines.

Cigarettes generally carry a federal excise of $1.0066 per pack of 20 though it differs by the size of the cigarette.

Smokeless tobacco is taxed by weight — $1.51 per pound for chewing tobacco and $26.84 per pound for snuff — and

cigars are subject to an ad valorem rate capped at $0.4026 per cigar depending on size.”

Click here to see the report from Yale.

May be an image of text that says 'Relative Federal Excise Taxes, per Serving $0.4026 $0.3188 $0.0503 $0.0625 $0.0726 $0.0141 $0.1003 10 mg $0.1266 Microbrew Cigs THC Beer Wine, min Spirits Wine, max Source: https:/elalelid TheRichardRoseReport.com Cigars'
May be an image of text that says 'Acre of hemp TC @ 0.3% Milligrams Tax $.00625/ mg Federal Excise Tax IF Applied to HeTp 1000 Ibs dry flowers 3 pounds 1,362,000 454g 454g*1000 1000 $8,512.50 per acre'

Hemp: 15x Cheaper Protein vs Beef

The cost of protein from beef in the U.S. typically ranges from $0.06 to $0.09 per gram of protein, depending on the cut and leanness.

Ground beef averages about $0.063 per gram (roughly $1.84 to $2.12 for a 4-oz serving).

Chicken Breast: $0.039 per gram.

Eggs: $0.059 per gram (depending on local market fluctuations).

Shelled Hempseed: $11/pound @ 31% protein = $0.0075 per gram of protein.

Shelled Hempseed at Costco: $5.85/pound @ 31% protein = $0.0040 per gram of protein.

May be an image of text that says 'Cost Per Gram of Protein $0.0700 $0.0600 $0.0500 $0.0400 $0.0300 $0.0200 $0.0590 $0.0630 $0.0390 $0.0100 $0.0040 $0.0075 $- Costco Shelled Hempseed Hempseed Chicken Breast Eggs Ground beef'

Substitution of fiber hemp for corn did not affect soil greenhouse gas emissions

Interestingly, hemp having significantly less root mass than another common row crop (corn) grown under similar conditions challenged assumptions about hemp’s superiority in carbon sequestration.

Substitution of fiber hemp for corn did not affect soil greenhouse
gas emissions from a Kentucky cropping system

“To test hemp’s reputation as a more climate-friendly crop, we compared soil greenhouse gas fluxes, root mass, and soil carbon from hemp and corn over 2 years.

We found that hemp and corn released similar amounts of greenhouse gas equivalents.

Corn did release more nitrous oxide 1 year, and hemp released more methane early in the season, but these differences balanced out when everything was converted to CO2-equivalents.

One difference was found in the root biomass. Corn had almost four times more in-row root biomass than hemp, which means corn put more carbon into the soil, where it has the potential to stay longer.

As hemp’s root input was less than corn’s, this suggests that hemp may not contribute as much to soil carbon storage.

However, between-row root measurements are needed to scale these findings to the field level.

Our results indicate that fiber hemp may not be as climate-friendly as previously believed and requires more research at a larger scale.”

Click here to download the study [PDF].

Decarboxylation of Hemp

Here’s the 2018 Farm Bill decarb provision that the entire Hempnoid and THCa market ignores in order to exist. It’ll be more obvious in the next one, because reading is hard when it is inconvenient:

“Under Section 297B of the Agricultural Marketing Act of 1946 (added by Section 10113 of Public Law 115-334), the text regarding testing reads:

(2) CONTENTS.—A State or Tribal plan referred to in paragraph (1)—

(A) shall only be required to include— […]

(ii) a procedure for testing, using post-decarboxylation or other similarly reliable methods, delta–9 tetrahydrocannabinol concentration levels of hemp produced in the State or territory of the Indian tribe; […]”