Implementing these ideas in the real world is the entrepreneurial Art. Each region and company has its own strengths and weaknesses that have to be factored into the start-up equation process. That decision process doesn’t work easily in a 5-person panel or a 15-minute talk, so it never gets discussed at a hemp expo.
Here is an imagining of how to go about it in four contexts, how I would approach it in different locales. It’s a matter of figuring out what your strengths are, what unique phenomenon you can leverage such as branding or location or history or whatever, then playing to those strengths. Tasmania, Italy, Colorado, U.S.A.… each has an entirely different set of circumstances to work with. The cookie-cutter approach won’t work, what works in one place won’t necessarily be best elsewhere.
The HempNut brand and its long and positive legacy is still available for a project. Novel processes, inventions, copyrights, goodwill, and cutting-edge new products for mass-market on the drawing board included. Enquire here.
Tasmanian Devils in the Details
In 2018 I was hired for a vertically integrated hempseed food start-up in Tasmania, Australia. An old friend, Robert Connell Clarke, would grow the seed and I would get it into people’s stomachs, then we would move on and let the machine run without us. We were training a new generation of hemp agronomists, hemp food processors, and marketers while also building a new vertical hemp food business from the ground up.
We would use our hempseed grown, and processed on the island off the southern Australia coast, next stop south Antarctica. It lies at 42 South latitude, perfect for growing photoperiod hempseed on poppy fields in a global market for natural-not-synthetic opioids dying as fast as hopeless young people in West Virginia. While regulators demand a fence and security around a hemp field, millions of opium poppies grow 5 meters from the road, protected by only 3 strands of barb wire.
But first, it’s smart to figure out what grows best there for our uses, grain for food. The first year was a 170-acre field trial, with 19 varieties from around the world on the same fields that would later produce it. While Rob and his team tended to the fields, I had to devise a plan for my end. We had no equipment yet for shelling, pressing, processing, or packing, just a warehouse and office with a small test kitchen. The relatively isolated island of Tasmania (pop. 540,000) would be our test market, then roll it out to the Australian mainland once the business model was established.
It was a perfect storm of expertise in production of the seed + expertise in the processing + expertise in turning it into food and branding then marketing it, with good money backing it, and an IPO down the road. But the project imploded when venture capitalists tried to steal it; lesson learned— they ain’t your Bro, no matter how many times they call you that. Don’t ignore red flags.
Until that went down, I sought co-packers locally, the Italian “0 km“ approach; a small local food processor that makes products into which I could easily incorporate shelled hempseed or oil. The Saturday street market delivered a plethora of possibilities: nondairy coconut frozen dessert, soy yogurt, tofu, tempeh, soymilk, aged vegan cheese, baked goods, pizza crusts, veggie burgers. Any one of them would work. I would check out their products and vibe, then ask if they could make a product for us under our label; most said yes. Having my signed hemp cookbook as a calling card helped.
A few hours’ drive north was an aseptic (UHT) milk factory. We met for an afternoon to work out the details for a test run. (If you do that, just know they don’t want to work with noobs; seriously, figure out the workaround such as hiring a consultant first. I already did it in 1997 and spent years in a food factory, so I knew what they wanted to hear.)
I knew the visa issue could likely doom my stay (it did), so I had to work quickly. On my team was a brilliant young natural foods chef, I would show her how to run the aspects of the operation that she could such as product development and interfacing with the co-packers, retailers, and consumers. A “vegan Tasmanian Rachael Ray,” she would be the face of the company who could also assure quality and provide recipes. With a distinct local accent, she is a future video star.
Since the factory wouldn’t be ready for many months, we decided to buy shelled hempseed in the interim with which to make the products, generating cash and testing the business model before bringing it in-house. We did a cutting (comparison) of every brand of shelled hempseed we could find; the variance was remarkable. Ironically, Canah International from Bulgaria was the best.
While they were working on the supply side, I had to figure out the distribution scheme in a land down under where it felt like I was “walking on the ceiling” every day. Dry products are easier to manage, so the first ones would be a muesli, granola, pancake mix, and porridge (all in multiple flavours), a bar, shelled hempseed, hemp protein powder, and hempseed oil; then later aseptic milk. Subsequently, we hoped to introduce the perishable products: cheese, veggie burger, fresh milk for baristas, yogurt, soft-serve frozen dessert mix, bread, and pizza crusts. In an ideal world, the co-packer would also put them into their own distribution channels, but be careful the price at retail isn’t markedly different.
Cultural flavor differences had me concerned, that my California palate would be wildly different than people tens of thousands of miles away on an island in the middle of nowhere. That’s why I wanted to do a “bush flavour” such as “dukkah,” a spicy nutty proud national favorite, and let the chef born a few miles away develop it.
Talk to the Buyers in your local health food stores to find out which distributors they use for your product category, then get Buyer and contact info. Find out the sales broker situation for the store; do they use them, do they like them, do they ever see them? Retailers are likely your ultimate trade customer, so talk to them when they aren’t busy; make an appointment if possible. Don’t take up more than 10 minutes of their time.
Since we were a start-up we didn’t have an existing sales and distribution network like I did in 1994. We weren’t yet even certain what the distribution chain would be since there were many options, including own delivery to the store or even direct to consumers. So without that trade muscle to push the product down to retailers, we would have to push it up instead with a consumer-driven effort.
The strategy was to introduce and sell the products at popular festivals around the island, to build buzz and interest, find the early adopters and get them going. Hemp is unique that way; some people totally LOVE it and become vigorous supporters, verging on the cultish. Done right, they’ll be your best salespeople ever, downright evangelical even. Give out stickers, coupons, and brochures so they can spread the love. Be sure your customers ask for it in stores, that creates a buzz with retailers themselves. Branded lip balm tubes are a great free giveaway for consumers or trade. In the ‘90s, ours proved so popular we had to sell them in a 36-pack display box. I gave away 1,000 at the 2000 Burning Man Festival and got email requests even 10 years later.
We planned to have a booth at the street market to keep the buzz going in the main city, Hobart, and perhaps outfit a street food truck or soft-serve ice cream wagon. Having actual products will get you in the local newspaper, they devour hemp stories and fill them with stoner puns. Chef’s trainings can get you into restaurants.
Only after the requisite early street buzz is created should you go to the independent natural food stores and small local supermarket chains. Having no buzz makes you like the other 99% of companies trying to shove new products down the retail Buyers’ throats. Better to not do that. A few weeks before presenting your line to them, have friends put requests for your product in the store’s suggestion box.
Start with just, say, a dozen or two stores at first. Don’t go hog wild yet. Be more than a little obsessive about this small test, it’s a make-or-break deal. This is where you prove your assumptions about the branding and marketing, find out what the retailer and consumer do and don’t like about it, if the price is an issue and why, how it looks on the shelf (can the words be seen, does it look right), if the shipping box works for the retailer including the exterior printing, if there any returns or spoilage and why, and tons more.
And believe me, at some point someone will say something about the product that you never once considered, and you should re-think everything if they’re right. You have to be willing to start all over from scratch again if your underlying assumptions are wrong. Don’t believe in sunk costs, just try to figure out a way forward using the assets you already have if possible, but for your sake don’t ignore the implications of new information. Maybe it’s a small tweak, maybe it’s a total re-vamp, maybe you walk away completely. It could even trigger an idea that creates an entirely new huge business for you. This is that stage, where the rubber meets the road.
Bias your efforts for success. Have a demo in each store the first week, put up coupons, shelf-talkers, signs, or whatever else you can get away with. Run an ad in their newsletter and put the product on introductory discount of at least 30% for the first month or three (you drop your margin for that, not them). Deliver direct if you need to. Make sure they have enough backstock so they don’t run out.
Yes, marketing is expensive but the fastest way to get shelf placement is by giving away product, “First One’s Free.” It’s also the cheapest for you, as it costs you way less than the retail price they get for it. What’s $10 to them is only about $2-3 for you.
After tweaking the line and marketing for many months of stable sales, we would then use that track record to bring it to other local chains, then the east coast of the mainland where most of the people in the continent/island/nation the size of the lower 48 with less than the population of California live.
Hundreds of millions of people eat hempseed monthly in China, and always have, for millennia. So one product I considered was a packet of our hempseed as a souvenir for Chinese tourists. As many as 30,000 cruise ship passengers would flood Hobart in any month, and (1); they love Tassie and (2) consider it a pristine place, especially for growing food. Thus, 1+2= 50 g packets of hempseed printed in Chinese under the Tasmania® brand.
We looked at food truck menus to see how they could incorporate our hempseed into them. We would give them the material free for the first whatever, say a year, or a maximum amount total. They would put our brand name on the menu, and whatever else we could do such as signs or posters or table tents. In addition, the other food processors in Australia would be offered a sweet deal to add a co-branded hemp line extension.
The reason you want to give away the material to new food service and processing customers is that you want the chance at co-branding, you want to make sure they use the right (best) freshest material, you want to track sales of their hemp product, and you want your product to be specified in order to lock them in. Later on you can start charging them a fair price for it but use discounts to get there, like a 10% co-branding discount and a 10% good customer discount and a 5% prompt payment discount, or whatever. Discounts are like magic, the net price could even be higher, but the fact that you gave them all those discounts makes up for it psychologically.
Look around, see what foods people are making in your area. If I can do it whilst “walking on the ceiling,” so can you.
Hemp Fiber is Italy’s Past But Hemp Grain is Her Future
For years I lived in Heaven, er I mean Italy, where hemp was integrated into culture, industry, and fashion centuries ago. One 11,500-year-old hemp fiber artifact was found near Rome. The oldest cookbook was published there and one recipe contained hemp.
Today, Italy has the best potential to be the world’s supplier of foods made with hempseed. Grain is hemp’s only stable, proven, robust, 100% legal market worldwide; not coincidentally also still the largest, with the most consumers and retailers current and potential, globally. Cannabis Light (smokable hemp) is often the subject of political grandstanding by fascists, and the CBD market is fragmented. Fiber has the history but grain is the future.
However, it’ll take cooperation between Brussels, Rome, the region, and private investors and foundation grants. Public + private money, and of course >1.000 ha of nearby suitable land at a suitable latitude with a suitable environment and suitable access to agronomy equipment, transport, and labor.
The first stage is field trials with a concurrent breeding program. All that before you can install shelling and pressing equipment, then develop products and brands. Simultaneously you could start branding products made elsewhere to generate cash and test your marketing. Once there are products, mass-market marketing is next (“Buy Canapa”).
A seed processing center would give a market to farmers in other regions of Italy and would inspire other brands to introduce a canapa line extension.
It’s a unique opportunity to 1) leverage l’Italia’s traditional strengths (food); 2) support agriculture and industry, especially one attractive to il giovane; 3) reclaim the heritage of canapa; and 4) spawn 1,001 new products and brands, sold from small country restaurants to around the world. There’s no doubt a boatload of E.U. grant money to get it started.
The animal husbandry industry will benefit as well, with access to hempseed products. That helps the hempseed product and processing segments as it provides an outlet for substandard or excess production.
There are already dozens of hemp food brands in Italy. It can’t be done easily with an artisanal approach, as cost reduction is crucial for wide acceptance.
U.S. Hemp: “as American as Apple Pie”
Industrial hemp has long been one of mankind’s oldest and most important crops. It has a glorious history in America older than the nation itself.
Canada has a 20-year headstart in hemp, and it naturally developed an industry around the easiest existing segment: hempseed grain for food. It became 90% of Canadian hemp and hemp’s first billion-dollar segment.
In 2018 hemp was legalized in the U.S. federally after 81 years of onerous, irrational, and unnecessary regulation.
Today, the only proven, stable, 100% legal hemp market also has the largest number of current and potential consumers and wholesale customers, namely foods made from hemp grain (hempseed). It’s so important that USDA tracks the prices of them weekly (see image).
The U.S. is ideally suited for the production of prepared, value-added foods made from U.S.-grown hempseed. The customers are here, the land is here, and the infrastructure ensures low-cost transport whether across town or the globe.
The missing pieces of the supply chain are only production (farming) and primary processing (shelling/pressing). Once processed, it is ready for any restaurant or food manufacturer to use as an ingredient as-is, or for any marketer to private label. Even if U.S. hemp died tomorrow, one could brand and market hemp foods using grain from Canada, Asia, Europe, or South America.
After over eight decades of official institutionalized suppression of industrial hemp solely based on racist tropes and canards, the federal government now has an obligation to develop the U.S. hemp sector properly, like the millions of dollars we saw invested in Canada’s hemp industry. USDA/NIFA should start by funding at least one hempseed shelling and pressing facility, likely in the mid-west.
This would be the fastest way to incentivize the most acres and jump-start U.S. hemp, putting it on a sustainable and competitive footing in a real market, already developed. Bonus: at least four times more stalk than seed, per acre; an industry Win-Win.
Once that is in place, there will need to be money for Marketing, Advertising, and Public Relations. As the highly successful “got milk?“ campaign (and others similarly funded by the federal government) proved, Marketing might be the most important piece, ensuring success and sustainability for the project. To build the processing plant but not fund Marketing and PR would be a monumental mistake, thus most likely to occur at the federal level. This cannot be allowed to happen, it will be slow suicide for the industry. Either get funding committed up-front or don’t start the project. The state government where the plant is located should help as well, with liberal regulation, tax breaks, and marketing money.
The “Rocky Mountain Stool”
Considering Colorado’s historical importance to the hemp movement which helped create hemp’s first legal, sustainable, billion-dollar segment, it would be wise to use state and federal grants to further develop the hemp food industry there, synergistically creating a market for seed to be produced by farmers in the eastern plains, western slope, and/or San Luis Valley.
The economic leverage of such a grant would be great. Colorado could maintain its historical standing in the global hemp marketplace by concentrating on hemp grain, producing the main ingredient for food companies as well as those wanting a finished consumer product such as shelled hempseed or hempseed oil.
Growing seed will produce many times more weight in stalk than seed, which provides the third leg of the hempen “Rocky Mountain Stool” along with the “legs” of hemp grain production and processing. Integrating valorized fiber management can add an income stream for farmers, as well as be a model for responsible hempseed production globally. That might include a decorticator to separate the fibers into its hurd (short fiber) and bast (long fiber) components, both valuable and could be converted into value-added products in the state such as biochar, hempcrete, rope, textiles, animal bedding, or even supercapacitors and batteries.
Adding that income might also be able to reduce the cost of seed to the companies processing it into food. Since shelling takes 2½ pounds to make 1, any reduction on the input side is magnified on output, possibly providing Colorado with a competitive price advantage in the global food market. Pressing for oil is five-to-one, so it’s twice as dramatic. For every pound of oil produced, about four pounds of protein powder is made, again at that lower input cost thus adding yet another potential income stream. Protein powder was once a waste byproduct that hemp oil companies paid pig farmers to haul away daily, now it can be another income stream from what was considered a nuisance.
A seed cleaning, shelling, and oil pressing facility could produce the “primary hemp foods” for sale to those using them to make “secondary hemp foods” such as Nepra Foods and Hemp Way do, or sell as-is branded to consumers. Who doesn’t love Colorado? Done right, the branding of hemp foods made in Colorado from hempseed grown in Colorado would be powerful.
But hemp will not succeed without government help; we’ve seen that in Canada and elsewhere. This is a project that has enormous potential to produce returns and build acres the fastest, with a ready, proven, legal market and ideal growing conditions in a traditional food-farming state. The processors are here, the market is here, all they need is a little help tying it all together. For a company to succeed in hemp and rise out of Colorado to feed the world in a big way, it’ll take close cooperation between farmers and processors. But to start that off requires grant money from the USDA, the state, and private sources.
This project could enhance food security in the state, easily allow under-served communities to start businesses, and inspire young people to return to the farm. Around the world, it is difficult to keep young people interested in farming. The lure of the city, university, and the perception of a “better” life off the farm or rural area has impacted agriculture, families, and food security. The challenge is to make farming profitable thus sustainable, and “cool” enough for today’s generation to remain happily engaged in such a hard but rewarding career.
The Value The Seed and Hemp Exemption recommendations loosening irrational federal restrictions on farmers would help the project immensely.
Seed and fiber need to work together in the future, since where there is hempseed there is way more fiber, and often where there is fiber there is seed. Some fiber uses require harvesting before flowering and thus no seed, while other fiber applications do not. These projects need to allow farmers to harvest and process both in order to maximize returns. Cannabinoids should not be an explicit part of the project, although it is understood trichomes (cannabinoids and essential oil) may be harvested as a tertiary processing stream resource.
Therefore, USDA should make a grant to any domestic entity for projects:
- Able to sign up enough farms for 100,000 acres minimum for seed and fiber processing before launching
- A minimum of $50 million up to $750 million per project, amount decided by a team just for this purpose, up to and including 100%
- For production of primary materials and/or branded CPGs and secondary products
- Must be able to produce and process both the stalk and seed, processing all of both except for normal losses, but not cannabinoids
- Should be used as a food security project, and as a model to duplicate elsewhere
- USDA shouldn’t limit it by state but entities can, to create a state-branded line
- Foreign ownership limited to 5% maximum
- Any type of entity legal structure
- Project must last 15 years minimum
- Farmers must not be in a weak position to the entity, best if farmer-owned
- All pricing forecasts must be fair to the farmer and account for transport costs
- Mandating certified varieties discourages innovation
- Genetic and ownership transparency
- Genetic engineering such as CRISPR allowed, but not fermentation other than of the actual seed; must be phyto Cannabis, any subspecies
- Entities must have a track record of farming or processing, but not marijuana
- Goal should be 100,000 acres, then 500,000 acres, then 10 million acres, then 100 million (equaling each current corn and soy production)
- Make it easy to apply, with few hurdles
Frame it as a “Marshall Plan for Hemp.” It’s fitting as it heals generations of “regulatory bombing” of the hemp community by the federal government:
“The Marshall Plan was a U.S. program providing aid to Western Europe following the devastation of World War II. It was enacted in 1948 and provided more than $15 billion to help finance rebuilding efforts on the continent.
The brainchild of U.S. Secretary of State George C. Marshall, for whom it was named, it was crafted as a four-year plan to reconstruct cities, industries and infrastructure heavily damaged during the war and to remove trade barriers between European neighbors— as well as foster commerce between those countries and the United States.”
The above was excerpted from “Seedy!” by Richard Rose, a free ebook released in 2024. “Seedy!” or How To Start A Hemp Food Business reveals how to do well by doing good with hemp foods. Seedy! is 177 pages, 52,000 words, 200 images, and thousands of links. Cost: free. Value: priceless. Never before has an industry insider pulled back the curtain on the successful strategies used to create hemp’s biggest industry segment. Part how-to, part hemp history, part self-help guide.
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