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Need seen for hemp processing facilities

Geoff Whaling, chairman of the National Hemp Association, believes that day is not far off — based on passage of the 2018 federal farm bill, which legalized cultivation of industrial hemp in the U.S.

“The potential is enormous,” said Whaling, also president of the Berks County-based Pennsylvania Hemp Industry Council.

However, he worries that there will be a glut of hemp in Pennsylvania — the epicenter of U.S. hemp farming before World War II — more than a small number of processors can take on.

“My fear is what we will do with all of this hemp,” he said, noting that he hopes to see more processing facilities spring up.

Whaling could play a big role in that.

He is a strategic adviser for Canopy Growth USA LLC, a subsidiary of Canadian cannabis and hemp company Canopy Growth Corp. His jobs entails finding places to build hubs that can match farmers with companies looking to turn hemp into everything from textiles and construction materials to health and food products.

Canopy Growth already is planning one park, albeit in Binghamton, New York. The company expects to invest up to $150 million in a hemp processing center that would buy hemp from farmers within about 50 miles, including parts of northern Pennsylvania.

Whaling believes Pennsylvania could be a hotbed for hemp industrial parks. But he said the commonwealth needs to pass legislation to recognize hemp so it can be regulated like other food ingredients and commodities. State Sen. Judy Schwank (D-Berks) has proposed such a bill, but it remains in committee.

“We want to be able to be assured that all parts of the hemp crop can be processed and taken to market,” Whaling said.

Schwank’s bill would help Pennsylvania court hemp processors, which could revive vacant manufacturing facilities and possibly lead to new ones. Whaling has previously said the Lehigh Valley would be ideal for hemp processors because of research already being conducted in the area by the Rodale Institute and Lehigh University.

In the meantime, Pennsylvania and other states are waiting for the U.S. Department of Agriculture to develop federal rules and approve state plans to monitor hemp cultivation and production. USDA has said the regulatory framework might not be in place until the 2020 growing season.

Jumpstart

As government processes unfold, some business owners are getting an early start on hemp.

Steve Groff, owner of Wyndridge Farm in York Township and a licensed physician, recently purchased a $1.5 million hemp-processing machine named the HempTrain that will be installed in an 80,000-square foot warehouse in Red Lion later this summer.

Groff’s processing center is believed to be the first of its kind in the U.S. and will allow for large-scale agricultural production. The machine can break down hemp bales into three parts: two different types of fiber and one part clean biomass. The clean biomass contains cannabinoids, one of which is the popular CBD used in health products.

Other processing facilities could follow, according to real estate professionals like Jim Scott of Colliers International.

Scott, who specializes in commercial and industrial properties in the Philadelphia region, said there is a lot of demand for smaller processing facilities.

He has been fielding inquiries from companies that make hemp products, including CBD oil, that are looking for existing buildings of 5,000 square feet to 25,000 square feet.

Industrial real estate experts in Central Pennsylvania have been mum on hemp inquiries. However, several saw an uptick in calls about old manufacturing and warehouse sites in recent years as Pennsylvania handed out permits to grow and process medical marijuana. Hemp calls could follow.

“I think it’s something that will develop into a niche market,” Scott said.

Hemp on the move

If they want hemp material for building projects or other products now, U.S. companies have to import it from Europe and other countries.

But a trio of Greater Lehigh Valley business owners is optimistic that a domestic supply chain around hemp materials will take hold in Pennsylvania.

Drew Oberholtzer, Ana Konopitskaya and Cameron McIntosh are partners in two businesses that are building projects using imported hemp materials.

Oberholtzer and Konopitskaya own a Berks County architecture and design firm called Coexist Build. McIntosh owns a company in Lehigh County called Americhanvre, which makes planter boxes out of hemp. The two firms are operating under a joint-venture agreement to offer design-build services to build products and structures with hemp materials, including hempcrete.

Hempcrete, also known as hemp lime, is made from a mixture of hemp, lime and water. It is a non-structural material that is cast in block around a wood, steel or concrete frame to build and insulate walls, which can be covered with lime plaster and paint.

Coexist and Americhanvre are using hempcrete to build a mobile home, which they plan to bring to the Cannabis World Congress and Business Exposition in New York in May.

The model home is being built on an 18-foot flatbed equipment trailer with about 600 pounds of hemp hurd, which is imported from Europe and turned into hempcrete.

“One of its greatest attributes is thermal mass, which means it’s good at absorbing energy,” McIntosh said. “It is superior to traditional insulation.”

He said hempcrete can replace drywall and insulation. But it is more expensive because of the labor involved to pack it into forms to cure and harden. Importing hemp hurd also bumps up the cost.

“Proximity to processing facilities will make it less expensive,” McIntosh said.

The partners believe that lower costs will lead to the proliferation of products like precast hempcrete blocks and panels, which can speed up the construction process.

But hemp companies will need to get their products certified as safe by U.S. organizations such as the International Code Council and the American Society of Testing and Materials before hemp can catch on more broadly with builders.

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