Come Grow With Us
The National Hemp Growers Cooperative is laying the foundation for its members to profit in more than one way from their crops.
As the domestic hemp industry slowly moves from infancy toward adulthood, one fledgling organization is establishing a foothold to ensure that hemp growers prosper in coming years.
The National Hemp Growers Cooperative began in 2019 with the goal of building wealth for its members, said Nick Walters, the co-op's managing partner since its inception and one of its founders. In the process, the organization's activities will help to strengthen and expand the nascent industrial hemp sector, and they will promote sound stewardship of the environment through actions like soil-restoring growing practices and non-polluting business operations, he said in an interview.
The co-op is presently focused on recruiting hemp growers, be they experienced farmers with large-scale operations, socially disadvantaged small-scale part-time growers, or interested persons entirely new to cultivating a crop, he said. The co-op is based in Jackson, Miss., where Walters resides. Participation from all three groups will be vital for the hemp industry to thrive, so the co-op is going to great effort to engage them all, he said.
"There are a lot of people who have never farmed or been in production agriculture before who would really like to participate," said Walters. "You can either figure this out on your own, or you can have somebody come along with you to help you so you can be a part of this hemp economy," he said. To convey a welcoming tone to the novice, the co-op's management team deliberately chose to use "growers" and not "farmers" in the co-op's name, he said.
Takeaways
1. The National Hemp Growers Cooperative seeks to create sustained demand for its members' crops by establishing "value-added" business ventures that manufacture hemp-based products.
2. The co-op aims to attract experienced farmers, socially disadvantaged small-scale growers, and first-time "newbie" cultivators to its ranks.
3. Member growers will get paid for their harvests and share in the net profits of each value-added project nation-wide.
Nick Walters, National Hemp Growers Cooperative managing partner, speaks to attendees of the hemp field day that the co-op hosted at Alcorn State University’s research farm on June 6, 2022, in Mound Bayou, Miss. Photo courtesy of the National Hemp Growers Cooperative
Equally important to that outreach, the co-op's management team is busily pursuing opportunities to create business ventures that would utilize member growers' hemp to bring to market innovative, Earth-friendly products across multiple sectors of the economy (e.g., automotive, energy, food, packaging, textiles), he said. Walters calls these "value-added" commercialization projects; the co-op will consider each a separate business unit, he said.
Member growers would get paid to supply their hemp crops to the value-added venture in their local area. The co-op would negotiate the offtake agreements on their behalf, said Walters. The growers would have the security of knowing that there's a purchaser for their crop even before they plant it. Normally, it would be growers who are within about a 150-mile radius of a processing or manufacturing plant who would have the opportunity to supply the hemp, he said. That thinking is consistent with the hemp industry's focus on establishing regional hubs of processing and manufacturing that utilize local supplies of hemp.
“I am most proud of the conversations we have with all three of the different types of grower groups. Each has understood that our model is unique, and is impactful, and can have value to them.”
The member growers also would share in the net profits of that business unit—and of every other co-op-affiliated operation around the country, said Walters. This will come in the form of an annual dividend payment, a perk that he said distinguishes this organization from other cooperatives. In fact, the dividend payment represents a paradigm shift in how growers should weigh the merits of whether to plant, said Walters during a July 2022 webinar. Growers traditionally based that decision on how much money they would make per acre grown or per ton of plant material yielded. With the co-op, wound-be growers' deliberations would involve not only that, but also their opportunities for building wealth through the dividend payments, he said.
There is a membership option for non-growers, too, said Walters during our interview. This is meant for people who wish to support the co-op—and the hemp industry, more broadly—while also enjoying a return on their investment: They, too, would receive the dividend payment.
Hemp of the Bialobrzeskie variety just prior to its harvest in southern Colorado in late summer 2022. Farmers in Europe historically grew this hemp type for its fiber. Photo downloaded from Independent Hemp LinkedIn page
Rooting
The co-op is still in its formative stage, just like the industry it represents. In fact, when we speak today of the "co-op," we are referring to a limited liability corporation (LLC) with the management team in place. In addition to Walters, the team comprises Dr. J. David Cornett, chief agronomist; Max Howell, national membership coordinator; Russell Laird, vice president of strategic partnerships; and Larry Tyler, chief financial officer. There is also a small support staff.
This cadre of professionals is laying the foundation for the LLC's conversion at some point to the full-fledged co-op with a board of directors in charge. The co-op will offer a stock for purchase as the main condition of membership in return for numerous educational, money-saving, and wealth-creating benefits. Members will pay an annual fee.
The co-op is not a trade association, nor will it lobby or make public policy, and nor will it be beholden to any vendor or corporation, according to information posted at its website.
Man of Many Hats
A native Mississippian, Walters grew up in Wiggins, a city southeast of Jackson closer to the Gulf of Mexico. He brings years of experience in economic development, financing, grant writing, and public policy to the table, including knowing a great deal about cooperatives and how to connect disparate streams of private and public funding for a project. One career stop in the early 2000s saw him serve more than five years as Mississippi's state director of rural development within the U.S. Department of Agriculture (USDA). Then-President George W. Bush appointed him to the position.
As another arrow in his quiver of bona fides, Walters years ago graduated the Development Finance Certified Professional Program that the Columbus, Ohio-based Council of Development Finance Agencies (CDFA) offers. In fact, he was the first-ever non-CDFA staff member to earn this comprehensive certification from this national organization, confirmed a council official.
“We have one goal: Building wealth for our members through regenerative agriculture and sustainable development.
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Walters is active at senior levels in other hemp organizations, too. For one, he is a board member of the Global Hemp Association. Based out of Riverton, Utah, the association seeks to build a secure, transparent, and trusted infrastructure for the global hemp industry: one that connects farmers, processors, manufacturers, and markets. He is also Region 10 director (covering the Southeast) for the U.S. Hemp Building Association (USHBA) which promotes the use of hemp as a sustainable building resource and is leading efforts to get hemp building materials adopted in international residential building codes.
He still has side jobs, too, although at some point he said he'd like to devote himself to hemp. "I continue my grant-writing business and still have got some financial services work that I do," he said. His grant-writing business is Easy Grant$.
As part of the co-op’s outreach, Walters hosts the weekly podcast, The Industrial Hemp Grower's Digest. On it, he interviews key players in the hemp industry including advocates, analysts, growers, researchers, seed providers, entrepreneurs, product developers, and product manufacturers. Once a month, an episode features a legal update on hemp issues.
Timing
While Walters said he'd ideally like to see the transition to "the full co-op mode" happen in mid-2023 after the hemp grow season, he made clear this is not a schedule-driven event, but rather will come only when the right conditions are in place. "There is kind of a sweet spot in there somewhere," he said. "We'd like it to be tomorrow. We would like it to have been last week that we converted, but we're not there yet."
Among the determining factors will be having enough members signed on and having a decent spread of them around the country—as opposed to them being concentrated in the American Southeast, said Walters. Also, he said he'd like to have at least four or five value-added projects solidified, with offtake contracts in hand for members growers' hemp and customers committed to purchase the hemp products that roll out of those manufacturing operations. "That is going to make the value of the stock go up because of the potential revenue that is going to be coming into the co-op," he said.
J. David Cornett (center), National Hemp Growers Cooperative agronomist, speaks with visitors to the co-op's table on the exhibit floor at the 2022 Southern Hemp Expo in August 2022 in Nashville, Tenn. Photo courtesy of the National Hemp Growers Cooperative
Already, the co-op’s management team has made notable inroads. "We've got about 10-and-a-half legitimate projects that we are aggressively working on, and we've probably got another eight where we are still in the negotiation-conversation stage," said Walters.
Commercialization Projects
A venture that Walters thought might be one of the first to come to fruition involves constructing a facility in the Southeast that would produce hemp-based energy pellets for power plants in Europe to burn to generate electricity. Already, he said, the co-op has a letter of intent (LOI) to partner with German company Amandus Kahl which manufactures pellet mills. (Such letters generally signify a commitment by the parties to progress to actual contracts as the project matures.) The co-op and Amandus Kahl also are exploring other locations for additional production sites, he said.
A second venture also at a more-advanced stage of coming together calls for building a plant in southwest Missouri for making hemp-based kitty litter, said Walters.
A third project—with huge potential, but a longer timeline—calls for erecting a $125 million facility in the southeastern corner of Missouri to supply renewable natural gas (RNG) to power a plant that Circular SynTech (CST), a maker of renewable chemicals, is building there in New Madrid, said Walters. (RNG is methane that results from the decomposition of organic materials.) Hemp would be one of the organic materials (a.k.a. biomass) used to generate the gas. "The revenue that comes from [this project] is going to be tremendous," he said during the July 2022 webinar. Here, too, there is a signed letter of intent in place with CST, he said during our interview.
“Absolutely, we are buying hemp from our members first unless there is some reason we cannot get enough supply.”
There are also discussions on hemp protein (derived from the seeds) initiatives for animal or human consumption that could bear fruit sooner than later. Plus, there is the possibility that the co-op becomes involved with supplying "hempcrete" to builders once it is adopted in international residential building codes, said Walters. Hempcrete is an insulative material for walls, ceilings, and floors made of hemp hurd—the woody material inside the hemp stalk—along with lime and water. (The name is misleading since it's not a straight-up replacement for concrete. Some prefer to call it “hemp-lime,” instead.)
Other value-added projects under exploration include hemp's use in automobile panels, eating utensils, and packaging, said Walters. "We are at different stages of conversation," he said. "Some [potential partners] need supply, some of them need cash, some of them need to understand what the offtake agreements are going to be. We've had deals that we've looked at and said, 'I don’t think this is something we want to do.'"
Until the co-op has a duly-constituted board of directors in place, the management team has brought on an advisory board to help to guide it. The advisory board currently stands at eight members, but Walters said he would like to see that number grow. The advisors come from diverse backgrounds (click here to view their bios and photos). Some are steeped in hemp knowledge. Others are not even involved in the hemp industry right now, but Walters said such outside perspectives are extremely valuable.
For example, the advisory board's newest member is Johannes Escudero, founder and chief executive officer of the Coalition for Renewable Natural Gas, based in Sacramento, Calif. "He is not going to grow hemp, but he has got a lot of insight to what is going on in that particular segment that certainly matters a lot to us," said Walters, referencing the project with Circular SynTech.
A harvest of hemp in Kentucky. Photo courtesy of Matt Barton, University of Kentucky Ag Communications
Big Tent
The value-added commercialization projects would require sizable amounts of hemp. That's why the co-op is engaging the three sets of would-be growers, said Walters. They are:
* "newbies": those who have no experience at all growing, but are intrigued by hemp and considering cultivating it on a small scale, but would require mentoring and support to get going;
* "underserved" farmers: those who have some experience growing crops on a small scale, not as a full-time endeavor, but could do more farming if given support and an offtake market for their new crop; and
* farmers already in large-scale production agriculture: those who are considering incorporating hemp as a rotation crop in their operations or who already are growing some amount of hemp but are waiting to commit.
"We could never fulfill a contract with people who were newbie growers who only have maybe 18 acres that they are growing," said Walters. "We'd never be able to get enough volume, so we’ve got to have the larger producer. But if all we did was focus on the larger producer, then we are leaving out so many other people who could participate."
“We wish it was moving quicker, but we have to continually remind ourselves … that this is going to take time and we’re in it for the long haul.”
Healthy Tension
The management team is connecting with prospective growers through activities like educational outreach and agronomic mentoring, including advice on which seeds might grow best in their area. In June 2022, for instance, the co-op hosted a combination field day and mini conference in Mound Bayou, Miss., and Cleveland, Miss., respectively, in partnership with Alcorn State University.
"We have got to get enough people get educated enough so that they feel comfortable to grow," said Walters. "We've got to know that they can grow hemp or not." This means ideally having gone through one grow season even if they didn’t harvest the hemp, he said. "Those things have to be figured out before we would ever want to go and contract with somebody," he said.
Indeed, the co-op cannot commit to contracts to supply hemp if there are not enough growers lined up and ready to go, said Walters. At the same time, there must be projects at sufficient levels of maturity to motivate would-be growers to commit, he said. This "healthy tension" is prevalent across the hemp industry today, he said.
Four or Five, Two of Three
Hemp has the potential to become one of the country's top four or five crops already by the end of this decade (behind corn, soy, wheat, and perhaps cotton), say hemp analysts. Of the hemp industry's three main sectors, the co-op is involved in two: fiber (i.e., bast fiber, hurd) and grain (i.e., seed), leaning slightly more on the fiber side. These are the two sectors expected to dominate the hemp industry in coming years.
The co-op does not intend to be involved with cannabinoids, the third sector, said Walters. Cannabinoids are the chemical substances found in the plant's flowers and leaves, like cannabidiol (CBD), which may have benefits when ingested, such as diminishing pain, alleviating inflammation, and easing anxiety. Another cannabinoid, tetrahydrocannabinol (THC), is intoxicating when consumed in sufficient amounts, so the government regulates it. This oversight impacts the fiber and grain sectors today, since growers of fiber and grain varieties of hemp must still comply with the same regulations and compliance testing.
Nick Walters (right), National Hemp Growers Cooperative managing partner, talking hemp on the exhibit floor at the KushCon cannabis and hemp conference in August 2022 in Tampa, Fla. Photo courtesy of the National Hemp Growers Cooperative
Business Units
The co-op will have an ownership share in every business unit of at least 20 percent to 25 percent, said Walters. Just how much ownership the co-op has will depend on the particular project. "We're expecting that there will be a different business structure in every one of those, and we want to be flexible-enough based off of what the contract is for and not dictate that," he said. Financing will vary for each project; it would include the co-op's ownership stake and then some combination of investors, business partners, and, in some cases, individual co-op members who might choose to invest directly in the unit, perhaps rolling their dividends back into the project, said Walters. There could be scenarios in which the co-op owns 100 percent of a business unit, he said. "We'd like to own 100 percent of it every time. It's not realistic, but we think it’s certainly best for our growers because their dividend payment is going to go up," he said. Each business unit will stand on its own merits.
With the energy-pellet project in development with Amandus Kahl, the co-op "may own 100 percent" of the production facility, said Walters. It would be the lead for building and operating the plant, with Amandus Kahl providing the production equipment, he said. Amandus Kahl also would act as the "go-between" for the co-op to sell the pellets to European power companies, he said. Research is underway to determine the best formula for the pellets. "It could be a mix of biomass, or it might just be straight-up hemp," he said.
Conversely, the kitty litter project in southwest Missouri likely would have a quite different ownership arrangement, said Walters. The potential partners in this deal would provide the processing equipment and the offtake contracts for the kitty litter, he said. "Well guess what? They're going to absolutely have super-majority ownership of that facility because that's what they are bringing to the table," he said. The co-op would supply the hemp as well as financing to sustain the plant's operations, he said. "We may not even be the ones to manage that facility," he said.
The minimum ownership percentage share is one of two non-negotiable terms that the co-op brings into any negotiations, said Walters. The other term: "Absolutely, we are buying hemp from our members first unless there is some reason we cannot get enough supply that we have to go to somebody else to contract with." he said.
“We’re expecting that there will be a different business structure in every one of those [value-added projects].”
Regenerative and Sustainable
The co-op's full mission statement highlights creating wealth for its members "through regenerative agriculture and sustainable development." Generally speaking, regenerative agriculture has four main attributes: no tilling of soil, continual cover crops to prevent topsoil erosion, rotating crops each planting season, and allowing pasture animals to graze on land. These practices are meant to renew soil health and sequester carbon in the soil instead of releasing more carbon dioxide in the atmosphere. However, there is no standard definition of regenerative agriculture, and there are some major deviations, like some advocates tying organic farming practices to it while other don’t.
To provide member growers with guidance, Walters said the co-op’s management team was drafting a list of the practices it would consider to be regenerative in nature. "Our definition will be an iterative process," evolving as more insights emerge, he said. The co-op would never tell its growers how they must cultivate, but there might be times when prospective business partners or customers stipulate that they would only accept hemp grown using regenerative practices, he said.
"Sustainable development" means acting in a manner that can be maintained over time without depleting the environment. Hemp, for example, is an easily renewable resource that pulls toxins out of the soil. This approach also encompasses how the co-op's facilities would operate, said Walters. An example would be the co-op and a business partner choosing a design for a manufacturing plant that features a power-generation system that does not emit carbon dioxide in the atmosphere, he said.
Hemp bast fiber on display at the 2021 Southern Hemp Expo in Raleigh, N.C. Photo by Michael Sirak
Forming Bonds
Walters and his colleagues also are establishing partnerships with organizations that are advancing the use of hemp fiber and grain. In early September 2022, the co-op signed an agreement with Troy University in Troy, Ala., to perform research on hemp-fiber-based bioplastics at the institution’s Center for Materials Manufacturing Sciences. Further, the co-op recently joined the Hemp Research Consortium which launched in March 2022 within USDA's Foundation for Food & Agriculture Research (FFAR) that seeks to fill knowledge gaps on hemp via research funded by the federal government and matching dollars from private industry. "We're looking forward to what this ongoing research will do," said Walters, noting that the co-op would contribute money to it.
The consortium is made up of Cornell University in Ithaca, N.Y.; North Carolina State University in Raleigh; and the University of Kentucky in Lexington—three universities known for leading research in the hemp field—along with a small group of hemp companies (e.g., IND Hemp of Fort Benton, Mont.). The co-op may ask the consortium for help in determining the best varieties of hemp for generating renewable natural gas to support its project with Circular SynTech, he said.
Among its other affiliations, the co-op is a member of the Hemp Feed Coalition which is working to gain federal government approval for using hemp and its byproducts as animal feed. It is also a corporate member of the aforementioned U.S. Hemp Building Association.
“There are a lot of people who have never farmed or been in production agriculture before who would really like to participate in the hemp industry.”
Membership Types
There will be two types of co-op membership: common stockholders (i.e., the growers) with voting rights and preferred stockholders (i.e., the non-growers) without voting rights. Among the criteria to be a common stockholder, one must be a U.S. citizen and have a license to grow hemp. Whether one grows thousands of acres or only a small field, one license means an equal voice in the co-op, said Walters. "It doesn't matter how many acres you grow for you to have a voice, and that's important to us," he said.
The voting rights of common stockholders are based on a "republic" model. This means common stockholders will vote for the delegates who will represent the region of the country from which they come. The delegates will be other common stockholders from the states or territories within that region. The co-op divides the country into four regions:
Atlantic: Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia;
Mid-West: Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, South Dakota, Wisconsin, Wyoming;
South: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Puerto Rico, South Carolina, Tennessee, Texas, U.S. Virgin Islands, Virginia; and
West: Alaska, American Samoa, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, New Mexico, Northern Mariana Islands, Oregon, Utah, Washington.
At the co-op's annual national convention, the delegates will select the national board members who will represent their respective regions. Each region will have three members on the board to speak for its interests; this method will apply for choosing 12 of the board's 13 members.
This type of governance has the advantage that not every non-consequential matter has to be put to a vote of all members. That prevents the scenario in which the co-op's ability to function at a national level could be hobbled, especially when it's in its infancy, by internal bickering, said Walters, noting that he's seen such in-fighting doom other cooperatives. "They hit a wall. Everybody wants to put their two cents in. It can get a little messy," he said.
Preferred stockholders will select at large the national board's 13th member each year. This membership group will be where "the bulk" of the co-op's membership money will come from, said Walters.
Bags of hemp hurd on display at the 2021 Southern Hemp Expo in Raleigh, N.C. Hurd is a component of hempcrete, an insulative building material, and also has use as animal bedding. Photo by Michael Sirak
Hold Me a Spot
The co-op has been accepting pre-launch members. By paying $1,400, the co-op saves a person a spot as a member once it offers the initial stock, according to a document the co-op shares with interested parties. For growers, this entitles them access to the co-op's services already available today, such as seed advice and agronomic mentoring. When the co-op makes the initial stock offering, it will apply $1,000 of what each pre-launch member has paid towards that person's stock purchase, states the document.
The co-op seeks a maximum of 200 pre-launch members before it formally launches, according to the same document. Already by summer 2022 nearly 50 people have signed up, said Walters. "I would say 90 percent of those are either an underserved farmer or they are a brand-new grower," he said. "They really need somebody to kind of hold their hand and walk them through the process … so they can be ready to go whenever we do a membership," he said. Several pre-launch members will be preferred stockholders at launch. "They understand that [their investment] is 'patient money,' and so they know that it will be a while before we actually convert over," he said.
Another 100 or so additional people have said, "'When you are going to bring a production facility somewhere near me, call me back and let me know because I'd like to be a part,'" said Walters. And that number does not include the ongoing conversations that the co-op's management team has with other would-be growers and existing farmers in about 22 states who are still mulling whether to grow hemp and to join the co-op, he noted.
So far, most pre-launch members are in the Southeast, with small pockets in states like New York and South Dakota, said Walters. "We don’t have hardly anyone right now in the Northeast," he said. The management team has been reaching out of late to growers in the Atlantic states, the Midwest, and Pacific Northwest, said Walters. In fact, he traveled to Oregon, northern California, and Washington in July 2022 to meet with growers. Having members distributed across the country is necessary since there must be representatives from each of the co-op's four regions on the board of directors, he said.
“We take the science very seriously. We have a fiduciary responsibility to our growers to let them know we’ve done all of the vetting possible.”
Conversion
When the day comes for the co-op's formal launch, the management team will issue the offering document for the stock, said Walters. Because of the preferred stockholder option for non-growers, the document, per U.S. securities law, must contain forward-looking statements on potential rates of return on investment, he said. "We have to get [the documentation] all correct," he said, noting that this adds complexity to the launch preparations.
Walters said the co-op’s management team doesn't know yet what the stock valuation will be at initial offering. When asked to provide a rough ballpark range, he said. "I would say the floor is probably $1,500, something like that." As for the potential ceiling: "We don't think it’s going to be any more than maybe $4,000 to $5,000," he said. He added the caveat: "Let me be clear about that—that's just a guess."
All value-added projects being negotiated now will seamlessly shift over to the co-op after its launch, said Walters. "Every single deal that we get involved in right now with the LLC, every single one, will be automatically converted over to the co-op, day one," he said. "It's important for us to let our pre-launch members know there are no side deals that we are involved in."
Once constituted, the 13-member board of directors will function as the co-op's representative body and determine policy direction. It will select a five-member voting executive committee to oversee the co-op's day-to-day operations. There will also be any additional full-time staff or contracted support that the committee brings on. Walters said he expects that the advisory board will remain a fixture of the co-op, too.
The National Hemp Growers Cooperative is conducting seed trials to identify hemp varieties cultivated for fiber that will grow well in the American Southeast. Photo downloaded from New West Genetics’ Facebook page
More Membership Perks
Member growers will enjoy benefits beyond having a buyer for their hemp and getting the dividend payment. They will have access to agronomic mentoring on best growing practices; support with marketing crops and lab testing; in-house farm and project financing; and legal representation, according to the co-op's website.
They will have opportunities to save money, too, through the co-op's bulk buys of hardware (e.g., planting equipment) and services (e.g., insurance), said Walters. For example, when there is enough demand from pre-launch members today—and subsequently from member growers after launch—the co-op could make bulk purchases of co-op-vetted seeds and offer price discounts on them, he said. "We don’t have to wait for the co-op to launch to offer some of those price breaks. But we do have to have enough purchase power," he said. Similarly, the co-op, with enough member growers in its ranks, could negotiate deals for discounted rates on insurance (e.g., crop, casualty, health, property), he said.
In December 2021, the co-op partnered with RainStar Capital Group of Grand Rapids, Mich., to assist member growers with capital needs, be they for a land purchase, a purchase or lease of equipment, and/or working capital. RainStar's financing support for on-farm operations "doesn’t have to be strictly for the hemp," said Walters.
The co-op could also provide shared harvesting equipment for a given area, particularly for use by its newbie growers and underserved farmers who just wouldn't have the cash to invest in the specialized equipment on their own, said Walters. Another support scenario described at the co-op's website entails member growers in a state pulling their resources to invest in a regional facility for drying their hemp. The co-op could assist them in ways like site selection and securing economic development grants, according to the website.
The co-op will even offer retirement benefits: Members will have the option of taking their annual dividend and rolling it into an investment account or moving their existing investment portfolio into the co-op's investment services, states the website.
Walters said he thinks the co-op would gradually phase in all of these services over time, with member feedback determining the priorities.
“Every single deal that we get involved in right now with the [limited liability corporation], every single one, will be automatically converted over to the coop, day one.”
Land-Grant Institutions
The co-op intends to work closely with land-grant colleges and universities across the country, said Walters. These federally funded institutions provide agricultural education and conduct research (e.g., plant breeding, soil health, pest management, productivity). They have access to federal land in their respective state or territory on which to conduct experiments. There is at least one land-grant institution in each of the 50 states, the District of Columbia, and each U.S. territory.
These institutions also offer cooperative extension services to help farmers to put into practice research findings and to apply growing and harvesting methods and learn other skills such as how to budget properly for growing a crop. Some states have extension offices in every county and might also have regional extension agents that cover multiple counties; extension employees sometimes go out to farms for in-person, on-site support.
Since not all land-grant institutions have added a hemp component to their cooperative extension services, not yet at least, the co-op would try to fill in gaps of support for its member growers in given areas, said Walters. For example, the co-op is interested in creating "strike force teams" of experienced hemp growers who could visit the farm of a new or inexperienced grower, or connect with that grower virtually, to assist him/her in starting out, he said during the July 2022 webinar. "There's nothing like getting help from your neighbor or somebody else who can relate to you," he said.
A hempcrete block on display at the 2021 Northern Colorado Hemp Expo in Denver. Photo by Michael Sirak
Field Days and 1890s
The field day and mini conference in June 2022 drew some 85 people, said Walters during our interview. "Many had never grown anything before," he said. The field day took place at Alcorn State's research farm in Mound Bayou. It included a hemp planting demonstration and a regenerative farming session. On the next day, attendees gathered in Cleveland for presentations from representatives of hemp advocacy groups and product companies. Hemp products were on display and hemp food was served. One of the speakers on the second day was William "Bill" Richmond, chief of the USDA's Domestic Hemp Production Program. "I think the format was a good one," said Walters.
Alcorn State, which has its main campus in Lorman, southwest of Jackson, is a land-grant institution. It is also one of the country's historically black colleges and universities (HBCUs). Some of these are also land-grant institutions. Those HBCUs that acquired land-grant status in 1890 are known as "1890 land-grant institutions."
Walters said the co-op would like to make the field day/mini conference an annual event and even is toying with the idea of hosting multiple ones each year around the country. There is interest in working specifically with 1890 land-grant institutions, or any other land-grant university with a cooperative extension service, for that matter, he said. "We think it would be important to partner with them because they are very close to the growers and farmers," he said.
“We don’t have to wait for the coop to launch to offer some of those price breaks. But we do have to have enough purchase power.”
Seed Trials
The co-op began seed trials in 2021 to identify fiber varieties that will grow well in the American Southeast. "The reason why we focused on the Southeast is because that's where the black hole exists of information on growing for fiber," said Walters. "A really good trial, as I understand, it takes about three years of growth season, probably five, before you know you have the right information." he said. At some point the co-op would like to expand the trials beyond the Southeast, "but only in conjunction with seed companies that are very serious about the genetics of their seeds," he said.
Co-op agronomist Cornett already has identified four companies whose seeds the co-op now recommends: Ecofibre of Australia; International Hemp of Lake Worth, Fla.; New West Genetics of Fort Collins, Colo.; and Verve Seed Solutions out of Canada. "We believe [these companies] are quality," said Walters. "We understand that they understand their genetics. That's the thing that makes the difference for us," he said. He continued, "We take the science very seriously. We have a fiduciary responsibility to our growers to let them know we’ve done all of the vetting possible."
The co-op supports an initiative called "Value of the Seed" which New West Genetics leads and International Hemp is a part of. Value of the Seed is designed to bring certified hemp seeds with well-bred genetics to market that produce plants that contain THC amounts that consistently lie under the legal limit (less than 0.3 percent). The certified-seed producers would be able to demonstrate THC compliance so hemp growers wouldn't have to, thereby lifting the onerous testing burden and associated costs on growers to prove compliance of their crops shortly before harvest. "We think it's the right route to go, and we think it's the smart route to go," said Walters on the co-op's podcast in July 2022.
The co-op does not recommend any Chinese seeds right now, said Walters. "We aren't really sure about genetics that come from China," he said. "It's not a question of whether they will come up out of the ground and grow. … The [issue] is they aren't consistent and the last thing a group of farmers needs is more inconsistency." This means Chinese seeds unpredictably may yield plants with varying levels of THC, including amounts that exceed the federal government's legal threshold.
Foreign car manufacturers like BMW already are utilizing hemp in body panels in their automobiles. This illustration shows hemp fiber as a component of a door panel. Photo downloaded from iHemp Western Australia website
The Hemp "A-Ha" Moment
A trademark feature of a Walters interview on The Industrial Hemp Grower's Digest is when he asks guests—usually at the beginning of the discussion—when they experienced their "hemp 'a-ha' moment." This refers to the guests' potentially paradigm-shifting instant in time when they realized that hemp was so amazing as a plant and had so many intriguing potential applications that they absolutely wanted to be part of the hemp industry. Walters said his own hemp "a-ha" moment came in spring 2019 when a client of the financial services company he still operates asked him to pull together streams of funding to build a CBD extraction facility in Alabama. He began digging into the hemp industry.
"The more research I did, the more I realized this whole industry was in a 'wild, wild west' [stage], and my experience has been that sometimes when there is chaos, there is opportunity," he explained. He also noticed, "there's one group that's consistently getting screwed over … the farmer, the grower, the landowner.” While the Alabama project ultimately did not materialize, Walters began to mull why there was no hemp cooperative for growers, "I got to thinking this could really be a great opportunity," he said. After all, he felt he had the right skill set. The motivation for establishing the co-op took root in him.
“We think it would be important to partner with [land-grant institutions] because they’re very close to the growers and farmers.”
The Long Haul
Not long after the co-op's LLC stood up in fall 2019, the COVID lockdowns hit the United States, resulting in the co-op taking an extended hiatus in 2020. By the end of that year, it was active again and hosted its inaugural hemp growers conference in December 2020 in Vicksburg, Miss. Since then, the co-op’s management team has been running on all cylinders.
Indeed, Walters and his colleagues continue to spread the word on the co-op's value, attract additional growers, forge new partnerships, explore additional value-added projects, and cement the ones already in development. "We wish it was moving quicker, but we have to continually remind ourselves … that this is going to take time and we're in it for the long haul," he said.
Asked what he thought the co-op's biggest accomplishment has been to date, he responded: "I am most proud of the conversations we have with all three of the different types of grower groups. Each has understood that our model is unique, and is impactful, and can have value to them.
"This is not the model that is going to fit everybody by any stretch, but we have listened to what needs to be adjusted."
Author's Note: The lead image shows John Coleman (center wearing sunglasses and dark polo shirt), farm manager of Alcorn State University's extension/research farm in Mound Bayou, Miss., speaking to attendees of the National Hemp Growers Cooperative's hemp field day there on June 6, 2022. To Coleman's right is Rockell Woods of the National Center for Appropriate Technology. The co-op provided the photo.
