Business & Economy

After hemp hype, fewer growers and more long-term planning

Dan Querrey of VT Terps sifts through a container of dried hemp at the CBD company’s processing facility in Florence on Wednesday. Photo by Glenn Russell/VTDigger

Chelsea Bevis had the land, the barn and the ambition to join Vermont’s much-hyped hemp industry in 2019. She and her husband started slow, planting just 1 acre and harvesting it themselves with their two teenage sons.

This year, the family’s small hemp operation, Hood Mountain Hemp in Windsor, is one survivor in a much-reduced lineup of Vermont hemp growers. The number of acres registered with the state for hemp cultivation shrank from 9,000 last year to 1,600 this year.

Meanwhile, while there are still Vermont hemp growers looking for buyers, the pool of processors has grown significantly from the fall of 2019.

“Every year, it seems like the pendulum is swinging,” said Dan Querrey, one of six partners in Vermont Terps, a company that grew 93 acres of hemp in northern Rutland County in 2019 and this year. “But it appears to be taking smaller swings.”

It became clear in the fall of 2019 that Vermont’s overheated hemp industry would likely experience a correction. 

After the federal government redefined hemp as a regular agricultural commodity in 2018, new growers surged into the market, eager to cash in on the interest in CBD, one of the many compounds in the hemp plant thought to have health-giving properties. 

But in the fall of 2019, many acres of hemp ended up freezing in the fields because growers couldn’t find the labor to pick the plants or the processors to buy them.

A careful approach

Bevis said she and her husband spent hours researching the nascent industry in 2018 before settling on a plan to seed 1 acre. They contracted with Northeast Processing in Brattleboro to buy their 500 pounds of biomass in 2019, and again this year. While they haven’t made money yet, she said they haven’t lost money, either.

Dan Querrey of VT Terps explains how a custom-built dryer can dessicate harvested hemp in a matter of hours while capturing and preserving the plants’ terpenes at the CBD company’s processing facility in Florence. Photo by Glenn Russell/VTDigger

“We went to the hemp conference last year and we were extremely surprised at how many people invested so much money” without a long-term plan, said Bevis, who works full-time as a real estate agent. Her husband is an equipment mechanic. “We decided we’d only put in what we could afford to lose, and in the meantime find out who has the best information and work with them.”

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This month, they’re carefully weighing their options for purchasing seed as they prepare for the coming growing season.

That’s the approach that Vermont Terps is using, on a larger scale. The Florence-based company, which grows, dries and processes its own plant material, has now extracted the oil from 20,000 pounds of biomass, Querrey said. 

He said the Vermont companies that managed to plant another year are the ones that had a long-term plan.

“We are all business owners who own other businesses along with agricultural businesses,” he said of his five partners. Querrey owns an apple orchard and an industrial contracting company.

“A lot of farmers understand how to grow their crops, how to manage their cash flow, but most Vermont farmers are members of co-ops or the dairy co-ops … and all of a sudden everybody in this industry was now fending for themselves,” he said. “There was nobody there for everybody to turn to to ship their product.”

Grower fees increase

The hemp growing craze appears to be a casualty of regulatory change. 

Until 2020, it cost just $25 to file with the state Agency of Agriculture’s hemp registry, an inducement that many out-of-state growers mentioned in 2019 as they planted hemp on farmland they’d leased in Vermont. 

But the price shot up last summer to $100 for a half-acre or more and $100 for commercial cultivation on any size plot. From a half-acre to 9.9 acres, the cost is $500, and for anything over 50 acres, it’s $3,000.

Dessicated hemp is ready for further processing to extract CBD at a VT Terps facility in Florence. Photo by Glenn Russell/VTDigger

In 2019, the Agency of Agriculture collected $33,895 in registration fees to pay for its three-person hemp program. This year, it collected $194,460, said Stephanie Smith, cannabis quality control and policy administrator for the Agency of Agriculture.

Registration for next year’s growing season opened Dec. 1. Smith said she hopes 600 growers will register this year. 

“I hope some of our personal growers maybe step up and become commercial growers this year,” she said. 

Smith said she’s noticed more processors registering with the state, and more companies that are both growing and processing the plant material. Vermont Terps has started making its own CBD products and recently opened a store on Route 7 in Pittsford.

“In business in Vermont, it seems like everybody does more than just one thing,” Querrey said. “That’s what Vermont Terps needs to be: Not just a grower, not just a processor, not just a retailer. You have to do it all if you’re going to survive.”

Dan Querrey of VT Terps explains the extraction process at the CBD company’s processing plant Florence. Photo by Glenn Russell/VTDigger

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Anne Wallace Allen

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