Before Geoff Whaling was the chairman of the National Hemp Association, he had his hands in numerous other ventures related to hemp, cannabis and, before that, sports car racing.
It was in those days out on the race track where Whaling met and partnered with famed actor and philanthropist Paul Newman, who years ago gave Whaling a resounding piece of advice: “Dreams never die, just the dreamer” (perhaps quoting a song by Canadian band The Coopers Brothers).
To this day, Whaling credits Newman for inspiring his dream of bolstering the industrial hemp supply chain in the U.S.
It’s a dream that may soon be realized by Collective Growth Corp., a company Whaling recently formed with two cannabis industry veterans he worked with in his time at Canopy Growth.
Collective Growth Corp. is a special purpose acquisition company (SPAC), meaning it was formed to raise funds through an initial public offering (IPO) to invest into other companies, whether through acquisitions or other partnerships. The Austin, Texas-based company recently filed with the U.S. Securities and Exchange Commission (SEC) to raise up to $150 million in its IPO.
Whaling tells Hemp Grower the idea behind Collective Growth Corp. is to build out the U.S. industrial supply chain for a means to use the entire hemp plant to its full potential.
Collective Growth Corp. will be investing into “the most essential components to rekindle this industry,” Whaling says: bringing specialized harvesting equipment to farmers and building out decortication and processing facilities across the country.
“Somebody has to step up to the plate and bring all the pieces of the puzzle together to complete the picture,” Whaling says. “Because I’ve been able to travel the world, because I see what’s out there and I know what the challenges are, I think that we have the absolute best shot of bringing this commodity crop to the fields of America.”
An Experienced Team
Collective Growth Corp. was formed by Whaling, Bruce Linton and Tim Saunders, all of whom met during their time working at Ontario-based Canopy Growth, the first marijuana company to be listed on the New York Stock Exchange.
Whaling served as a strategic advisor for the company and also co-founded Hemp Developments LLC, which became a division of Canopy Growth. Linton was CEO of Canopy Growth, while Saunders was executive vice president and chief financial officer. (Linton is now the executive chairman of Vireo Health International Inc.)
All three left the company for various reasons in 2019, but it hasn’t taken them long to hop aboard new executive roles.
In his new role with Collective Growth Corp., Linton will serve as the chairman and CEO. ”He obviously has incredible skills in not only bringing businesses together, but also raising funds,” Whaling says about Linton.
Saunders, who was responsible for Canopy Growth’s listing on the New York Stock Exchange, will serve as Collective Growth Corp.’s chief financial officer. “It is without question that Tim is going to be fantastic in helping us build the company as a NASDAQ-listed group,” Whaling says.
Whaling’s title with the company is co-founder. On top of his positions with the National Hemp Association and Collective Growth Corp., Whaling is also currently the president of the Pennsylvania Industrial Hemp Council and is credited with building out the first hemp industrial park in the southern part of New York.
Together, Whaling says the three decided to pursue a SPAC so they could utilize their collective experience and skills to scale up the U.S. hemp industry’s infrastructure as quickly as possible.
“The SPAC provided a unique financial instrument that would allow us, as a management team with credibility, knowledge and a proven track record, to raise money,” Whaling says.
While hemp cultivation only became fully legal in the U.S. when the Agricultural Improvement Act of 2018 (the 2018 Farm Bill) passed, it has been legal in other countries for centuries.
Whaling says he’s been eyeing “regional success stories” in areas like Holland, Belgium, Romania and France for a model to bring to the U.S.
Hemp harvesting and processing equipment has been developed in those areas, but for much smaller operations than would currently be applicable to the thousands of acres being cultivated in the U.S.
Many of those regions are also only specializing in using one part of the plant, Whaling says. He hopes to compile lessons from and equipment used in those regions to create an overarching solution for the U.S. supply chain to use the entire hemp plant, from its leaves and seeds to its cannabinoid content and fiber from its stalks.
“Our ultimate goal is to look at who is doing this, who has perfected this, maybe make some acquisitions in those areas and then bring that technology to America,” Whaling says.
Whaling has already taken the first step in his internationally oriented solutions approach to building out the domestic hemp supply chain. He recently facilitated a partnership between the National Hemp Association and New Holland Agriculture, a global agricultural machinery manufacturer based in Pennsylvania, as a way to reach farmers around the country to gauge their needs and educate them about cultivation solutions. Whaling says he also formed the partnerships with the hopes that New Holland can begin manufacturing equipment useful for hemp farmers in the U.S.
“We hope with our work with New Holland, they can engineer something that would be appropriate for Midwest farmers,” Whaling says.
Raising the Funds
Because of SPAC regulations determined by the SEC, Whaling says he can’t discuss the companies he’s interested in acquiring or even indicate that he has targets in mind.
But he says he knows “all the players” along the hemp supply chain around the world—and they’ve expressed a fierce interest in breaking into the U.S. market. “I think I’ve had every one of those companies come to me within 48 hours of the news breaking [about Collective Growth Corp.]” with an interest in doing business, Whaling says.
The major interest is a big advantage for Collective Growth Corp., which will know by the end of March whether its fundraising was successful.
“I think if anything, once we close on our raise, we’ll be able to act pretty quickly,” Whaling says.
A fast approach is important to SPACs. The SEC requires SPACs to use 80 percent of their money raised within 24 months, or else the money has to be returned to investors.
Whaling says that’s part of the reason Collective Growth Corp. didn’t pursue a target of more than $150 million. With hemp being either a new or a niche industry in most parts of the globe, many companies in the industry aren’t highly valued, and Collective Growth Corp. would be hard-pressed to invest all the funds in such a tight turnaround.
But moving fast is also important to Whaling because it’s important to the industry. Farmers are excited about hemp but also craving clarity on all aspects of the industry: regulations, logistics, profit potential.
Whaling fears that if they don’t receive certainty soon, they’ll be forced to move on. “A lot of people have been burned in the CBD space,” Whaling says. “They’re saying, ‘Unless we know there’s going to be equipment out there for us to harvest this and we have a place to sell to, there is no interest.’”
The U.S. Department of Agriculture (USDA) recently released a report predicting that hemp will never become more than a specialty crop in the U.S.
But Whaling dreams of making it a commodity. With Collective Growth Corp., Whaling’s goal is to build out infrastructure that would allow converting 15 percent of all crops to hemp in the U.S. over the next 10 years.
“It’s a challenge, and I have this vision. It’s all possible,” Whaling says. “I see this as a kind of New Age revolution—an industrial revolution and, in our case, an industrial hemp revolution.”