Hemp growers have filed a class action-lawsuit against a Kentucky-based hemp company after the company allegedly breached hundreds of thousands of dollars worth of contracts with the farmers.
The lawsuit, which was filed earlier this month in the U.S. District Court of Western Kentucky Owensboro Division, says Bluegrass Bioextracts contracted with hundreds of growers for their hemp to process into cannabidiol (CBD) oil. But some didn’t receive their promised payments.
Farmers are now suing the company for breach of contract, fraud, racketeering and other claims.
The suit’s plaintiffs say the many of the company’s contracts were for $4 per percent of CBD per pound of hemp. According to the lawsuit, the Bluegrass Bioextracts and its parent company, DTEC Ventures, told hemp farmers they would honor negotiated contracts “regardless of what was occurring in the market...to develop long-term relationships and good will with growers.”
The lawsuit also alleges that the company rejected hemp due to its contaminant levels even though farmers’ independent testing showed levels were acceptable.
“These deceptive acts were taken with the express intention of getting growers to change their contracts for the defendants’ benefit and otherwise increasing the defendants’ profitability and revenue, thereby causing financial gain to each of the enterprise’s constituents,” the suit says.
This lawsuit is the latest in the Bluegrass Bioextracts saga.
In November 2019, DTEC Ventures bought out Bluegrass Bioextracts, reports Ohio Valley Resource. But when DTEC began rejecting farmers’ hemp, Gerald Edds and other former owners of Bluegrass Bioextracts sued the company for $69 million over control of the company.
That was resolved in a settlement in February. WKMS reports the settlement allows the former owners to receive hemp-processing equipment from Bluegrass Bioextracts with the intent to start a seperate hemp processing company, Precision Biotech LLC.
Charlotte’s Web Donating $1M in Products to Honor Namesake Charlotte Figi
The company is giving away its CBD products to families who are in need as COVID-19 continues to spread across the country.
When 13-year-old Charlotte Figi passed away in early April, cannabidiol (CBD) company Charlotte’s Web says it lost its “northern star.” The young girl had found relief for her seizures through the Stanley Brothers’ low-tetrahydrocannabinol (THC) strain of cannabis, inspiring them to name the strain after her and, eventually, their company, now called Charlotte’s Web.
“We had to say goodbye to our sweet little Charlotte, who we really consider to be our original founder and the founder of this industry,” said Charlotte’s Web Co-Founder and Chair Joel Stanley.
Around the same time of Charlotte’s passing, people had begun reaching out to Charlotte’s Web in need. The spread of COVID-19 was preventing some from buying the CBD they had come to rely on.
After some thought, company executives have devised a solution to both honor Charlotte and help others like her by giving away Charlotte’s Web products to people who need it.
“We know some people are struggling, and we got our heads together, and I’m very thankful to be able to announce that we are able to donate a million dollars’ worth of products to these struggling families,” Joel Stanley said in a video announcing the donation.
The company has teamed up with its charitable partners at the Realm of Caring, Adaptive Training Foundation and High Fives Foundationfor the sizable donation.
To receive a free product, people can visit www.charlottesweb.com/2020-cwsupport to fill out a short survey. Once the survey is complete, people will receive a coupon code for either one bottle of the original formula CBD oil, extra strength CBD oil or extra strength powder capsules. The coupon code does not include the shipping cost of $8.99. Surveys are limited to one per applicant and are only available to those in the U.S.
The expanded CBD access made possible by the donation is a tribute to Charlotte and her family, who were early CBD activists after discovering Charlotte’s response to it.
Charlotte had Dravet Syndrome, a rare form of intractable epilepsy that caused her to suffer through up to 300 grand mal seizures each week.
She passed due to complications from an illness.
“The news of Charlotte’s passing has been devastating to our organization,” said CEO Deanie Elsner in the video. “We desperately want to do something to honor the legacy of what Charlotte and Paige Figi [Charlotte’s mother] have done to create access to CBD for all of us.”
Nate Burrows/Courtesy of Asheville Hemp Project
Asheville Hemp Project Is Sharpening Its Brand as Marketplace Continues to Expand
The company has debuted four new products this year, including pre-rolls and chewing gum.
Pre-rolls, lip balm, chewing gum and CBD tincture by Asheville Hemp Project.
Asheville Hemp Project is launching its four new products at an uneasy moment in the retail marketplace, but even now there are hopeful opportunities. The company, which debuted its pre-rolls, chewing gum, lip balm and full-spectrum CBD tincture earlier this month, is sending 50% of its sales to the North Carolina Restaurant Workers Relief Fund.
As with so many aspects of this company, the story never veers far from its North Carolina roots.
Leslie Hoffman ran a farm in Hawaii for years before buying her 23-acre farm outside Asheville in 2015. Replete with sheds and drying barns and a sturdy 1935 log cabin, the property offered her the space to continue practicing the sustainable agriculture that she’s made into her life’s work.
For the past 30 years, this particular property fed grazing cattle. “That turned out to be a total bonus because of course, it's had manure dropped all over it endlessly,” Hoffman says. “So, the soil quality was a pleasant surprise.”
Auspicious beginnings.
The “project” in Asheville Hemp Project comes out Hoffman’s partnership with scientist Scott Brinkley. The duo began working together in 2017, planning ahead for North Carolina’s newly geenlit hemp pilot program. They sold flower on the wholesale market and honed no-till, plastic-free cultivation practices on their experimental crop. By 2019, following the federal legalization of hemp, it became clear that the market was bound for rapid growth. “We realized there was an opportunity to build a brand and to start developing a variety of finished products,” Hoffman says.
Thus, Asheville Hemp Project was created to shepherd those products to an emergent retail consumer base.
The first move was to identify GMP-certified manufacturers that could help take the company’s crop and turn it into a variety of end uses. The wholesale market was one thing, but by this point consumers were beginning to reveal new demands as product innovation blossoms in the hemp space.
“If you really watch the pricing as more and more farmers come into the hemp world, it's a pretty tough go on a small scale if you do not differentiate yourself and create a unique story with unique products,” Hoffman says.
Nate Burrows/Courtesy of Asheville Hemp Project
HoffmanIn Asheville Hemp Project’s pre-rolls, for example, she says the company developed a “crutch” that would maintain structural integrity without compromising on the sort of filter that might accompany a tobacco product.
“[Pre-rolls are] the simplest, most direct way [to sell hemp] while being put into a packaged products,” she says. “It's consistent and uniform and can be delivered in an ongoing way and can be created en masse. It is the simplest, purest way to use hemp flower.” There’s another story there, too, something that harkens back to the North Carolina tobacco industry. Broadly speaking, the tobacco market has dwindled considerably in recent years, but the nod to heritage is another component to Asheville Hemp Project’s hemp-derived CBD products.
Scott Brinkley/Courtesy of Asheville Hemp Project
Hoffman in one of Asheville Hemp Project's drying barns.
The pre-rolls come in packs of 10, with 100 mg of CBD in each.
Elsewhere in the budding portfolio, Hoffman points to the brand’s chewing gum as a fresh take on casual, discreet CBD use.
“The gum is unique because it is so efficient and such a normalized process for people who need CBD or can benefit from CBD, but who really don't want to smoke and don't want to get their head up and put droppers of oil in under their tongue,” she says. “They just pop a piece of gum or two a day and get great benefit from it.”
The company’s hemp lip balm includes no cannabinoids, opening the product to retailers around the country.
Last year, Asheville Hemp Project grew cultivars like Cherry Mom, Lifter and Hawaii Haze. Over the winter, the company got into small-scale breeding on-site. Looking ahead to 2020, Hoffman and the team are considering more CBG-dominant hemp cultivars. She also mentions a tilt toward more food production on the Asheville land, a shot at greater diversity on the farm as the hemp project continues to develop.
“We work like we are a project,” she says. “So, we're developing new products. And this year, we're going to grow some new strains, and that'll help us innovate some of our products. And we'll keep evolving in that way.”
Soru Epotok/Adobe Stock
USDA Approves Florida Hemp Plan
Florida hemp farmers now turn toward the prospect of university partnerships and a year-round growing season.
The Florida Department of Agriculture & Consumer Services will begin accepting applications for hemp production April 27, thanks to the formal approval of the state’s regulatory plan by the U.S. Department of Agriculture (USDA). Several thousand farmers are expected to apply.
Jeff Greene, co-founder of the Florida Hemp Council, says that farmers in his state are looking forward to finding a space in this new market. CBD extraction continues to be a leading segment in the hemp industry, but he points to fiber and grain production, as well as minor cannabinoid development, to show the many opportunities for prospective farmers.
“The industry is trying to establish itself,” he says. “For the longest time, it was every man out for themselves, survival of the fittest. I’ve seen with the collaboration of the Florida Hemp Council board and members that the industry is starting to see itself as a real industry—not just a cutthroat, first-come, first-served. That’s what we’ve been pushing.”
USDA approval comes in time for many farmers to look ahead to the typical 2020 planting season. But there’s also the question of fingerprint testing and background checks, required for all applicants. Licensed hemp farmers may not have a felony drug conviction on their record from the past 10 years.
The good news is that the Florida climate will allow year-round hemp cultivation. Farmers won’t be shooting out of the gates on April 27; Green predicts it will be a slower, rolling start, but the climatic patterns in the state will be of great help in these first few years.
Even still, Greene says there are plenty of open questions joining the start of Florida’s hemp market.
Greene points to several interpretations of how the state is engaging the Association of Official Seed Certifying Agencies (AOSCA) as potential hurdles in the short term. AOSCA lists both “certified” and “approved” seeds, but Greene says the state may accept either. (The Florida statutory language mandates AOSCA-certified seeds.) The issue, he says, is that it’s not entirely clear what sort of guidance hemp farmers will have when sourcing seeds.
“Now, are we really finding out what grows in Florida or not?” Greene asks. “Really, what the state’s saying is, for commercial cultivation, we don’t want the farmers to have to take the risk. But the reality of it is AOSCA doesn’t mean it’s risk-free. An AOSCA-certified seed does not say it’s going to be below 0.3% [THC content]. It just says that the genealogy of the seed is certified.”
The Florida Hemp Council is working on getting a state university to consider some sort of communal research project that will let farmers (who are willing to take the risk) work with non-certified seeds in a non-commercial setting that will allow them to grow beyond the THC threshold. This will also let growers learn more about which varieties grow in Florida.
Further, ongoing university-level research will begin to shed light on the economics of this newly legal industry. The oversupply and subsequent price crash in late 2019 continues to linger in 2020. With the USDA ramping up formal approval of state plans (and some states choosing to operate under 2014 Farm Bill auspices), it’s expected that even more farmers will be growing hemp this year.
“The supply-side economics of 16 states now with USDA approvals means that we have a huge bump up in supply and, with shadowbanning and difficulty in export, a limitation in demand,” Greene says. “With COVID, even more limitation in demand.”
He points out that Florida has a strong manufacturing base already. And while the early hemp segment of that manufacturing base has been buying biomass from the open market—from Kentucky, from Colorado—Greene says that there’s a built-in demand ready to go in his state, once buyers have a chance to revisit contracts and once Florida farmers are up and running with their first harvests.
“After months of incorporating feedback from the public, growers, and industry stakeholders, we are thrilled that Florida’s hemp industry officially begins now,” Florida Agriculture Commissioner Nikki Fried said in a public statement. “I thank the USDA for their swift review and approval of our state hemp program. By working closely with our farmers, processors, retailers, and consumers, Florida’s state hemp program will become a model for the nation, will set a gold standard for this emerging industry, and will create billions in economic opportunity for Florida. As our economy deals with the impacts of COVID-19, this approval will give our agriculture industry a new alternative crop for many years to come.”
Canopy Growth Corp. took a big step back from several international operations last week, cutting ties with its assets in South Africa, Lesotho, Colombia and the U.S.
Among the company’s attempts to reduce its workforce and its cash-burn rate was the closure of Waterpoint Hemp Farm in Springfield, N.Y. more than 1,000 acres of former dairy farmland. Canopy bought the property in early 2019. “Canopy Growth purchased Waterpoint not just because it had the good land for hemp, but it also had the housing, electrical infrastructure, buildings, diesel tanks,” Branson Skinner, Canopy Growth’s farm manager for New York State, said at the time.
As of last week, however, Canopy had closed the farm and turned its attention elsewhere in the hemp market.
“We have made the difficult but necessary decision to close our Waterpoint Hemp Farm based in Springfield, New York,” according to a statement from the company. “Like many other growers in the state, Waterpoint Hemp Farm produced an abundance of hemp in 2019, which does not commensurate with current market demand or the regulatory delays surround hemp extracts.”
The surplus biomass will be used in Canopy’s CBD isolate products manufactured under the brand First & Free, which includes soft gels, tinctures and creams, a company spokesperson told Hemp Grower. Canopy continues to build out its hemp production facility on the site of a former vacuum cleaner production plant in Kirkwood, N.Y.
The company also works with contract farmers in the U.S. to produce hemp for extraction purposes.
“The industry overall overestimated the market demand. I think that is certainly what we’re trying to understand moving forward, as well as the regulations around this,” a Canopy spokesperson told Hemp Grower. “Once regulations get finalized, then we’ll be able to forecast market demand better.”