The Marijuana Venture Interview

Longtime hemp advocate and entrepreneur talks about the future of the industry and the nagging problems that continue to hamper businesses

The hemp industry continues to move full speed ahead, despite pending regulations from the U.S. Food and Drug Administration and the U.S. Department of Agriculture. Nowhere was the hype more evident than the NoCo Hemp Expo in March, which drew more than 10,000 attendees and solidified itself as the world’s largest hemp-centric trade event.

“Obviously we were in the right place when the wave started to happen in 2013/2014,” says Morris Beegle, the co-founder and president of We Are For Better Alternatives (WAFBA), the parent company of NoCo.

In addition to producing hemp events, WAFBA also owns Tree Free Hemp, a paper company, and Silver Mountain Hemp Guitars, which manufactures hemp-based guitars, ukuleles and guitar cases, combining Beegle’s passions for hemp and music.

With the federal government expected to unveil proposed regulations for the hemp and CBD industries in August, Beegle spoke with Marijuana Venture about all things hemp and the future of the fast-growing industry.

 

Marijuana Venture: How do you see the next steps in CBD regulations playing out after the initial framework is proposed in August?

 

Morris Beegle: It’s still going to take the FDA another 12 to 24 months to really figure out how to get a hold of the CBD side of things. I don’t see anything dramatic coming from the FDA in August, but there will be opinions put out in the next few months, so people will start figuring out their products and their pricing.

In the end, the products that go on the shelves in (non-cannabis) stores probably aren’t going to have any THC in them, and that will put some players out of the market.

It’s exciting to be a part of this as it’s evolving. It’s something that’s never been done before. It’s the real beginning of regulation for cannabis.

 

MV: Do you think the legalization of hemp factors into the possibility of legalizing marijuana at the federal level?

 

MB: Politically, there are definitely Republicans who are pro-hemp but want to keep marijuana illegal. They don’t want to confuse the two. You’ve got Senator Mitch McConnell, who’s been a hemp champion, but is definitely not a champion of marijuana. McConnell is the most powerful person in the Senate today, but that could certainly flip in 2020, and hopefully it will.

It’ll be interesting to see how it all plays out, but there are definitely sides of the marijuana industry that don’t want to see all this hemp-derived CBD because they see it cutting into their dispensary model and their brands.

That’s where the cannabis industry itself is also fragmented. There are the hempsters who want a clear line between hemp, medical/recreational and pharmaceutical. But then there are a bunch of us in the middle that say it’s all the same plant. In the end, I’d love to see it be all about the end use. The stalks and the waste material from cannabis with THC should still be able to be used on the industrial side for building materials and bioplastics. Who cares what the THC content is if it’s going into industrial products, plastics, paper or building materials? Those are non-consumable.

 

MV: What would you like to see when the government presents its proposed regulations?

 

MB: The FDA has hinted that there will be a path for hemp-derived CBD products. It would be good just to hear the FDA reinforce that.

What we always hear is that the government doesn’t work that fast — and they don’t. The natural products industry went through the same thing when they tried to regulate dietary supplements over the last 25 years. We’re imagining it’s going to be a very similar path.

The USDA is also laying out its framework, which will hopefully open up access to banking, insurance and some of the government programs that farmers of traditional crops have access to. And that will open access to financial markets and investments from institutional investors. I think the information that’s going to come out in August and onward is going to provide assurance to a lot of people who have yet to enter the market.

 

MV: With the explosion of the hemp industry, do you see a negative component where people are getting gold rush fever and jumping into business without enough preparation or knowledge?

 

MB: Absolutely. CBD is everywhere right now, so there’s this gold rush mentality and people have dollar signs in their eyes. Some people are totally unprepared to be in the industry.

There are a lot of people who are banking the farm on this, and a lot of people are going to lose their asses. A lot of people who are jumping in don’t know much about the genetics, they don’t know how to plant hemp, they don’t know how to harvest it. We’re going to have 150,000 to 200,000 acres this year in the United States and my guess is that half of it won’t be able to go to market, and some people will lose a lot of money because they just don’t know what they’re doing.

But a lot of people will make money, because they’ve been doing it for the last few years or they’ve brought in the right type of people. Farmers are really smart when it comes to making stuff work with the soil and the land and the environment.

Looking ahead, I see a lot of great stuff coming into place, but I also see a s—storm that’s going to eliminate a lot of people from the industry.

 

MV: Aside from the FDA-related issues, what are some of the big hurdles preventing the industry from growing faster?

 

MB: One thing is getting the right genetics for the right locale or latitude. Stuff that does well in Colorado might not do well in Kentucky.

Processing is another big thing. We’re growing all this material, but how is it all going to get processed? There’s a quite a bit of extraction processing out there, but not enough to handle the volume of acreage that’s going to be grown. There’s hardly any fiber processing and not much processing for the grain side, for deshelling the hemp seed and making protein powder and hemp seed oil.

Right now, everybody thinks they’re going to make all this money from CBD. In the short term, they can make a lot of money. The long play is the fiber side, and that’s a different type of investor who’s looking 10 or 20 years out to build a facility and get into the building, bioplastics or paper industries or servicing auto manufacturing to produce car panels like they’re doing in Europe.

We need smart people to help develop this technology and maximize the benefits of this crop.

 

MV: It seems like this gold rush mindset has everybody thinking about CBD, while the industrial uses of hemp have been overlooked.

 

MB: That’s absolutely true. But there’s a group of us, myself included, who are dedicating more time and energy into the overall impact of hemp and the fiber side of the business. I got into this industry because of the fiber side, the T-shirts, the building materials and the food products.

CBD is opening the door and mainstreaming things, so now people can find all these other great uses for hemp. The environmental and industrial benefits of the plant are, in the long term, going to be the big play.

 

MV: Tell us more about your hemp paper company.

 

MB: We started doing the paper side of things in 2013. We’re printing a lot of business cards, posters, brochures, program guides. Typical, easy-to-print stuff. The paper at this point is quite a bit more expensive. If you’re printing 500 business cards, they cost $75 to $90, whereas if you get them from Vistaprint or wherever, they might be $30.

A lot of people, when it comes to a price point that is reasonable, will spend $100 instead of $50 because it’s eco-friendly. Will they spend $25,000 rather than $10,000 for the same thing? That can be challenging.

For the hemp paper industry to compete for commercial printing, we need a lot of acreage, we need a lot of processing and we need a lot of material to put into that system that can be cost competitive. If I can get wood pulp for $800 a ton and hemp pulp for $2,400 a ton, it doesn’t make any sense. I think we can get cost competitive if we’ve got a legal crop and we’ve got some subsidies and some money for R&D. Then we’ll be able to drive the price down, but it will take a while to get there.

 

MV: Do you think the general public is still unaware of some of the challenges faced by the hemp industry, now that the crop has been legalized at the federal level?

 

MB: I don’t think the general public is very aware of some of the restrictions on the hemp industry.

I’ve been banned from advertising on Facebook since 2015. We created this novelty poster of the Declaration of Independence on hemp paper; I posted it on Facebook and boosted it, and I got flagged for it. We went back and forth, but they’re still blocking my company. Facebook released a statement that they would allow CBD companies to advertise, but as far as I know, they’re still blocking hemp companies. I can’t do anything.

About a month ago, I started getting notices from the news wire company I was working with that my press releases couldn’t go out. Their credit card company basically told them they couldn’t release any content that mentions marijuana, cannabis, hemp, CBD or related products.

It’s ridiculous that a credit card company says you can’t put out this content about something that is completely legal. It pisses me off.

There’s this feeling that cannabis has always had problems with social media and being blocked from advertising. But now hemp is legal. We passed the Farm Bill. The president signed it.

I just think we have to keep talking about it and making it known until it gets resolved. We’ve got to make the banks sick of hearing about it all the time.

 

This interview has been edited for length and clarity.

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