Tough sledding in the hemp-CBD market in the wake of the 2019 harvest has resulted in many looking to pivot to new opportunities. While some are remaining in the cannabinoid hemp space by focusing on smokable flower or delta-8 THC, market participants and state officials from across the country have reported increased interest in fiber hemp from farmers this year. Hemp Benchmarks recently spoke with several operators in the domestic hemp fiber industry for an update on where the sector stands.
Some businesses have focused on fiber from the start of hemp’s reintroduction into American agriculture via the 2014 Farm Bill, which authorized research pilot programs to study the crop. Hemp Benchmarks spoke to Austin Bryant, Managing Director of Corporate Development and Partnerships, and Coleman Beale, founder and CEO, of BastCore, a hemp fiber processor located in Montgomery, Alabama. Using proprietary, patent-pending technology and methods developed in-house, BastCore produces textile grade and composite fibers from the bast fibers on the outer portion of hemp stalks, as well as chipped core wood and micronized wood from the hurd, or inner core of the stalk.
Bryant and Beale see major opportunities for a domestic hemp fiber industry in the U.S. and have been working to make that a reality since 2014, when BastCore was founded. Despite being one of the longest-standing hemp businesses in the country, Bryant described the company as “still young in terms of capacity and output,” a situation that BastCore intends to change with the help of a recently-completed Series A investment round that will be used to expand the firm. While specific figures on current processing capacity and output were not provided, the company plans to double in size each year for the next five years, according to Beale.
Mike Lewis is the Sustainable Agriculture Specialist at the National Center for Appropriate Technology in Kentucky, where he works to educate farmers on sustainable production systems, risk management, and other best practices. He is also a long-time farmer and Board President for the Hemp Industries Association (HIA). Lewis noted the organization recently launched its Hemp Fiber Council. “There’s tons of research coming into fiber and we are starting to see practical applications for the plant,” he said, “things that we can attain tomorrow.”
There are significant hurdles to clear if the U.S. hemp fiber industry is to truly take off. Andrew Follett, a Pennsylvania-based cultivator and retailer who advises hemp companies on supply chain issues, said he already has functional equipment in place and is just waiting for the industry to catch up. “I have four decorticators and can run 30 tons [of industrial hemp] every two hours,” he said. “I’m only running one of them a couple of hours a day, once a month.” The issue, he said, is linking together the pieces of the domestic supply chain. “You ever build Lincoln Logs when you were a kid?” he asked. “It’s kind of like that. All the pieces are there now, in the U.S., but [we] just haven’t been able to put them together, haven’t been able to connect the dots for a steady supply chain for the industrial [sector].”
In North Carolina, Ryan Patterson is a fourth-generation farmer who is the owner and operator of Ryes Greenhouses; he was also one of the first hemp growing licensees in the state. Patterson said there is still a lack of infrastructure in place in many southeastern states for processing hemp fiber, although that appears to be changing. There are reports, he said, of some old, unused factories in the region being retooled for hemp. “Textile has always been big here in North Carolina,” he said, “and I think there are some of those textile industries that have gone out of business, that people are trying to modify equipment to utilize it for hemp.”
At the farming level, Bryant of BastCore detailed several fronts where work needs to be done “to put farmers in a better position to be successful.” He identified genetics as an area with a “tremendous amount of opportunity” for innovation. Bryant noted that cultivars better suited to the various growing regions in the U.S. are needed to produce higher yields, which translates into more revenue for farmers. He pointed out that “you want to get to four to five tons [per acre]; for farmers that’s where the economics make sense.”
Bryant also said that more regulatory uniformity between states, as well as coordinated efforts between states and the federal government, are required to foster a thriving market. For example, he noted that in Kentucky BastCore purchases seed for farmers, but Alabama’s rules require farmers to purchase seed themselves. These discrepancies are in addition to making sure that all parties involved, from the seed dealers to the farmers, have the proper licenses in order for the states in which they are operating.
Additionally, Bryant emphasized that more education on how to process hemp in order to produce high quality, clean, consistent products is needed. He noted that the offshoring of the U.S. textile industry in previous decades has resulted in a knowledge and skills gap in this country, making “re-shoring” easier said than done. Beale, BastCore’s CEO, noted that, with the company’s ambitious expansion plans, they are looking to hire quality employees, but that in itself can be a challenge given that few Americans have deep experience in the textile, fiber, or hemp industries.
Fiber processing equipment is another example of the knowledge gap, according to Bryant. “There’s more to [fiber] processing than decortication,” he stated. Bryant said that many other fiber processing companies are combining decortication and other equipment from Europe and other parts of the world in building their facilities. On the other hand, BastCore has developed proprietary processes and technology to meet the specifications of customers, such as apparel brands and the textile mills and weavers that those brands work with. Bryant emphasized that fibers for woven and non-woven textiles must be clean and free of any hurd, and vice-versa.
While BastCore has spent several years developing proprietary technology to process hemp for various fiber products, other approaches are also being taken. Alongside reports of more investment in new facilities are accounts of entrepreneurs adapting existing equipment and infrastructure to be used for hemp processing.
Lewis at the National Center for Appropriate Technology and HIA observed that there has been an increase in hemp-focused technologies, as well as more traditional facilities being retooled for hemp use. “You’re seeing a lot more efficiencies come into the production,” he said. “New equipment is being designed to streamline harvesting. We’re seeing modified tobacco equipment in Kentucky, conveyor dryers, things that are changing it, so that it’s easier to produce.”
That trend has also manifested in North Carolina, where he said some cotton gins are being modified for hemp textile manufacturing. “We’re seeing it with industrial-sized carding machines,” Lewis added, “being used to card the hemp for linen fibers. We’re seeing a lot of modification. I mean, most of the scale that I operate on requires us to modify things from existing equipment.” Retooling that equipment, however, is not always a simple process and often depends on what is at hand.
One realm where Beale and Bryant of BastCore do not see any difficulties is in ginning up demand for their products. “Demand is there” and the pipeline of potential customers is robust, Bryant said, while noting that their firm has fielded inquiries from around the world.
For U.S. companies in particular, Bryant pointed out that incorporating hemp into their products allows them to emphasize a domestic supply chain and the plant’s environmental benefits. They noted that some garments made using fibers produced by BastCore should be coming to market by the end of this year. For the industry as a whole to grow, though, major brands need higher capacity processors who can deliver quality products to their specifications consistently.
Similarly Andy Follett in Pennsylvania believes that hemp’s place in the national market is assured by consumer demand. He acknowledges it is still “falling a little short” on the farming, processing, and shipping sides of the equation. Follett also believes that equation will change by next year, as the fiber and grain sides of the U.S. hemp industry come into their own.
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