This is one for the books:
A company that sells hemp protein and oil that was grown in the United States from start to finish
Everyone is well-acquainted with some of the top brands of hemp in the United States. Examples are Navitas, Nutiva, and even Manitoba Harvest. But were you aware that the products of these companies originate in Canada?
There have been restrictions on the cultivation of hemp in the United States for more than 80 years, beginning with Prohibition, which was always controversial. The situation was altered in 2014 with the passing by several U.S. states of legislation that allowed farmers to plant and then cultivate hemp. Kentucky stands among those states that led this movement.
Since that time, hemp companies have sought to have the seeds they require sourced from within the United States, but transition has progressed slowly thanks to the supply that is constrained and regulations that are uncertain, having been imposed by federal agencies, like the Drug Enforcement Administration (DEA) and Food and Drug Administration (FDA).
Victory Hemp Foods, a startup located in Kentucky is, however, blazing a trail by creating hemp products like evergreen CBD capsules of entirely U.S. origin.
Chad Rosen, who hails from California, moved to Kentucky back in 2014 when the state enacted legislation that allowed hemp to be cultivated. His goal was to substantially reshape the domestic landscape of hemp.
Chad was asked to tell the story of Victory Hemp Foods (VHF). His response began that this startup aims to build a supply chain and market for hemp within the United States. This it does by bringing to market hemp oil (know what is the best time to take CBD oil ) and hemp protein grew entirely domestically. It’s a source of pride that they are grown and processed in Kentucky.
Chad remarked that the process has not been completed with Hemp Hearts — hemp nuts. These come from crops grown in Kentucky whose seeds have to come from Canada or Colorado because of a lack of the essential equipment that dehulls them.
All in all, Chad’s company wishes to bring value to the hemp industry by overseeing growth in the demand for hemp in food products. While it will always be just “another brand on store shelves”, VHF wants to introduce products “that incorporate hemp foods (oil, protein, hearts) as additives and ingredients”. They will help to “fortify the nutritional profile of everyday meals.”
Chad explained that VHF is going to treat hemp as an additive that increases the nutrition provided by foods. As an example, he gave the Kentucky Beef Sausage saturated with hemp that was created by a collaborative group in which VHF participated. Chad described this as “a good example of breaking barriers and finding markets for hemp.” Prior to this, the U.S. Department of Agriculture (USDA) disapproved of the use of hemp as an ingredient of meat products.
Assisted by farmers, the Kentucky Cattlemen’s Association that represents them, and the office of Congressman Thomas Massie, it was possible to “run this issue up the flagpole in DC”, whereupon the USDA changed its position and authorized the use of hemp in meat products. And so was a precedent set for the whole hemp food industry. Some nonmeat-related value-added products remain at late stages of development. Chad believes these will be “a fresh take on some classics.”
VHF’s progress in Kentucky has been nothing short of remarkable. When invited to give more detail about devising a supply chain for hemp that was purely domestic, Chad clarified that there was more to it than merely sticking viable seed into the earth and harvesting it comes to fall. VHF has had to connect existing infrastructure for the processing of hemp stalks from locally grown crops to give farmers a number of revenue centers from a single plant. VHF has also developed equipment on a proprietary basis for the processing of hemp food in a manner that is efficient, effective, and, above all, safe.
Chad is proud of how VHF differs from other, larger hemp brands, like Navitas or Nutiva. Unlike VHF, these import every one of their products from Canada. Chad is of the opinion that Canada possesses good genetics, a great grain supply, and farmers and processors who are good at what they do. When it comes to hemp farming, he sees Canada as being ahead of the United States by two decades.
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Where Canada could improve, according to Chad, is by not focusing completely on the production of hemp seed. Attempts have long been made to develop related industries that use hemp fully, including its fiber and hurd, the coarser parts of hemp. These have, however, not experienced much success. They have been a shadow of what Europe and China have accomplished with hemp fiber, hurd, and cannabidiol (CBD, the second most common ingredient of cannabis, which is very healthful but not psychoactive). Chad sees this as the biggest opportunity, where success will come from “applying that good ole American ingenuity”.
Innovation will accelerate and lead to a variety of solutions.
Chad holds that if there are 25,000 different ways hemp can be used, he could probably come up with an equal number of reasons for his passion for it. He believes the rhetoric about what could be done with the plant, be it as construction materials, food, graphene, paper, or textiles. It could even transform the United States from an economy based on fossil fuels to one based on agriculture. This would be an economy that doesn’t depend on synthetic chemicals for production. This is not only possible but scalable. Chad sees many people in the industry laboring in different areas, and some will inevitably meet success. He is excited to play a part in this, to the point of sometimes even finding it distracting.
Chad moved from California to Kentucky to form VHF because it’s an agricultural state blessed with good farmers, soil, sun, and water. With these and the fact that political leaders have given strong support, Kentucky seemed like the best place to start a hemp business. When one begins to analyze the motivation of Kentuckian legislators to change laws so that growing hemp would be permitted, one has to remember the economic exodus that ensued when the amount of tobacco that was demanded began to decline. Tobacco was a high-margin crop well-suited to the hills and hollers so common in Kentucky, but people stopped buying it. Hemp can take its place, offering, as it does, a selection of avenues to garner revenue from one plant. It fits well with Kentucky’s agricultural system. Because of all this,
Chad can again imagine no better place for Victory Hemp Foods to operate.
Since Kentucky made hemp legal in 2014, Chad has witnessed considerably less talk and a great deal more work. It has been necessary for farmers, processors, and marketers to collaborate. Hemp requires certain inputs, weeds are sometimes a major obstacle that must be overcome, yields aren’t always what was expected, and nobody is getting rich quick. The people who continue to be involved have learned much, and the learning curve has been the most expensive.
While Chad can’t be certain that Kentucky will forever be at the forefront with hemp, he believes many “good folks” from there will develop an industry spread across the whole country. Already, most processors are diversifying and establishing projects with farmers found in other states: not just adjacent ones, like North Carolina, Tennessee, Virginia, and West Virginia, but even some as far afield as Minnesota, Texas, and Vermont.
Chad thinks this is because, with hemp, the market desires that things be local. It’s consumers who are behind the desire for hemp to be locally sourced. People who eat hemp foods like CBD gum balls, wear hemp clothing or use CBD prefer that the hemp comes from their own communities. Meanwhile, it’s companies that shift from centralized purchasing or processing to production that’s more distributed that Chad envisions as meeting more success in the future.
To Chad, for U.S.-grown hemp seed brands to catch up with Canada will be a challenge. Efficiency and volume grant established brands buying power that gives them financial resources and momentum that make it hard to compete directly with them. They have economies of scale that mean it’s easy for them to have large margins while still beating local brands on price. This just happens to be the economic reality, which leaves newcomers disadvantaged. While it’s possible to complain about free trade, this is the free trade that means strawberries are available in September, and farmers can export corn and soy.
So Chad judges that there’s a need to become creative and not compete with Canada over just the price of hemp seeds. He thinks hemp food companies should go online to concentrate on making the market expand. Hemp should replace unsustainable fish oil or meat protein products by making innovative products that entice new customers into making a purchase. This will allow everybody to go further, faster.
Chad sees little difference in the quality of Canadian and U.S. hemp seed. Increasing domestic supply will, however, have a phenomenal impact on rural communities in the United States. He has concluded that food manufacturers must always give preference to domestic suppliers. They can also assist in the creation of a culture that encourages customers to seek products made locally. The example he gives is that of Whole Foods, the leading retailer of natural foods that has, he claims, accomplished something fantastic by collaborating with domestic farmers.
Chad is sure that consumers increasingly desire products that are locally grown. This will support local farmers. So using hemp seeds grown in the United States will lavish more money upon rural communities, going some way to lessening the difference in wealth between them and urban areas.
Now, Chad laments that the greatest challenge facing his industry is that it’s undercapitalized. Those who invest in hemp, with the exception of CBD, usually see no payback for between five and seven years. A vast amount can change over such a long period of time.
Traditional angel investors are put off by the acronyms found on the Facebook pages of players in the hemp industry: DEA, DOJ, FDA, and USDA. They see a window that can be walked through for now, but more and more wonder how long it will stay open. Many newly minted investors have done very well with marijuana, hemp’s crazy sibling, but such investments generally have payback periods that are much briefer and margins that are enormous. Marijuana investments are so liquid that investors are freer to enter and exit the market.
Chad mentions this because when hemp producers seek funding, they’re often referred to those who have invested in marijuana. While both businesses center on cannabis, the payback period for getting a plant to compete with soy protein when it comes to food processing or glass fiber insulation is completely different to that of a plant that makes you high. Existing markets are entrenched and competitive, and a massive investment of capital and patience is required to achieve efficiency. He wishes to see the people who claim to be “impact investors” take a step forward and become involved. He considers the industry to require a bridge.
Chad opines that hemp occupies a very niche demographic. If the market is to grow, hemp businesses have to attract ordinary consumers. This can be achieved by making branding not so much about hemp but more about solutions. Hemp seeds, for example, have to be marketed not as purely being wonderful hemp but for the nutrition they offer. The benefits of hemp as protein, seeds, or even shirts have to be expounded. Less attention can then be given to the fact that the products happen to be hemp.
Chad’s long-term objective with Victory Hemp Foods is to offer small farmers incentives that cause them to cultivate a crop that could generate income by using different parts of one plant. Hemp can provide fibers and CBD, and farmers should be informed that there are different techniques that can create a number of sources of revenue from this one crop.
Chad believes the United States is the world’s strongest economy because it’s flexible. Proof of this, he asserts, is Joel Salatin and Polyfarm, the company he created. Having diverse income is the best defense against the price volatility that often afflicts farmers. Just like there’s pressure on athletes to take performance-enhancing drugs in order to compete, farmers can be shunned if they don’t use chemicals that increase their yields and make them compete better. Being less dependent on a single source of income, i.e., one part of one crop, is the best thing, economically, for a farmer to do.
Per Chad, brands are now more than just a name and a logo: “A brand is really what it does, what it is achieving.” Value has to be added to the agricultural space by offering farmers a market for a crop that will lessen volatility and enable farmers who are younger to establish a viable livelihood. If farmers are rewarded for being good stewards of the environment “[W]e’re headed in the right direction.”
Readers can support Chad and the farmers of Kentucky by purchasing Kentucky Proud hemp products and then making their feelings known. We have:
- Hemp protein
- Hemp seed oil
- Hemp seeds (Hemp Hearts)
We’ll be excited at CBD Oil Adviser if you give them a shot today! We can’t wait to hear what customers have to say about these home-grown hemp seeds! Chad, we salute you. Keep up the great work.