Gov. Ralph Northam signed a bill March 21, suddenly allowing the hemp industry to blossom in a state where it couldn’t before.
The green rush was on, and entrepreneurs across the state began jockeying for their place.
A rookie entrepreneur in Blacksburg is looking for funding for her startup that will offer hemp lab testing services. A drug researcher and former elected official are teaming up to sell hemp products after years of development. A Riner winemaker has received all the licenses he needs to add hemp derivatives to his tasting room offering.
The seedlings are sprouting up near that winemaker’s home now, prompting funny looks from Richard Obiso’s 75-year-old father.
He didn’t want to miss the first growing season, which he hopes will offer big profits.
Cannabidiol, or CBD, is the component of hemp getting people the most excited right now. It’s not an intoxicant like tetrahydrocannabinol, or THC, which is also found in hemp. Scientific research is scant, but CBD is anecdotally touted for helping with pain, stress, nausea and countless other ailments.
Virginia law requires growers and processors to keep THC levels down to trace amounts, so the plant can’t be used to produce the high associated with marijuana.
Michael Gordon, CEO of nationwide hemp marketplace Kush.com, said the price of harvested hemp varies based on the percentage of CBD it contains.
On average, he said, an acre of hemp is bringing in anywhere between $20,000 and $30,000 right now. For comparison, an acre of tobacco typically produces less than $5,000.
But Gordon warns that farmers all across the country will soon begin harvesting the first hemp crop since the 2018 farm bill legalized the industry at the federal level. That means there will be more growers, and — in his opinion — a price crash.
“It’s a bubble — that’s why we jumped on it as fast as we did,” Obiso said. “It has been lightning fast. I feel like I haven’t slept since the first week of February. It’s been literally 16 to 20 hour days just to get ready for it.”
As of this month, the Virginia Department of Agriculture and Consumer Services reported 161 industrial hemp processors registered and 36 dealers across the state. At least six processors have a location in Montgomery County, while Roanoke County has one processor and one dealer. None were registered in Roanoke as of June 21.
For those who can act fast, stay nimble and aren’t afraid of a little regulatory gray area, hemp represents a budding business opportunity in Southwest Virginia.
Here are some of their stories.
Blacksburg scientist Tom Piccariello used to leave his office in the Virginia Tech Corporate Research Center every so often and fly to Arizona or Illinois — anywhere he could borrow lab space in more hemp-friendly states.
That was three years ago, when Piccariello saw the business potential hemp harnessed — but Virginia laws wouldn’t allow him to begin experimenting.
He said he would conduct tests out of state, collect data, leave all the controversial substances behind and bring his findings back home. He said he would crunch the numbers in Blacksburg, design new experiments and then wait for his next trip.
Piccariello, president of pharmaceutical development startup Synthonics, was eventually able to receive a hemp grower’s license by partnering with Virginia Tech. He could finally do research in Blacksburg, but he couldn’t sell the stuff commercially until the hemp bill was signed earlier this year.
He’s now working with co-founder Jim Politis, a longtime hemp advocate and former chairman of the Montgomery County Board of Supervisors.
For now, ChyloCure is part of Synthonics, which is mainly focused on developing medications for thyroid-related diseases. Whenever the startup is able to secure enough funding, it plans to spin ChyloCure out as a standalone company.
“We waited for the state of Virginia to say it was OK for us to do this,” Piccariello added.
The hemp business hasn’t turned into a moneymaker quite yet for the company. It has years of product development under its belt, but has only just begun finding its first customers.
Instead of CBD, ChyloCure has focused its attention on extracting and processing cannabidiolic acid, or CBDa. It’s a similar component of the hemp plant, but Piccariello said he believes it may be more potent in the treatment of some conditions, such as epilepsy and anticipatory nausea.
The goal is to extract CBDa from hemp plants as an oil. The company uses magnesium to convert the oil to a powder, which can then be sold as is or added to topical creams and lotions.
Once the regulations become clearer, the company plans to produce edibles and drinks sometime soon.
Like CBD, research into the effects of CBDa is not definitive. But Piccariello points to early studies that show potential.
“The response we’re getting from people and the overwhelming enthusiasm that people have had regarding using our product is significant and cannot be ignored,” he said. “Something real is happening.”
Nathan Briggs spends a lot of his time figuring out ways to make hemp oil taste good.
Blacksburg-based Pervida recently launched a new oil-infused beverage: Calm. But the company doesn’t use any artificial ingredients, preservatives, sweeteners or dyes that could otherwise help mask the earthy flavor of the hemp oil.
That leaves Briggs, a product developer, working away in the company’s headquarters to come up with other solutions.
Pervida, known for its line of health waters, is selling Calm around the country. It has focused on distribution in Maine, Michigan, Indiana, New York, Georgia and Florida. Some stores locally and elsewhere around Virginia carry the drink, but Pervida is still working to grow the network in its home state.
For now, it’s producing only a blackberry papaya flavor, but more are on the way.
A can costs $4.99 and contains 12 milligrams of full spectrum hemp oil.
The company, founded by Virginia Tech researcher Josep Bassaganya-Riera, prides itself on its own internal testing and the use of a hemp supplier that has achieved certification by the U.S. Food and Drug Administration.
For now, that supplier is in Colorado — a state with a head start on hemp processing. If Virginia’s industry develops to the point it can offer the same quality product, Bassaganya-Riera said he would love to source locally.
“We know our CBD, we know our product and we know what’s in it,” Pervida Operations Director Jenny Collette said. “And we want people to be informed and make informed decisions.”
The company markets Calm based on its effect on stress, though the company says CBD affects everyone differently.
“It promotes relaxation, kind of puts you at ease,” Collette said. “But I don’t particularly feel sleepy. It’s not necessarily a before bedtime drink.”
At first, Collette said she spent a lot of time educating consumers on hemp oil, how it wasn’t an illegal drug and wouldn’t get them high.
But she said she’s noticed a shift over just the past few months, as hemp has received statewide mainstream attention.
“People are familiar with CBD,” Collette said. “They know what it is and what it does. So now our focus has been on talking about how Pervida Calm is different and better than some of those other competitor CBD beverages out there.”
East Coast Cannalytics
Becky Hobden first wanted to get involved with the medical marijuana industry, but the heavy regulations seemed to make that venture unreasonable.
So Hobden decided to move upstream. She wouldn’t grow marijuana or hemp, or deal with processing it herself.
Instead, her big business idea was to provide services to those who do.
Virginia law requires hemp plants to be harvested before THC concentrations grow potent enough to be considered a drug. Hobden is betting that means farmers are going to want to keep a close eye on their crops.
Her startup, East Coast Cannalytics, uses lab equipment at the Virginia Tech Corporate Research Center to test hemp. She can determine the amount of CBD, THC and other cannabinoids. She can also test for contamination, like pesticides.
There are out-of-state competitors offering the same services, but Hobden says those are big companies located far away. Some can take over a week to return results.
“If you’re trying to decide when to harvest your crop, that’s a long time to wait,” she said. “It’s a time sensitive process.”
Hobden admits it’s hard to tell how popular her service will be, since this is new in Virginia.
But she already has paying customers and has been receiving her first hemp samples since June. Cannalytics has signed two testing contracts with local farmers.
“When I was putting my business together the hardest number to come up with was how many samples I’m going to be testing,” Hobden added.
Richard Obiso has a Ph.D. in microbiology and worked in the biotech industry before launching Whitebarrel Winery.
But he still loves experimenting in the lab.
He plans to grow and sell CBD products at his Riner farm and wine tasting room. But Obiso’s bigger vision is to develop a new variety of the plant designed to be grown in vineyards, filling space below the grapes.
The idea is that hemp could serve as a cover crop, keeping invasive weeds out of the vines.
The new variety he wants to engineer needs to contain high CBD concentrations, while also growing significantly shorter than the usual height above 6 feet tall.
If he’s able to pull it off, Obiso would plant the hemp among his own grapes and also sell seeds to other vineyards interested in doing the same.
Farmers would make better use of their land and would have better yields, in theory. They would harvest the hemp first and then the grapes.
“And you’ve got no weed issues — other than the weed you’re growing,” Obiso joked.
The entrepreneur is calling his new hemp venture Avila Herbals.
Like the winery business, Avila said, almost all of its products are produced on his own farm.
He will grow the hemp, process it in an on-site lab and then sell refined CBD through distributors and in its tasting rooms.
In the meantime, Avila will be working to cross-breed species in order to design the vineyard hemp varieties.
Obiso would love to develop a CBD-infused wine, but current regulations don’t allow it. But maybe someday, he said.
For now he’s growing 11,000 plants on 6 acres of land, just down a hill from his wine grapes.
“We don’t have $1 million,” he said. “We’re like the scrap fighters. We’re going to try to grow 6 acres. We’re going to try to make the best product we can.”