It had been less than a year since farming and processing cannabidiol (better known as CBD) from the hemp plant became legal nationwide, and just four months since brother-and-sister team Jen Stark and Bill Rohrer of Harrington launched their CBD oil startup, EZY Venture, when they won a STEM EGDE grant of up to $100,000.
Though young, EZY Venture fit what the Delaware Division of Small Business was looking to fund: a Delaware STEM business under five years old with potential for growth, job creation and long-term viability. Inc. called the CBD oil business “The Next Gold Rush” in 2018, as the demand for the legal hemp extract climbed.
As an agricultural state, Delaware needed to get in on the CBD wave, and EZY offered the vital extraction technology that other hemp farmers in the state don’t.
“I’m an agronomist by trade,” said Rohrer, who also runs an agriculture and soil fertility business in Harrington. “My background has been production agriculture, working with farmers, soil plant science, so I had some interest as a farm boy and a small farmer to plant some hemp. I’m fascinated by how the plant grows and the whole dynamics of the plant.”
For Stark, whose background is in environmental engineering, the properties of CBD oil and what it may do as a medicinal product got her interested in the industry.
“I had a chronic shoulder issue and I had looked into [CBD oil],” she said. “So we were both looking at two different portions of the market, and talked about how it was growing and how it’s helped a lot of family members as far as inflammation and so forth.”
Since the company just launched in May of this year, at this point the focus is on acquiring the equipment needed to turn the plants into crude CBD extract that can then be sold to other labs for refining for use in consumer products.
“The plant is growing — we have a relationship with about 50 acres worth of industrial hemp,” said Rohrer. “We have the majority of our equipment and instruments. We have a supply chain basically under control. The way that I see it, the grant really increases our processing capabilities.”
And processing capabilities carry a lot of value in the industry at this point.
“There are a lot of farmers that are growing, but there are not a lot of processors,” said Stark. “In fact, everything we hear is that processing is a bottleneck, there aren’t enough processors out there for all the hemp that’s being grown.”
Starting out in an industry that currently doesn’t exist locally is a challenge, Rohrer said: “It’s exciting to be in a brand new business, but at the same time, it really sheds light on how we don’t have any infrastructure. If look at states like Colorado or Kentucky where they have much more significant infrastructure; that’s we’re we’ve got to be going. It may take a year or two or three years, but we’ve got to get there to support our business, the farmers and to really grow the economy locally.”
Currently, EZY has six informal commitments with local farmers, with a goal to extract 50 acres of high-quality industrial hemp this year and 100 acres next year.
And technology is a big part of the process, on every level.
“As an agronomist, I’m dealing with technology all the time with production agriculture,” said Rohrer. “We do soil testing, we do plant tissue testing, we do fertilizer and manure, so we have the instrumentation to provide data to [farmers] that can make data-based decisions. We don’t grow a plant anymore based on how our dad or granddad did it, we do it based on what the data’s telling us. We’re forced to do more with less land [now], and and we have to take advantage of the technological side of production agriculture in order to be more profitable.”
As for the market, Stark and Rohrer are confident that it will only grow.
“The next major milestone that can change the market is when the FDA basically makes some decisions on [whether it] will approve or won’t approve products that provide a health benefit,” Rohrer said. “Right now you can’t do that. For example, if you sell CBD and say it helps with insomnia, then you are not compliance with the FDA.”
FDA approvals on medicinal use for specified conditions could grow the market quickly, but even without FDA approvals, it’s a growing industry. Even legalizing THC (the cannabinoid that gets you high) for recreational use is likely to not hinder the CBD business, they say, though it would make it easier to grow hemp and stay within the legal parameters.
“When you look at the market, there’s a much smaller pool of people who want THC products than people who want CBD products,” Rohrer said. “A lot of people want pain relief, they want the benefits that CBD and other cannabinoids provide and they really don’t want to get high. I don’t see how it would hurt the hemp business. The hemp business is probably hurting the marijuana business.”