Joy Beckerman: The Future Hemp Economy

Joy Beckerman is the founder of Hemp Ace, in addition to being a nationally-recognized industrial hemp activist and expert. As a hemp consultant, she is a frequently-sought speaker at industry events, and was a panelist in the Economic Benefits of Cannabis and Hemp panel that we attended at this year’s Washington Cannabis Summit. Joy recently joined our podcast host Shango Los for a discussion of the far-reaching impact that industrial hemp is likely to have on our economy, ranging from food agriculture, to textiles, to fuel, and even nanotechnology. She also outlines how the industry will likely formulate and grow as hemp cultivation is legalized across the country, and how outdoor hemp farming can coexist with outdoor cannabis crops.

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Shango Los: Hi there and welcome to the Ganjapreneur.com Podcast, I am your host Shango Los. The Ganjapreneur.com Podcast gives us an opportunity to speak directly to entrepreneurs, cannabis growers, product developers, and cannabis medicine researchers all focused on making the most of cannabis normalization. As your host I do my best to bring you original cannabis industry ideas that will ignite your own entrepreneurial spark and give you actionable information to improve your business strategy, and improve your health, and the health of cannabis patients everywhere. Today my guest is Joy Beckerman. Joy Beckerman is president of Hemp Ace International, an industrial help consulting and brokerage firm serving domestic and international clients. She is the industrial hemp advisor to the North West Farmers Union, and sits on multiple advisory panels and boards. She owned the first hemp store in New York in the early 1990’s and was appointed to serve as the secretary of the Vermont Hemp Counsel in 1996.

Joy then also developed an extensive career as a compliance and complex civil litigation paralegal working with some of Seattle’s most distinguished attorneys. Joy is the recipient of the national hemp industries associations 2014 hemp activist of the year award, and works extensively with policy makers. She is an internationally renowned public speaker and conducts continuing legal education seminars for attorney’s on industrial hemp related law and policy. Thanks for being on the show Joy.

Joy Beckerman: Such an honor and a pleasure Shango.

Shango Los: Joy, often episodes about hemp focus on the astounding array of products that can be made from hemp. Today’s show is going to be a little different, focusing more on the business opportunities that exist within hemp today. That said it would be important to understand the wide array of the industries that American hemp agriculture can impact, so let’s start there. Would you give us a snapshot of the variety of industries that are going to be impacted when hemp comes online here in the U.S?

Joy Beckerman: My favorite story to tell, the full spectrum. We start with the seed because that’s where the least amount of infrastructure needs for us to take advantage of that market. We buy ninety percent of the seeds from Canada, so seed is for nutritional, cosmeceutical, and industrial purposes. Not just fuel because there are other parts and I’m sure we’ll talk about them further on about fuel from the actual cellulose, but also varnishes and protectants. From there we move onto paper, tech styles, twine, yard, cordage, building materials, bio composites, and now and this we didn’t see coming twenty-five years ago, nano technology and super capacitors. It is endless.

Shango Los: I’ve got to hit on the nano tech, in what way does hemp expand to nano tech?

Joy Beckerman: Thank you, well right now what we have for the best RND material and the greatest material that we could use on the market are carbon nano tubes. What we’re talking about, surface area in strength on a nano level, which is about I think to the nine millionth exponential factor, something very, very small. For example, if you wave your hand in front of your face right now a nano meter is about how much your fingernail grew as you waved your hand in front of your face. What they have discovered is that hemp cellulose is the most valuable bio-cellulose on the planet, and it is second in surface area and strength only to carbon nano tubes. In terms of super capacitors we are finding that it is superior to graphene. They’re even starting to make biomedical nano technology, sort of fake skins and everything. I mean we are really making huge strides, and that was about in August of 2014 is when that research started to be released publicly.

Shango Los: I’m really glad that you mentioned that, you know I really mostly think about the plastics, the fibers, the clothes, and the ropes but the high tech impacts are going to be huge as well. Before we can achieve that bright future with hemp we’ve got to make hemp a national industry, and that’s dependent on the laws changing. Give us a road map, what is the legal status of hemp agriculture right now and where are the hot spots of where it seems to be growing in our country?

Joy Beckerman: Thank you for asking that, well you know I have to say that the feds have the hemp heroes in the federal legislature, which is very bipartisan. They have carved out a path for a truly responsible way for us to reintroduce industrial hemp state by state. That happened in the agricultural act of 2014, which most folks refer to as the farm bill. There was an amendment that was included that changed history, and changed the landscape for cannabis. That is section 7606, which is known as the legitimacy of industrial hemp research. Very simple, plainly written two page bill, double spaced and in that bill some very important things happened. One is industrial hemp was defined and distinguished from marijuana for the first time in U.S. history, and it is defined as any part of the plant cannabis sativa whether growing or not that contains greater than .3% THC on a dry weight basis.

Where as our definition of marijuana in the controlled substances act does not discuss this earnest, small, non scientifically based … God help him, he regrets very much having being responsible for this .3, but so where as the definition of marijuana doesn’t include this .3 now we have a definition for industrial hemp which does. A side note, and we’re going to bring that up I’m sure later on with regard to the market for cannabinoid extraction, non euphoric cannabinoid extraction from the plant material, and flowers essentially of the hemp plant. It does not have in this definition of industrial hemp a carve out for the resins, which those of us who have, you know, deeply studied the law and policy from the marijuana tax act through the controlled substances act with regard to that definition of marijuana. We know that even in that second sentence of the definition which details the exception for the oil, seed, and fiber variety of cannabis of course industrial hemp, there’s still an exclusion to the exception in that sentence and that is for the resins of the hemp.

Where as in this definition of industrial hemp, in the farm bill, section 7606 there is no carve out. That becomes very significant as we begin to talk about what Kentucky, and Colorado, and Oregon are doing and the hemp truck that they are driving through this gray area, this hole.

Shango Los: Are those going to be the states that we’d consider our hot spots right now would be Kentucky and Colorado? They are on the vanguard of all of this?

Joy Beckerman: Yes, and with Oregon close behind. What I also want to say is that Section 7606 was very clear, you are only states that, “Permit the cultivation of hemp.” That doesn’t say legalize, that says that permit the cultivation of hemp through the state legislative process will be allowed to take advantage of this. On top of it once the state legislature permits it, permits the growth of it they generally in these bills also say that their state departments of agriculture will now form rules. In section 7606 only, state departments of agriculture and institutions of higher education are allowed to do these agricultural pilot programs. Now that is another term that’s defined in there, “Agricultural Pilot Program.” In that we are allowed to study the cultivation, the growth, and the marketing of industrial hemp.

Now that word marketing included in this research amendment is huge because we are considering that also a big hole to drive a hemp truck through, and we’re calling that commerce. We’re saying that’s a green light, and guess what? The feds are also saying that’s a green light. There are a couple of really important other pieces of federal legislation for me to discuss, but I sense you might have a question before I move onto those.

Shango Los: Yeah you’re right about that. What I’m seeing is that at the federal level they’ve given us the green light. Now the ball is in the states; courts, and Kentucky, and Colorado, and Oregon are quick to jump. I’m assuming there are a couple of other states who are coming up behind, I actually am aware of the recent disappointing veto in Washington. There’s a bipartisan legislation that had made it through both the house and the senate and got to Governor Inslee’s desk and he vetoed it, kind of in revenge from what I hear for the house and the senate not passing the budget that he’s looking for. I’m already hearing whispers that this bill is going to be reintroduced and they’re going to massage that.

For everybody who’s aware of that and concerned about what happened, what’s the latest update on the Washington legislation?

Joy Beckerman: Well what’s happening in Washington is very interesting because we’ll be the twenty eighth state to permit the cultivation of hemp once we get that bill passed, and I’ll touch upon that in a second. To answer your first question we have twenty seven technically states that have legalized hemp, only eight that have ever put seeds in the ground because of this oversimplification of what hemp cultivation is. Bills and policy are not written that will actually allow seeds to go in the ground. Having said that for sure Kentucky, Oregon, and Colorado are in the forefront. Washington, we’ve been at it now for three years, working on these hemp bills. This year the WSDA and I decided basically we were going to get together, get a united front, and double team the legislators because we’ve had competing bills each year both in party and in house. That has in itself been a problem within the legislature.

This year we, with some of the new laws that have passed, particularly section 763 of the Consolidated Appropriations Act, which we’ll talk about in a little bit, we knew for Washington that we were going to make our bill in-compliant with section 7606 because now we have a lot of additional protections. Having said that we will, right now as the governor you say has indeed punished the legislature for not doing the one thing that the governor believes the legislature should have done this year. He punished them by taking thirty seven of the bills that they basically worked hardest to agree on the most, and twenty seven of them he vetoed which we do believe is the largest batch that was ever vetoed in the Washington state legislature, ten he didn’t because they had to do with health and safety.

Lucky for us it is the senate majority leader who needs to reopen that vote, and it is the senate majority leader, Senate Mark Schoesler who is a cosponsor of the senate bill for industrial hemp. We believe that he’s going to reintroduce that.

Shango Los: That’s certainly really convenient right? So often when something gets vetoed you have to go back to square one and try to convince someone to reintroduce it but the fact that it’s actually the sponsor really makes your job that much easier. You know, we need to take a short break for a moment Joy. We’ll be right back, you are listening to the Ganjapreneur.com Podcast.

Welcome back, you are listening to the Ganjapreneur.com Podcast, I’m your host Shango Los. Our guest this week is Joy Beckerman, president of Hemp Ace International. Joy right before the break you had mentioned a recent federal bill that included additional protections and how those were going to move us forward so quickly. Will you go ahead and break that out?

Joy Beckerman: Thank you, so each year our federal government even though they haven’t passed a balance budget in fourteen years, they do pass a consolidated appropriations budget because things do have to move forward annually. This year we had some additional protections, I’m sure we can thank the state of Kentucky which has moved forward with true high CBD low THC varieties of cannabis that fit a legal definition of industrial hemp but are being grown specifically for non euphoric cannabinoids. Of course the property mostly being targeted as you can imagine is cannabidiol CBD, so they really had to protect themselves. They knew they could take advantage of the fact that this new industrial hemp definition did not include resins, but meanwhile they do know that the resins are still included in the controlled substances act as a scheduled one control substance.

In this consolidated appropriations act of 2016, buried within section 763 it says, “The department of justice and the drug enforcement administration may not use funds to one, in contravention of section 7606 of the agricultural act of 2014.” By the way that language existed in this bill from last year, so that’s not new, we had that language last year that it said in contravention of section 7606. That wasn’t very clear, was it? They added language that was adopted and became the law of the land on December 18 of 15, and it now also says, “Or two, to prohibit the cultivation, transportation, processing, or sell of industrial hemp that is cultivated in compliance with section subsection 7606 of the AG act of 2014,” and get this, “Within or outside of the state in which it is grown.”

It is only because I know I’m on radio that I’m not yelling and crescendoing my voice as I say that because this is huge you guys, this is historical that we are now, the feds are heroes, our federal legislative hemp heroes have now created this research pathway, which by the way is responsible because we don’t have cultivars here in America that will serve immediate needs. We have to reach outside of our borders to get pedigrade seed from the thirty one developed countries that have these beautiful varieties that are meeting sophisticated demands of today’s global markets for these many industries that I just discussed. We have got to be able to access those seeds. As we access them and plant them in these research crops, some of them are failing and what we don’t want is large growth commercial farming right out of the gate for hemp where we have crops that fail. The naysayers will say, “Oh, they said hemp was going to save the world, they said hemp would grow everywhere,” which it doesn’t by the way, not without irrigation and other inputs.

The point is we’ve got to have success, so the fact that we get to reintroduce under research really helps us learn and not have this horrible judgement when as we learn and crops may fail along the way, as we test cultivars. Having said that this new language that protects the transportation, and the processing, and the sale beyond state lines is more of a giant hole for Kentucky, for Colorado, for Oregon, and hopefully for Washington. I’m going to give you a bit of the, I don’t want to say bad news but obstacle that we’re facing in Washington even when we pass our bill with regard to this cannabinoid extraction market. The reality that even in Canada where they have legalized since 1998 they are mostly growing only for seed. Shango, that’s because it’s expensive to create an infrastructure to process that long, tall, strong, hard fiber, the stock.

In Canada, again, since 1998 for the most part they actually plow their fiber back into the ground. Matter of fact …

Shango Los: Wow.

Joy Beckerman: Yes, we buy ninety percent of their seeds. What we have to do as we look at the business opportunities that are immediately open to us, and then that we can grow into are one, the seed nutrition. We have combines, most states already have seed crushing facilities and meal facilities. By that I mean we take the meal that the seed cake, that’s left over from pressing any seed generally and that is dried and then sifted and ground into various powders, that’s where we get hemp protein powder from. It’s not ground up seeds, that would make a nut butter. It’s the ground up and milled seed cake left over from the seed industry. Anyway, we have those infrastructures in most states. The only thing we’re missing in most states are dehulling mechanics, that is the dehulling takes the shell of the hemp seed and separates it from that beautiful nutrient-dense, protein-filled heart. Of course it is the highest form of protein, and the highest digestible form of protein, and the highest essential fatty acid profile in the entire planet animal kingdom. That’s your immediate market.

Second immediate market, and this is why these protections in the consolidated appropriations act of 2016 are so significant are non euphoric cannabinoid extraction. To the extent that industrial hemp can be ethically grown for human consumption, and for a therapeutic and medical market. There are high standards and ethics that go along with that, of course you would understand, that we then can just use extraction technology which is not nearly as expensive as the infrastructure to decorticate the fiber. Right now the Kentucky department of agriculture is valuing that crop at ten thousand dollars an acre. I work very closely with the Washington state department of agriculture and of course I have brought the Kentucky department of agriculture into our meetings so that we can educate our own state on the incredible opportunities that Kentucky is taking advantage of and they are taking advantage of non euphoric cannabinoids.

When they say ten thousand dollars an acre I’m saying even if they’re wrong by ten times let’s go a thousand dollars an acre, it’s eighty dollars an acre for hay, and about …

Shango Los: Yeah that’s still an incredible return.

Joy Beckerman: It’s huge, and it would generate the revenue that we need to build the infrastructure for these decorticating facilities and processing facilities for the stock, which is where we’re going to be getting our paper, textiles, twine, yarn, building materials, our bio composites, nano technology, and super capacitors. Brother, that is all going to come from the stock but we have to build the infrastructure. I do want to say, because this is very important to the entrepreneurs out there, that it isn’t just the old school decorticating facilities which separate the bast fiber, which is the bark, or the long fibrous outside of the stem from that inner woody core which we call the shid, or the herd. A basic decorticating facility is going to separate that bast from the herd, but what we seen in modern day is then they take it that much further. Then they’re processing the herd to different geometric particle sizes to serve different purposes, whether it’s a bio aggregate for say hemp cream building material, or whether it be used for animal bedding, or a ply wood made with hemp type thing.

Having said that, this is very important for the entrepreneurs out there. There is a technology that has been patented by a company called, “Pure Vision Technology” based out of Fort Lepton Colorado, this is Dr. Winger and the Lurburger brothers, Ed Lurbuger. They have a patented technology that’s fractionalization, it separates the stock into cellulose, linens, and sugars. From those three elements we can make thousands of industrial products and it applies to many applications including methane fuel. Now they have created a secondary company called, “Pure Hemp Technology LLC,” this is the licensing arm that licenses the Pure Vision Fractionalization technology and they even have a new testing facility going up in Southern Oregon. I’ll wrap this up for you, but to tell you what we ultimately need to see around this great country are processing facilities within fifty miles of every biomass feed stock, whether they’re the fractionalization, decortication, or dehulling, and seed pressing, and seed cake milling. Those are the main mechanics that we want to see.

Then of course we need to go into textiles, which China is way ahead of us. Right now there are only three paper companies in American that could process hemp fiber. All of those infrastructures need to be built, but we’re talking about immediately seeds and non euphoric cannabinoids.

Shango Los: Well that’s a pretty great picture and a timeline that we’ve built there. First we’ve got the feds giving the green light, then we’ve got the rules being made at the state level, then we’re moving into seed nutrition, a non euphoric CBD which is going to cause the capital to exist in the industry to start building these decorticators fifty miles from where the farms are. There’s a lot of opportunity for money to be made and for this to all happen very swiftly it sounds like. We need to take another short break, we’ll be right back, you are listening to the Ganjapreneur.com Podcast.

Welcome back, you are listening to the Ganjapreneur.com Podcast, I’m your host Shango Los. Our guest this week is Joy Beckerman, president of Hemp Ace International.

So far on the show we have had a whirlwind timeline of what’s going on in hemp right now from the federal government giving the green light, the states making it’s rules, and now all of the capitalists getting to their particular roles to make this all happen and raise the money to start building these decorticators. At the same time the medical cannabis and recreational cannabis industries also on the rise in our country, and you know Joy one of the things that I hear most is a spastic concern of people that industrial hemp is going to come online outdoors and cross pollinate into the recreational and medical cannabis outdoor crops. You know we’re big fans on this show of outdoor growing of marijuana because of the decreased carbon footprint from indoors, but everybody’s got an opinion about whether or not there’s going to be cross pollination or not.

I figure you have probably got some fact, so boil that down for us. Are we going to see an issue with industrial hemp cross pollinating into recreational cannabis?

Joy Beckerman: Thank you for asking this really important question which I can only preface by saying it is a shared concern. You must know of course that we will easily convert our industrial hemp farmers into interstate and international drug farmers if God forbid their hemp should creep up over .3% THC. It is just as much of a concern of marijuana cross pollinating with the industrial hemp as it is in the reverse. I just always want to preface by saying that. The reality is that it is distance only that I see the state of Washington using in terms of a barrier between cross pollination. Ultimately we know that bees travel about three miles from their hive, and even though it’s true and this is where the hysteria comes from … well there are two pieces actually. It’s true that there have been studies out there that say, “Pollen can travel two thousand miles from one continent to another and we have proof of that.” It’s a small planet, this little blue marble that we all share together so that’s now how we deal with agriculture.

It’s actually a fairly common concern with very common solutions. Those solutions would be A, distance. B, not planting at the same time as many fields, corn, and sweet corn folks do. As a matter of fact there’s a licensed hemp farmer in Oregon who is also a corn farmer and he has a neighbor who plants corn, and his neighbor plants GMO corn and he plants non GMO corn, so they don’t plant at the same time. Having said that for industrial hemp, AOSCA, which is the Association of Official Seed Certifying Agencies, for the first … and this is the seed certifying agency that most developed countries subscribe to, China does not which is why we don’t normally get human consumption items from China. They have developed as Canada has, a way to keep even cultivars, because there are hundreds of cultivars and varieties of industrial hemp, from cross pollinating by distance. With just different types of industrial hemp it can go from one foot, to three miles to avoid cross pollination.

If I’m a betting woman I would say that the WSDA is simply going to use the distance of a maximum of three miles keeping in mind that it just does so happen that our own seed certification gentlemen from our WSDA is also just so happens to sit on that international sub committee for AOSCA, so it has been particularly sophisticated in learning about industrial hemp from the last couple of years due to his position on that international sub committee. That has been very beneficial to us. Now, do we want to absolutely respect our outdoor growers? I want you to know, I am the first line of defense in our own state legislature in Washington. I want you to know by the way, just a side note, that in Washington in our current bill once it has passed, we’re not going to be allowed to collect plant material for non cannabinoid extraction.

I realize I digress a little bit, but before the show ends I do want everyone to know that has been written out of our bill, we’re only going to be allowed to use seeds and not plant material. We will not be taken advantage of that great financial opportunity, and there are reasons for that, that perhaps I’ll go to in another show. It has to do with testing standards, WSDA’s testing standards versus our liquor and cannabis board, and the WSDA standards are much higher.

In any event, moving back to cross pollination. I’m the first line of defense because there are legislatures that are in these agricultural parts of our state that are so pro-hemp that they want to pass a law to make all of the marijuana go indoors. I sit there and say, “Oh you know not what you say, please. That would be an environmental catastrophe.” Number one, we cannot have all of our marijuana go indoors and we need to continue to increase the canopy, I think, of our legal marijuana market. While I am definitely a proponent of using distance I also recognize that there are parts of our state where there are particular amount of sun grown marijuana. It is potential that in those parts of our states, perhaps we should make those regional and put barriers around those and say, “You know what? We’re not going to allow hemp farming in these particular regions.”

An interesting thing, in Oregon the Oregon hemp industries association has put a voluntary moratorium. I don’t think that I would be able to do that in Washington, I am an industry leader here and a trade association leader here but I don’t like going up against farmers. Legislators in that manner are telling hemp farmers that what I think they should do versus what the department of agriculture is telling them to do. Having said that I will probably take on the same tact of discouraging large scale commercial hemp farming around certain areas of the state, to the extent that it’s not law.

Shango Los: Distilling it down the short answer is yes, there’s going to be cross pollination. There’s going to be cross pollination from hemp to peoples personal grows, there’s going to be cross pollination from gorilla grows over to hemp, there’s going to be cross pollination between hemp and legal grows that it’s going to have to be worked out either by when they are each planted, or distance. On a botany level this is going to be a real problem.

Joy Beckerman: I have to correct you, no, I have to correct you. It’s absolutely not going to be a real problem. Everything that you said, as much as I love you, has actually just contributed to the hysteria. I did a bad job explaining.

As much as we want to …

Shango Los: In under twenty seconds do you think you can clean that up?

Joy Beckerman: Yes, and we’re going to start out with those distances so that we can collect hard data to disprove the hysteria that exists. Pollen from industrial hemp is large, it would take tremendous climactic and wind factors in order for it to travel any significant distance at all. We want to start out by making everybody feel comfortable, we are going to learn to thrive and prosper together. Cousins, and sisters, and brothers in cannabis and we want to start out by making everybody comfortable with these distances and collect the hard data so that we can disprove the hysteria and close up those distance gaps. That’s what I’m saying.

Shango Los: Right on, well thank you for re-clarifying that because I definitely didn’t get the right gist. That’s all the time we have for today, thanks for being on the show Joy.

Joy Beckerman: It’s such an honor and a pleasure, thank you Shango for everything you do for cannabis everyday.

Shango Los: You can connect with Joy Beckerman at HempAce.com. You can find more episodes of the Ganjapreneur podcast in the podcast section at Ganjapreneur.com, and in the apple iTunes store. On the Ganjapreneur.com website you will find the latest cannabis news, product reviews, and cannabis jobs updated daily along with transcriptions of this podcast. You can also download the Ganjapreneur app in iTunes and Google Play. You can now also find the show on the I Heart Radio network app, bringing Ganjapreneur to sixty million mobile devices. Do you have a company that wants to reach our national audience of cannabis enthusiasts? Email grow@ganjapreneur.com to find out how.

Thanks to Brasco for producing our show, I’m your host Shango Los.