West Texas farms set eyes on new cash crop: hemp
As laws change, commercial operation leads the charge away from produce
MONAHANS — Village Farms produces millions of pounds of tomatoes a year in huge, hightech greenhouses in West Texas, supplying grocers including H-E-B, Albertsons and Walmart.
But with the recent easing of both state and federal restrictions on growing hemp, it is now converting some of the greenhouse capacity for the state’s hottest new crop, with more expansion likely to follow.
“In the U.S. and Canada, in three to four years, we’ll be a hemp and cannabis company,” Village Farms President Mike DeGiglio said. “Two years ago, it was all vegetables. We’re now converting half of it to hemp.
“No one in the U.S. can make any money anymore in vegetables. We can’t win that war,” he added, noting the company will move the vegetable production to Mexico.
Village Farms International, based in the Canadian province of British Columbia, is leading the Texas green rush to grow hemp, as first reported in the Big Bend Sentinel.
While both marijuana and hemp are in the cannabis genus, hemp has only trace amounts of THC, the psychoactive compound that makes people high.
Despite this, farmers weren’t allowed to grow hemp for decades. The ban was lifted last year, clearing the way for production of a plant that is widely praised for its fiber and the nutritional value of its seeds. Industrial hemp is used to make rope, clothing and cannabidiol, or CBD, oil, which is thought to
possess medicinal qualities for a number of ailments.
At the Village Farms operation in Monahans, half of one 15-acre greenhouse that until recently nurtured tomatoes and cucumbers is being refitted for hemp.
“For growing in a greenhouse, West Texas is very good. Very dry, high light and at 5,000 feet, cool nights,” DeGiglio said. The company has operated the greenhouses there since 1992.
And when it comes to hemp in Texas, Village Farms has a big head start: It already has the seeds, the know-how acquired in Canada and 130 acres of greenhouse space in Marfa, Fort Davis and Monahans.
In Canada, the company is growing hemp and marijuana, which is sold to the federal government there. It is also getting involved in new hemp projects in Colorado and on the East Coast.
Since January, Valley Farms’ stock price has quadrupled, and the reason is no mystery.
In a greenhouse, DeGiglio said, a skilled grower can produce four or five crops of hydroponic hemp a year and generate at least four times the income produced by vegetables.
Once things are up and running in West Texas, the company plans to build its own processing facilities, largely to make CBD oil.
“We’ll build multiple extraction plants at the greenhouse level in Texas. We want to be a vertically integrated company like we are in produce. We’ll probably invest $100 million in Texas,” he said. “We’ll pursue field production of hemp in Texas as well.”
The fever starts
All this giddy change was set in motion late last year, when President Donald Trump signed the 2018 Farm Bill, effectively decriminalizing hemp. Before that, the U.S. was the only industrialized nation that prohibited growing hemp, which since 1970 had been classified as a dangerous drug, along with marijuana.
Texas lawmakers approved legislation this year making it legal to grow, manufacture and sell hemp products in the state, a change supported by Texas Agriculture Commissioner Sid Miller.
But before anyone in Texas can plant a hemp seed, much less harvest a crop, state and federal rules must be drafted and approved, which could take a year or more.
Eventually, seeds suitable to the Texas climate will be developed. A complete infrastructure must also be built to process and market hemp products.
In the meantime, hemp fever is raging among some Texas farmers who have suffered through a decade of declining income and are desperate to find a new cash crop.
Hemp’s many champions see thousands of commercial uses for it, from paper to cloth to edible seeds to the therapeutic oil. They also promise that it will offer higher profit margins than traditional farm crops.
“I’m getting calls from all over the state every day, people asking me when they can get their license to grow, to begin manufacturing and whether or not they can start importing material to start processing,” said Coleman Hemphill, president of the Texas Hemp Industries Association.
“I think there are hundreds of people, if not thousands, who want to get involved. It’s ready to pop off as soon as the state gets all the plans in place,” he added.
His mother, Sheila Hemphill, the organization’s executive director, is urging caution.
“The future is extremely bright and exciting, but we need to be sure we’re not overproducing raw materials without adequate processing, manufacturing facilities and retail markets,” she said.
“And, I do not want people to be swindled by opportunists,” she said, citing a farmer who had bought hemp seed at an inflated price without realizing it is still illegal to plant it. “He paid $2.50 a seed. It was a CBD strain. He got victimized, but you don’t know that if you are not in the industry.”
The Texas Department of Agriculture, which will create a Texas hemp program once the federal rules are made, is also being swamped.
On its website, the department offers a “Path to Hemp,” a detailed guideline that explains the law and administrative process and that answers frequently asked questions.
“All that we can tell them right now is that there are still some steps that must take place before anyone can grow hemp in the state of Texas,” said Mark Loeffler, a department spokesman.
Optimistically, he said, it may be legal to plant hemp next spring.
Both hemp and marijuana were outlawed during the Depression era, although an exception was made for growing hemp during World War II, when the fiber was needed for the war effort.
In 1970, the Controlled Substances Act classified both substances as a Schedule 1 drug, along with heroin, peyote and ecstasy.
In Texas, where declining farm income is now further threatened by the trade war with China, some see it as a potential life raft.
Eric Herm, 45, a fourth-generation farmer in Howard County northeast of Midland, plants about 1,300 acres in wheat, barley and cotton.
“Farming has not been profitable for a number of years. The only way I’ve been able to make it work is by being certified organic on my crops, so I get a premium and I try to deal directly with breweries, distilleries and restaurants,” he said.
Herm has been studying hemp for some time and is optimistic about what it can do for Texas dryland farmers.
“I think hemp is the future. That’s what my gut tells me. I firmly believe hemp will be a major staple of my farming operation for years to come,” he said.
‘Ready to roll’
Growing tomatoes and cucumbers in the middle of a West Texas oil boom has become more daunting for Village Farms, which is surrounded by man camps and oil field supply yards.
Because the company cannot compete on local wages, it relies on contract labor and workers bused in from El Paso. It must also provide onsite housing for some of its employees.
“Our turnover is ridiculous. McDonald’s here is paying about $17 to $18 an hour,” said Derin Gemmel, a senior company manager.
And like almost all vegetable producers in the United States, Village Farms cannot compete with Mexico.
“We’re on our way this year to have our worst year in the history of the company,” Gemmel said.
But on a recent walk-through of its 30 acres of greenhouses here, some already being readied for hemp, Gemmel sounded optimistic.
“We understand the seeds, the growing and the mother plant. It’s a process, and we are definitely ahead of the game,” he said, citing Village Farms’ experience with hemp, which he said is being shared with state agriculture officials.
Inside the steamy greenhouses, rows of spindly tomato and cucumber vines are planted in containers of crushed coconut husks and nourished with a hydroponic solution.
Heavy with vegetables, the vines climb 10 feet or more up thin wires and are harvested daily.
Below, large, white plastic ducts deliver cool air mixed with carbon dioxide to keep the plants from overheating. In the winter, hot water is delivered through a system of pipes to keep the plants warm and producing.
Gemmel said the sophisticated system can be readily adapted to the hemp plants.
Unlike tomatoes, growing hemp for CBD oil and processing the harvest are complicated, expensive tasks.
One change will be noticeable when the greenhouses are full of thriving hemp plants.
“This whole facility will smell like marijuana. We’ll probably have to educate our employees not to steal it because it’s worthless,” Gemmel added.
All that remains before Village Farms takes the deep plunge into Texas hemp is the end of the ongoing bureaucratic process in Austin.
“We’re ready to roll. If we got the call today, we’d be running toward production very quickly,” Gemmel said.