Texas will get nation’s largest hemp facility
Dallas-based Panda Biotech is establishing the nation’s largest industrial hemp processing facility at the site of an old GM Delphi plant in Wichita Falls.
The 500,000-square-foot plant and surrounding 97 acres will allow the company to “cottonize” hemp fiber at a scale to be sold and exported for use in textiles and other industrial purposes, according to the company.
Panda Biotech expects to close a deal to buy the former automotive parts plant by the end of the year and will invest $90 million in the facility, according to documents filed with Wichita City Council.
It plans to outfit the plant, called the Panda Texas Plains Hemp Gin, with heavy equipment designed for hemp-processing, which the company’s engineers have worked to “supersize,” according to Panda Biotech.
What makes the plant unique is that it will also be capable of “cottonizing,” or degumming, the crop — a necessary step in getting a refined product to textile manufacturers.
Panda Biotech will buy bales of hemp stalk from farmers that look similar to bales of alfalfa. From there, the fiber, which comprises roughly 25 percent of the hemp stalk, is isolated and removed in a process called decortication. It then gets cleaned and refined and the cottonization process pulls sugar and other substances out of the fiber so that it becomes soft and cotton-like.
The facility will be capable of producing 300 million pounds of industrial hemp annually once at full production, according to the company. To reach full production the plant would need just 45,000 acres of hemp to be farmed annually, said Panda Biotech Executive Vice President Scott Evans. For context, Texas harvests more than 5 million acres of cotton each year, according to the U.S. Department of Agriculture.
The company donated 60 tons of hemp seeds to Texas farmers in collaboration with Texas A&M AgriLife Extension in May with hopes of jumpstarting the industry.
The first of two production lines at the facility is already under construction and expected to be completed in December. Panda will begin partial operations at the start of 2021, and expects to have both lines operating by the second quarter.
The plant could have immense economic implications for the state’s agricultural industry. Growing the crop is now legal but farmers lack a buyer for the product, and buyers lack a centralized refinement center. Panda Biotech estimates its facility could generate $30 million a year for Texas farmers.
“This is plugging a big hole in the supply chain,” company spokesman Bill Pentak said.
The global hemp industry is only expected to expand, growing into a $15.7 billion industry by 2027, according to a February analysis from market intelligence firm Grand View Research.
Wichita Falls City Council approved up to $2.8 billion in incentives for the company on July 7, including a 7-year property tax abatement, providing it employs 100 workers at the facility with minimum pay of $15 an hour with benefits.
In a statement, Chamber of Commerce CEO Henry Florsheim heralded Panda Biotech’s vision for the hemp industry as “unparalleled” and said the company will help the city “become the worldwide epicenter of industrial hemp research, processing and product development.”
The city’s incentive agreement touts the potential for hemp-adjacent companies that would benefit from the processing plant to move more operations into the city in the future.
Panda Biotech’s Evans said the company considered sites around the state.
“The facility we’re moving into boasts 11 acres under roof and enough land to allow for expansion into strategic, new business endeavors that Panda is planning,” he said.
This is the first year hemp could be grown in Texas. After being banned for decades, the Texas state legislature passed House Bill 1325 in 2018 paving the way for legal industrial hemp farming. Federal legalization opened the door for interstate trade.
Hemp is a form of cannabis that contains low or untraceable amounts of tetrahydrocannabinol or THC — the psychoactive chemical in marijuana that gives users a high. It can be used in construction materials, automobile composites, textiles and other products.
Panda Biotech was founded by Dallas entrepreneur Bob Carter, who came up in the energy industry. He founded an unrelated private equity firm, Panda Power Funds, which owns and operates investments in clean energy such as solar farms.
Panda Biotech’s executive team has developed nearly two dozen projects representing more than $12 billion in investment, according to the company.