Heartland Industries Cracks the Code to the Industrial Hemp Supply Chain Bottleneck

September 8th, 2020 – The 2018 Farm Bill opened the doors for hemp farming across the heartland of America. Since then, the world has seen dozens of different approaches from entrepreneurs who are looking to capitalize off of the new legislation. This has ranged from CBD farming and extraction, to hundreds of “anti anxiety” products being sold to everyone from humans to dogs. The executives at Heartland Industries understand that most of today’s hemp market is in the plant flower (where CBD is found). But, the big opportunity that most in the hemp industry are not paying attention to lives within the material science of the plants stalk.

The Heartland team has uncovered an opportunity to scale our industrial farming and processing while hedging the existing markets. After extensive market research, our executives have settled on an ESG compliant mandate that investors, clients, and employees across America can all align with. 

Most “hemp processing facilities” throughout America and the rest of the world focus on CBD extraction instead of industrial hemp. Much like wheat, industrial hemp is grown for their stalk in massive outdoor farms with 300,000-400,000 plants per acre. CBD on the other hand is grown for the flower either indoors or outdoors with about 1600 plants per acre.

Part of the reason that the hemp market is so skewed toward CBD is because industrial hemp isn’t a sexy and the supply chain doesn’t exist. The byproducts from industrial hemp are sold as inputs to products that are manufactured. These hemp-based materials can make hundreds of different manufactured products stronger, lighter, cheaper, and more sustainable. Most consumers aren’t familiar with the companies who provide the materials in the goods they consume. 

This is as opposed to the CBD market within the hemp industry. These CBD products are sexy and exciting because because the products are sold to everyday consumers. Most Americans know of CBD or know someone who consumes it. ‘Industry leaders’ across the hemp industry made CBD one of the trendiest new products of 2019. What most experts won’t tell you is that the price of CBD has dropped over 80% in less than 24 months. This adds price volatility and uncertainty for hemp companies only focusing only on extraction.

A properly executed industrial hemp processing facility requires Big-Ag infrastructure. This includes large farming partnerships (10,000+ acres), and large processing capacities (1,000,000+ pounds of plant matter per day). This is the only way to create a stable supply chain that manufacturers can trust for sustainable production volumes. 

At this current moment, most farmers who have committed to industrial hemp are growing small batches (dozens or hundreds of acres for R&D). The lack of supply does not allow for companies to use hemp-based materials on a regular basis. The American company who can source and process 1,000,000+ pounds per day will create a hemp supply chain that American manufacturers can rely upon.

In order to properly scale an industrial hemp processing facility, a few key things must be secured:

  1. Farming
  2. Storage
  3. Processing Capacity
  4. A Pipeline of Off-Takers

If all 4 of these key pieces within a hemp supply chain are not properly secured, an industrial hemp processing facility is setting themselves up to fail.  

Most companies are focused on small batch production with the ability to supply R&D materials. Heartland has identified a simple, scalable and repeatable path to solve these problems within the hemp industry. The successful execution of our facility in Detroit will make Heartland Industries the first U.S. supplier of hemp-based products to existing markets at scale. 

– Heartland Team

 

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