Regulatory questions hang over Kansas hemp industry as commercial growing starts

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PITTSBURG, Kan. As reported in The Hutchinson News, as legal hemp cultivation in Kansas enters its third year, licensed farmers can look forward to growing the crop commercially in 2021 rather than participating in the pilot program that has been in place since 2019. For those involved in later stages of hemp processing beyond just growing it, though, regulatory gray areas remain a challenge.

One such hemp entrepreneur is Colby Terlip. For the last several months, since receiving support from the City of Pittsburg in the form of a $100,000 grant, Terlip has been in the process of setting up his new business, Sunflower Hemp Co., on Rotary Terrace in the city’s Northeast Industrial Park. Through that process, Terlip says, the biggest issue he’s dealt with has been trying to get feedback from regulators about whether his business is in compliance with the latest rules governing hemp – which is the same plant as marijuana, but grown differently so that it doesn’t get you high.

“This is a very, very new industry,” Terlip says. “In the state of Kansas, we’re under the research pilot program at the moment, so the biggest hurdle has been making sure when we’re building the facility out, that we build a facility that would be in compliance with everything once the laws and regulations got into place, so we wouldn’t have to go back and retrofit or maybe potentially they’d shut us down for a while.”

Sunflower Hemp’s main business is cannabidiol (CBD) post-processing. Although hemp can also be grown for seed and grain, or for fiber that can be used for manufacturing textiles and other purposes, as of late 2019, the vast majority of Kansas hemp – about 90 percent – was being grown for CBD, according to Kansas Department of Agriculture (KDA) Industrial Hemp Supervisor Braden Hoch. Terlip said in an interview this week that the prevalence of growing hemp for CBD is unlikely to change much this year.

“There’s really no industry for the fiber and the grain,” Terlip says. “There’s not a huge infrastructure for that in the United States, so most people are trying to grow for CBD because they think that’s the better route to get their product sold. It’s been tough for farmers.”

At Sunflower Hemp’s 17,000-square-foot facility – which is not yet being fully utilized – employees first take crude CBD oil and refine it using a “short-path distillation” system.

“It’s basically like a fancy moonshine still,” Terlip says.

Next, the refined CBD oil is tested for purity using a process called “high-performance liquid chromatography.” The oil – at this point known as “full spectrum” oil because it still contains a “full spectrum” of cannabinoids, including tetrahydrocannabinol (THC), the psychoactive chemical in marijuana that remains illegal in Kansas – is then put through one of two additional processes. It can be either made into 99 percent pure CBD powder, or a “broad spectrum” THC-free oil, which still contains additional cannabinoids besides CBD, but has had all THC removed.

At first, Terlip planned for Sunflower Hemp to do its own extraction of crude CBD oil from hemp plant material, also known as biomass. With several other extractors now operating in the state and driving down the price of crude CBD oil, however, he switched his focus to post-processing. But just because Terlip’s business specializes in one step of CBD processing doesn’t mean he can’t help prospective hemp growers vertically integrate their own businesses – which will be key to their success, according to several people who are closely watching the hemp industry and broader agriculture sector.

If a farmer has hemp biomass, Terlip says, Sunflower Hemp can refer them to an extractor to get it turned into crude oil. Terlip’s company can then turn that crude oil into either a CBD extract ingredient or a consumer product that is ready to sell, while keeping it separate from any other CBD oil, so the farmer can legitimately sell it as a product made exclusively with CBD from hemp grown on their own farm.

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