2023 NOCO Hemp Show: Reflecting on the Elusive Concept of "Quality" in the Hemp Industry

As I strolled through the halls of the convention center at the Broadmoor in Colorado Springs for the 2023 NOCO Hemp Show, I couldn't help but reflect on how the industry has evolved over the years. In its early days, when NOCO was in Fort Collins, farmers saw hemp as a lucrative crop thanks to the sales pitches of equipment manufacturers promising high returns on investment for "CBD" crude oil. As the industry matured, the showroom floor became crowded with white-labeled "Organic and Natural" CBD tinctures and gummies, but eventually, the market became saturated, and prices began to plummet. During the industry downturn, some equipment manufacturers were able to secure prime real estate to promote their technologies that claimed to be cross-purposed and patented, but were actually pending perpetually. They used names that misled people into thinking that by simply putting hemp in, they could get isolate. This eventually led to the infamous craze for delta-8 THC, as some people gave up on CBD and saw the lucrative potential of the 2018 bill which had many grey areas.

The hemp industry has certainly had its share of ups and downs, and those who are willing to adapt are the ones who will thrive. With the failure of CBD, the industry has made a hard pivot towards the chemical manufacturing of ∆8-THCs. However, it seems that the lessons of past failures have been forgotten, as the showroom floor is no longer cluttered with "GMP Compliant" ethanol extractors or CO2 machines that falsely promise "isolate" in their names. Instead, commercial building materials and industrial decortication one-stop shops now occupy the space, promising a future for hemp fiber. While this pivot holds promise for investment, I fear that without proper risk management, the industry will remain isolated in state-specific pursuits, rather than accessing the global markets that are waiting for it. It's important to remember the mistakes of the past and use them as a guide for smart, sustainable growth in the future.

As I walked the showroom floor this week, I once again heard the empty promises from the beehive. It was alarming to hear and not cringe at statement like

"Yes, the market crashed, but we weeded out the people pretending to be farmers, if you grow again, we promise to buy at $0.91 per point!"

Two questions instantly came to my mind….

It crossed my mind, was this an effort to resuscitate the national planted acreage of hemp from its downward spiral?

We have all witnessed how year after year, the numbers of planted hemp acreage have declined because the commercial agri-businesses would no longer settle for mere good intentions and hollow promises as compensation for their hard work.

Has the low-quality cryo-ethanol crude that flooded the US markets in 2019 finally run out, and are these "brokers" once again forced to work for the "machine"?

As someone who has witnessed the ups and downs of the hemp industry, I can't help but approach salespeople with a healthy dose of skepticism. It's disconcerting to see some industry players prioritize their own interests over the wellbeing of farmers and the industry as a whole. It's time for us to demand full transparency and ethical business practices from these individuals, in order to ensure the sustainable and responsible growth of the industry.

I find it challenging to engage in coddling conversations. I prefer straight and honest discussions to assess whether it's feasible to cultivate a long-term business relationship with the people I'm interacting with. It's crucial to establish trust and transparency from the outset to avoid misunderstandings or false expectations. In the world of business, there's no room for sugar-coated conversations that do not reflect the reality of the situation. It's better to be direct and candid to build strong partnerships based on mutual respect and honesty.

As a seasoned attendee of trade shows, my day typically consists of a flurry of activities - from waking up early to pressing my clothes, to checking my email on my trusty cell phone before dashing off to my first meeting over coffee. And of course, there's always time for a quick breakfast or brunch before hitting the showroom floor.

But this year's NOCO Hemp Show was different. I found myself drawn to backrooms where banks, financial lending organizations, and insurance companies were huddled together, seeking more information about a "hemp standard" that everyone seemed to be talking about.

As a member of the team that has been working on this standard for almost five years now, I was thrilled to hear that our efforts were gaining traction. Could it be true that there was finally a "Responsible Hemp Standard" that was gaining widespread acceptance in the industry?

The real question on everyone's mind, however, was how we could leverage this opportunity to create a risk mechanism that would allow us to back farmers and teams involved in the space. This was a game-changer for the industry, and I knew that we had to act fast to seize this moment and create a sustainable future for everyone involved in the hemp industry.

Before I go any farther, I'd like to point out that I think that it's crucial for farmers to not only recognize, but also understand that there are options available to them, and these programs were developed specifically for them to demonstrate their farm's commitment to meeting and exceeding consumer demands, while creating assurance for financial institutions to back their organizations. When farmers meet the quality standards for these networks, farmers are ensuring that their products are marketable, and this commands a premium price that creates the supply chain they have been looking for. Ultimately, our goal is to help farmers achieve success in the global marketplace, while also maintaining the highest quality standards so that every link in that supply chain is satisfied to the fullest.

After lunch, I joined a group of peers and participated in a conversation. During the discussion, a farmer took offense due to a misunderstanding that occurred in a breakout room regarding the reference to "quality." It was interpreted as a direct comment on the quality of the hemp that came from their farm, when in fact that was not the intended meaning. I took a moment to gather my thoughts and consider my response. While I never intended to be impolite, it was important for me to convey that their product did not meet our network's standards. As someone with less agricultural experience than the farmer, it can be challenging to have these conversations.

I took the opportunity to have a candid conversation with the farmer to provide clarity regarding the term "quality." Global networks adhere to specific standards, and Sourcing Strategy teams for many of the global brands and retailers demand a specific definition of “quality”. In truth, over the last five-years, much of the hemp we have seen did not meet those definitions of “quality”. While many of the lots we had seen did meet the state's "Organic"….certificate, many clearly recognized that these methods were “preferred”, unfortunately preferred methods do not always align with the demands of the global brands and retailers we work with.

I wanted to emphasize that my previous comments were not intended to suggest that the farmer's hemp was of low quality. Rather, I wanted to make the distinction that our network has specific requirements that must be met to ensure success in the global marketplace. While the farmer may be producing high-quality hemp according to their local state's organic standards, these standards may not be recognized or accepted by the global marketplace. My intention was to convey my statement as a point for discussion, not as an insult, and to emphasize the significance of meeting specific standards and requirements to successfully participate in global markets. I hoped that the farmer would understand that our comments were not meant to undermine their production efforts.

HIGHLIGHTS FROM NOCO9

From White Labeling to Certifications: The Exciting Shifts in Hemp Industry Conversations!

From a business perspective, it is encouraging to see that conversations regarding compliance topics like regulations, ESG, sustainability, and certification are finally taking place at the NOCO Hemp Show. These discussions highlight a shift towards supply chain management, transparency, validation of the rampant unsubstantiated claims and accountability that is long overdue in this industry.

It is important to recognize that hemp, like any other globally traded agricultural commodity, must comply with regulations, adhere to ESG principles, practice actual sustainability, and obtain certification to maintain market relevance and competitiveness. Failure to do so can lead to reputational damage, legal and financial penalties, and loss of consumer trust.

While it is commendable that these conversations are taking place, it is concerning that they have not been promoted more actively by the show organizers. It is essential that the show creates a platform for these discussions and actively encourages industry players to engage in them. This will not only help to raise awareness of compliance issues but also foster a culture of accountability and transparency in the hemp industry.

BREAKOUT SESSION ON DAY #2: ESG STRATEGY

During day two of the show, I attended an ESG breakout session where I heard murmurs about liberal ideals trying to infiltrate the industry. The truth is, ESG is not a buzzword that can be easily Googled and incorporated into a company's SOPs. It requires a cultural shift at every level of the organization, including documentation, roles, third-party validation, and voluntary certification.

Many may resist the idea of regulations and certifications, but this resistance is misguided. Embracing these measures is critical to the future of hemp. It's time to recognize that the voices that led us to where we are today may not be the right voices for the industry's future.

I honestly think that is of the utmost importance for farmers to understand that the demands of the market can vary and it's important to adapt to those demands to remain competitive. By meeting the quality standards of our network's buyers, farmers can ensure their products are marketable and able to command a premium price. Ultimately, the goal of programs like RHS is to help farmers achieve success in the global marketplace, while also maintaining the highest quality standards.

The potential of hemp is undoubtedly enormous, but we must remain vigilant of those who are still trapped in a victim mentality. We cannot continue to allow the same voices that have promised false assurances to dictate the future of this industry.

As in every agricultural crop, the supply chain is the establishment. While I appreciate the counter-culture that built this industry, we must create an establishment that will ensure the industry's sustainable growth.

In the end, the success of the hemp industry depends on its ability to adapt and embrace change. While it's understandable that some in the industry might be resistant to regulations and certifications, the reality is that these measures are increasingly necessary for the industry to thrive. By working together to create clear and effective standards, the industry can build a foundation of trust and reliability that will benefit everyone involved. So let's stop resisting and start embracing the future of hemp!