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Hemp processor to expand operations in Kentucky

December 14, 2018

LOUISVILLE, Ky. (AP) — Looking to reap the benefits from federal action to legalize hemp, a hemp processor said Friday it will expand operations in Kentucky by building a $40 million plant in a rural area where it hopes to cultivate ties with farmers growing the crop.

GenCanna Global USA Inc. said its new processing facility at Mayfield in western Kentucky will create 80-plus jobs. The Winchester, Kentucky-based company is looking to contract with dozens more farmers next year to ramp up its hemp supply.

The company’s president, Steve Bevan, said GenCanna was pushing ahead with the venture regardless of federal action, but he cheered congressional approval to legalize hemp, saying it will greatly increase demand for hemp products, which will increase supply needs.

“We think the industry is going to blossom,” Bevan said in a phone interview.

The Mayfield venture comes days after Congress finished work on a new farm bill that includes a provision to legalize hemp cultivation. President Donald Trump is expected to sign the bill into law next week.

The hemp provision removes the crop from the list of federally controlled substances and treats the low-THC version of the cannabis plant like any other agricultural crop. THC is the cannabis compound that gives marijuana its high.

Federal legislation passed four years ago cracked open the door for some farming by allowing states to create hemp pilot programs or to conduct research on hemp cultivation.

Kentucky lawmakers including Senate Majority Leader Mitch McConnell and U.S. Rep. James Comer helped lead the pro-hemp push in Congress. On Friday, Comer predicted hundreds of Kentucky farmers will start growing hemp, drawn by markets backed by large investments to create processing and manufacturing operations close to production.

“For a farmer to be able to grow something, they obviously have to have a market to sell it,” Comer said. “The key to giving farmers the opportunity to grow hemp, you have to have processors. So GenCanna locating here opens up western Kentucky to hemp.”

Hemp was historically used for rope but has many other uses, including clothing and mulch from the fiber; hemp milk and cooking oil from the seeds; and soap and lotions. Other uses include building materials, animal bedding and biofuels.

GenCanna processes and manufactures cannabidiol, or CBD, products. Proponents say CBD, a non-psychoactive compound found in hemp, offers a multitude of health benefits, from relieving pain to taming anxiety.

The company has a Winchester research facility employing about 160 people. It’s starting a manufacturing, packaging and retail operation in Paducah in western Kentucky. GenCanna hopes to finish construction of its Mayfield plant late next year.

Kentucky has been at the forefront of hemp’s comeback. Farmers in the state planted 6,700 acres (2,710 hectares) of hemp in 2018 — more than twice last year’s production, according to Kentucky’s agriculture department. More than 70 Kentucky processors are turning the plant into products. The value of Kentucky’s 2017 hemp crop was about $17 million.

More than 1,000 Kentucky farmers have applied to grow hemp in 2019 — a 400 percent increase from applications for the 2018 production year, Kentucky Agriculture Commissioner Ryan Quarles said recently.

GenCanna contracted with about a dozen Kentucky farmers in 2018 to grow hemp on 900-plus acres (364 hectares). It hopes to contract with more than 50 Kentucky farmers in 2019, with a goal of more than 10,000 acres (4,047 hectares) of hemp production, Bevan said.

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