In this initial column, please allow me to take a little time to introduce myself. I’m Gary Hubbell, a ranch real estate broker based in Hotchkiss. When we lived in Carbondale, I wrote a monthly column for The Aspen Times for over 20 years, and since we relocated to the North Fork Valley in 2007, I’ve always missed writing a regular column. This column will focus on farm and ranch real estate and issues relating to Western Colorado agricultural, lifestyle and government. I love writing about politics, land, people and businesses.
Only a few years ago, the idea of cultivating hemp on Colorado farms was a novelty. Flash forward to today, and fields in Montrose and Delta counties that once grew corn, pinto beans, onions and hay are blanketed with hemp, a close cousin to marijuana, but without the psychoactive attributes of pot. A “green wave” has swept over the Uncompahgre and Gunnison River valleys, as growers seek to capitalize on an emerging market.
In 2018, I got swept up in it myself. My son, Jake Hubbell, is a broker in my office, and one of his first real estate clients was this guy out of Texas who was seeking to buy farmland. By golly, Jake located a couple hundred acres for the guy, and out of those purchases the Blue Dog Hemp empire was launched in the Shavano Valley west of Montrose. As Jake started telling me about the crop and how interesting and potentially lucrative it was, I looked at the rutted, bumpy hayfields at our ranch in Crawford, compacted from decades of grazing by horses and cattle, and thought, “Why not! At the very least, I can get my fields re-plowed and smoothed out.” And so began our venture into hemp, as we grew 55 acres last year and about 30 acres this year.
As silly as it seems, “ditch weed” was until recently classified as a Schedule 1 narcotic by the Drug Enforcement Administration, which is defined as having high abuse potential, no medical use and severe safety concerns. Americans are finding that this definition is patently false, as many people turn to hemp for the medical and health benefits that they are finding in CBD hemp tinctures, salves and pills. For those who don’t know, “CBD” stands for cannabidiol. The human body has many receptors for CBD, and we respond positively to its ability to reduce inflammation and fight disease. At this point, there are hundreds of new studies underway, but anecdotal evidence is rapidly emerging from people who have found CBD to be a very effective remedy for Parkinson’s disease, epilepsy, seizures, cancer, Type 1 diabetes, arthritis, and chronic pain and inflammation. In fact, the current opioid epidemic could be alleviated by CBD use.
Whether you like Colorado’s liberal marijuana laws or not, a by-product of those laws was making hemp production legal, which had a profound effect in our state. Since Colorado legalized hemp production in 2013, the state has a big head start over other states that have just recently legalized hemp.
There are really two distinct types of hemp: industrial hemp, which can be used for the manufacture of fiber, paper, paint, clothing, high-protein grain and a host of other products. Industrial hemp is planted in thick stands and it grows very tall, with a seed head of grain at the top. The other type of hemp is grown for its CBD oil, which is refined for medicinal use. The fields that you see planted locally are almost all grown for CBD production, as the plants are bushy and kept distinct from one another.
The goal with these grows is to produce all female plants, as only females produce CBD oil in any quantity, and once they’re fertilized by male pollen, they cease to produce CBD. As refiners offer little three-ounce bottles of CBD tincture for $120, there is an obviously high profit potential in the crop. However, when contrasted with the cost of prescription medications, a three-ounce bottle can last a month or more, which makes it cost-effective even at that price.
Big Pharma has realized that they are seriously behind the curve in exploring new uses for CBD, as mom-and-pop entrepreneurs have already heavily penetrated the market while the big drug companies have been caught flat-footed. That is changing rapidly as thousands of people rush into the space. Trust me, there is some very serious money targeted at hemp production. At last spring’s Northern Colorado Hemp Expo in Denver, the convention room was jam-packed with 15,000 people of all walks of life, all interested in the booming new economy of hemp.
Locally, it has infused incredible new energy into the agricultural scene in Western Colorado. Any suitable field with good soils, a reliable source of irrigation water, nearby power supply and good sunshine could be targeted for hemp. It has caused something of a land rush, as prices for premium farm ground jumped from around $8,000 an acre to $10,000 an acre. The cost of the land can be only the down payment on a good crop, as female seedlings routinely bring $4-$5 each at a planting density of 1,700-3,500 seedlings per acre. Expensive drip irrigation systems with plastic mulch, requisite water reservoirs, pumps, sand media filters and buried water lines can bring the production cost over $10,000 an acre to grow a crop. However, growers are hoping for returns of $30,000 an acre or more, so the incentive is obvious when farmers are used to $300 or so per acre for traditional crops. The 2018 Farm Bill, signed by Donald Trump, removed hemp as a Schedule 1 narcotic and made it federally legal to grow, with the states given the mandate to develop their own regulations.
Like any “gold rush” scenario, there are many stories of liars, cheats and thieves in the hemp world. There are massive disappointments and those who literally strike it rich. There are those who say the market has already peaked and the big money is gone. Pretty soon, they say, it will be like any other crop, paying the same yields. This may be true as big farm states like Iowa, Texas, California and Missouri legalize hemp production. However, the knowledge and expertise gained through six years of Colorado production gives us a definite edge as producers. An entire industry has sprung up in Colorado, as drying barns, processors, and distributors have invested millions in Colorado hemp production. There’s no doubt about it, there has been a huge cash infusion into the local economy, as hemp growers have bought new tractors, implements, fertilizer and irrigation pumps. They’ve modernized farm properties to make them more productive, and they’ve invested in our communities.
Like any good farm and ranch broker, I’ve brokered several hemp properties over the past couple of years. I’ve gotten to know the principals, and they tell me that we’re only at the beginning of the Green Wave. When Gatorade is looking at producing a CBD-infused drink; when Kraft is studying how to bring CBD hemp into their product lines; when Walgreen’s and CVS pharmacies are introducing entire lines of CBD-infused botanicals; when Coca-Cola is contemplating a CBD-infused bottled water — hemp is going big and mainstream, and farmers will be well compensated at least for the near term. We haven’t even explored the incredible potential of hemp as a source of fiber for paper, clothing and industrial materials. (There’s a reason the word “canvas” sounds much like “cannabis,” as sailing ships used hemp sails.) It’s said that a hemp farmer can produce just as much fiber in one acre in a year as a tree plantation can produce in 20 years. My prediction is that hemp will remain an important part of our farm economy for years to come.
Gary Hubbell is an accredited land consultant with United Country Colorado Brokers & Auctioneers.