An End to Deforestation Comes into Focus
Meet an entrepreneur helping to ring the death knell for deforestation using a Kentucky cash crop, and an American industry in which smart startup capital is about to flow at levels likely to blow Dot.com and Silicon Valley stats into the void.
We write about American hemp because we're believers.
Our audience is largely composed of believers.
One reader of our article, Hemp Biofuel: No Green Deal Without It, where we submitted to the jury industrial hemp as a crop is capable of bringing our nation to a 100% clean renewable energy sector by 2030... asked a question which gets to the heart of where the industry’s at:
“Why haven’t venture capitalists started funding a zillion startups to grow hemp?”
Best Answer: as the market is so emergent there’s a lack of opportunities, but under the surface the infrastructure is cobbling itself together.
Ink pertaining to hemp in the 2018 Agriculture Improvement Act (often referred to as the Farm Bill) has yet to dry. While publishing these words in late August 2019, only about seven States and eight Native American Tribes have submitted hemp production plans to the USDA. Everyone’s waiting on the USDA to release their official hemp regulations which should hopefully happen within the next 4-6 months (1).
Hence, why acreage is still rather low; growing and expanding at an incredible rate. The following estimates are from Vote Hemp’s U.S. Hemp Crop Reports (2):
2016: 9,770 acres grown.
2017: 25,713 acres grown.
2018: 78,176 acres grown.
2019: 100-200,000 acres grown.
How 2019’s Shaping Up
Getting a grip on the situation in 2019 feels a bit like squeezing tiny remnants of toothpaste onto your brush @ 5 a.m with coffee yet to be consumed.
To say it’s been a wild ride for American agriculture in general would be an understatement...from economic to environmental turmoil galore, to shaky-uncertain ground thanks to ongoing trade war tit-for-tats with China (more on this momentarily). Hemp unfortunately isn’t getting the prescient PR it deserves because of all this madness, but if we turn to Hemp Industry Daily for some revelatory highlights (3):
Acreage will likely see another double or triple-digit expansion across the nation in 2019. Montana and Colorado alone should account for about 70,000 acres planted.
States like Oregon (25% increase), Kentucky (5-fold increase) and Tennessee (12-fold increase) are seeing the amount of licensed growers and applications explode.
Hemp-related applications in Wisconsin have seen a 600% increase year-over-year.
Point being - our hempen green rush is FINALLY (!!!) afoot. And to be specific, we're referring to domestic non-cannabinoid applications: biofuel, food, housing, construction, bioplastics, etc.
Apparently it’s reached the point U.S. Secretary of Agriculture Sonny Perdue felt compelled to chime in with this gem during a Hemp Regulation Webinar held with the USDA in early March 2019:
“What is the market potential of industrial hemp? Farmers in the United States are so productive, they could crash this market before it gets off the ground.”
Crash this market? Very possible, but we’re still in the embryonic stages. Mr. Perdue may have been alluding to the cannabinoid (CBD) market which is being shouted from here to there as “$22 Billion by 2022!” across the Big Cannabis-controlled digital airwaves (4).
How great should it reach those heights in a non-centralized and over-corporatized way!
We adore CBD and its relationship to the human Endocannabinoid System, but consumers should understand deriving Cannabidiol from low-THC cultivars of industrial hemp is just ONE of thousands of uses. Our medically-based CBD-Hemp market isn’t going to crash and fizzle out, but it’s certainly going to normalize as a robust domestic supply lowers prices closer to where they should be, versus where they’ve been hovering since 2014 which was primarily based on international supply chains and insanely strict regulations at home.
Just you wait, the board’s being set up for a historic agricultural revolutionary game to begin in earnest in 2020. From our humble chairs here, the next decade will be prolific for everyday and more opulent American startup investors - 2020 to 2025 focused on building ground floor infrastructure in terms of farming, processing and initial manufacturing; into a 2025 to 2030 market optimization phase where the leading brands take charge along all hempen verticals.
Sheesh, what a perfect segue into the opportunity we’d like to share with you growing out of Kentucky thanks to an inventive and entrepreneurial man by the name of Greg Wilson...
Information on this guy and his company Fibonacci LLC is still somewhat limited, but basically,
“Mr. Wilson and his team are in the advanced stages of establishing America’s first Hempwood factory out in Kentucky, where they’re combining locally-contracted hemp fiber (800 tons already contracted through western KY growers) and innovative adhesives to produce an easily-renewable alternative to oak-like woods used for blocks, boards, flooring, cutting boards, skateboards, etc., for less than the typical costs of oak. The product is 20% harder than oak, but the resource - hemp - grows sustainably 100% faster."
Boom...the beginnings of American innovation harnessing this regal plant so it can make good on one of many ecological promises - to finally displace the wood or forest economy - sparing them to provide immeasurable ecosystem services! Especially keystone species of trees like North American oak, where in the U.S. one-fourth are of conservation concern.
“Data compiled by The Morton Arboretum researchers, published in the latest update of the International Union for Conservation of Nature (IUCN) Red List of Threatened Species. 16 species of oaks, all in southern and western U.S. are now classified as critically endangered, endangered, or vulnerable on the IUCN Red List, with another four inches closer to these positions every year.” (5)
Greg’s a guy with a background in materials science (13 years R & D in oak and bamboo flooring products) who spent nine years helping to build plants in China to supply the world with strand-woven bamboo. Along the way he co-created SmarkOak Tech with Forestry Tasmania and a range of industry partners which utilizes, “small-diameter low-grade logs that would otherwise be converted to wood chips to build an engineered wood in the face of a dramatic reduction in available Australian regrowth forest area.”
They produce a laminated veneer lumber product with exceptional durability and beauty.
Then the American 2018 Farm Bill happened and Greg says the market begged his hearken. He realized he could quasi-replicate this sort of technology in the hemp fiber industry! And thus, his company Fibonacci was born using his own personal savings.
“The market told me to take my process and adapt it to hemp.”
Operations headquarters began in 2014 in his home, to the point his roommate at the time was kicked out to transform the basement into a lab. Seeing immense potential, he scaled by moving into a farm building where he experimented with hemp from Nevada, Pennsylvania, North Carolina and Kentucky.
The Fibonacci Process
They reverse engineered the hardness, density and stability of specific kinds of wood, to mimic them with hemp fiber and protein-based bonding agents.
Rather than tree wood, the company harnesses quick growing U.S.-sourced hemp plant fiber like bamboo. The fiber strands are pressed into logs then processed into boards using sawmill-like techniques for saw and dry boards. Eventually the idea is to move into more finished products as the company grows and their R & D gets more finely tuned.
In an interview with Murray State’s NPR radio station published in Summer 2018, as plans for their 16,500 square feet factory were being laid, Greg explained a bit more about the process (6):
“The final attributes of a plant are based off of mainly the density, so when you have a more dense wood, it’s a harder more stable product. So, because the density of fast-growing plants [like hemp] which are more eco-friendly and typically lower, we have to increase that density. In order to do that, we fill the voids in the cell structure of the plant with adhesives.”
According to the company website FAQs section (7) when this article is being published, these two adhesives Fibonacci uses are:
Phenyl Formaldehyde: a plastic that creates A Level bond for structural use and has proven results in commercial applications for over 80 years. CARB 2 compliant – passes the highest VOC emissions standards in the USA.
Soy-Ad: Soy based adhesive with B-Level bond (same as wood glue) for visual grade applications (flooring/furniture). We are actively improving and testing other NAF adhesives.
Thanks to hempen political grapevines and state-level interests, it didn’t take Greg long to build a relationship with Murray State which was able to provide hemp farmer contracts, a place to store fiber-rich bales for their operation (hilariously dubbed, ‘Mt. Hempmore’), and a connection to the Kentucky Department of Agriculture to apply for a processing license.
And that’s not al (8):
The Kentucky Economic Development Finance Authority approved $300,000 in tax incentives for Fibonacci.
The incentives, based on performance, will allow the company to keep some of its investment by meeting job and investment targets.
The company will also receive no-cost recruitment and job placement services from the Kentucky Skills Network.
Here’s a few widely-circulated quotes from a press release out of Kentucky.gov (9) to better paint a picture of how well-connected the company's become in such a short period given the potential they represent:
Kentucky Governor, Matt Bevin:
“The commonwealth’s burgeoning hemp industry is quickly gaining national attention, and this exciting project will significantly intensify that spotlight. This hardwood alternative opens up new possibilities within the construction and woodworking industries and emphasizes the capabilities hemp has across numerous sectors. We are grateful to Greg Wilson and Fibonacci LLC for locating the United States’ first HempWood operation in Kentucky, and we look forward to the powerful impact the company will have on the region’s economy and the overall industry.”
Kentucky Commissioner of Agriculture, Ryan Quarles:
“When I became commissioner of Agriculture, I said I wanted to make Kentucky the epicenter of the hemp industry in the United States. The fact that Greg Wilson and Fibonacci LLC are choosing Kentucky to locate the first HempWood operation in the United States is a testament to the work we’ve done to strategically position Kentucky’s hemp industry. I thank Fibonacci LLC and look forward to following their story.”
Dean of Murray State’s Hudson School of Agriculture, Dr. Tony Brannon:
“It has been exciting to work with Greg Wilson and his team over the past year to bring this hemp-related manufacturing business to Murray and the Murray State service region...His sustainable work with hemp fiber further helps us build out the growing and processing platform, making Kentucky the epicenter of agricultural hemp. The Center for Agricultural Hemp at Murray State University is pleased to provide continuing assistance with this opportunity.”
Getting goosebumps yet? We sure are! With a smidgen of vision, looking ahead you might picture reform of the traditional wood economy and a 21st century invigoration of American farming and green manufacturing.
Challenges: A Perfect 2020-2025 Stage Investing Example
We see 2020 to 2025 being focused on setting up an initial infrastructure. Fibonacci’s a perfect example. In June 2019, Greg had to assure production wouldn’t be delayed because of recent tariff activity between America and China - their wood press machinery was/is made in China.
As far as DH can tell production was said to have begun this summer - June/July - and Fibonacci was appealing the U.S. International Trade Commission arguing the tariff should be waived because their company’s been unable to locate a domestic manufacturer to make their particular wood press…(10)
How sad there isn't yet a domestic resource for this machine.
“We’ve seen more interest from different parts of downstream manufacturing - ex. Cabinet and flooring sectors - that use wood, domestic wood, as a way of differentiating their product and being innovative in their respective industries.”
Fibonacci’s already got a reported 2 ½ -3 years of soft orders for hemp, along with a rising number of brands looking to license their tech and produce their own versions of HempWood.
Okay investors, this is what we're talking about...across the board whether concerning biofuel, wood alternatives, hemp bioplastics, or clothing...America lacks core machinery at this moment in time. Most farmers and operations are resorting to makeshift foreign-made equipment not designed specifically for their particular approach, whether we’re talking hemp grain production or creating hemp shoes.
Here's another nugget from the interview Greg did with a local Kentucky radio station pertaining to their company outlook:
“All of the IPs [Intellectual Property Rights] are still pending. We set it up so we can do this around the world. So, we set up our U.S. patents as well as our international patents and the plan is to do licensing overseas but do all of our manufacturing in the United States.”
As many Americans have yet to really experience a ‘good well-paying job with benefits', prospects of bringing back a strong green manufacturing base eases frustration...
Our entire domestic hempen supply chain needs investor help at this point, and we really need it to come hopefully from outside the capital control grid of Washington D.C., Wall Street, and Silicon Valley. Ideally America will keep the oligarchical corpocratic mitts off of hemp for the most part, but that’s why DH put this together...
To help spread the word.
Tons of options like Fibonacci are coming down the pike throughout 2020-2025. From there, roughly, it’ll be about each vertical taking dominance and market share (hopefully) from conventional resources because of superior eco-friendly and more sustainable products.
How can one be an American environmentalist and yet ignore hemp now that the crop’s been legalized?
We need money and engineering, as well as the bureaucracy to get obstructive rules and regulations out of the way. We The People can do what we do best in this country in terms of production and innovation.
Fibonacci’s received a reported $3 million in Series C funding, but yes, they’re obviously open and looking for serious funding opportunities to spur growth.
Perhaps you could help?
Thanks for your time.
To the outlandish success of Greg and Fibonacci Hempwood!
1: The National Law Review, “USDA Clarifies Hemp Production, Use, and Transportation” Gene Markin, June 2019.
2: Vote Hemp - U.S. Hemp Crop Report 2016-2018 statistics.
3: Hemp Industry Daily, “Hemp boom: States report dramatic licensing increases for 2019” Laura Drotleff, March 2019.
4: Cision PR Newswire, “CBD Market Growth Larger Than Expected Multi-billion Dollar Industry” Financial News Media, May 2019.
5: American Public Gardens Association, “New Assessment Finds that Nearly One-Fourth of Oak Species in the US are of Conservation Concern” September 2017.
6: WKMS, Murray States NPR Station, “Maryland-Based HempWood Company To Operate Plant In Murray By 2019” Nicole Erwin, Jul 2018.
7: The Hempwood Core Website, www.HempWood.com - FAQs page.
8: Woodworking Network, “$5.8 million Kentucky plant will engineer hemp into wood” Robert Dalheim, March 2019.
9: Kentucky.giv, “Nation’s First HempWood Operation to Locate in Murray” Jack Mazurak, March 2019.
10: Hemp Industry Daily, “Hemp-based wood startup ready to enter market despite US-China trade war tariff” Esteban Fernandez, June 2019.