Buying Back Hemp Biomass
Buying back hemp biomass is normal part of the industry, but EcoGen is in a position where it needs to buy more hemp despite the COVID pandemic.
Buying back excess hemp grown from specialty seeds isn’t a unique concept and a quick search on the web will show several companies who promise to do so. EcoGen Laboratories in Colorado says their way of buying back biomass is different from the other guys. “These companies aren’t selling finished goods, so if they’re buying hemp back from farmers, they’re brokering the buyback for resale and if the market takes a dip, you might suddenly find their phone numbers aren’t working,” says Andrei McQuillan, EcoGen’s Chief Marketing Officer. “We buy back unsold hemp biomass at fair market value from farmers who purchase their seeds from our company,” says CEO Alexis Korybut. While they farm 300 acres in Grand Junction, CO., themselves and another 500 acres with Colorado farmer partners, as the leading vertically integrated manufacturer of high-quality hemp genetics, hemp-derived specialty ingredients, and finished products in North America, they need even more sourcing.
“We don’t grow enough for our own use, so we need partners, farmers who buy genetics from us. The most natural place for them to sell back excess would be to us, so it’s a ‘help-us/help-you’ type of circle. We need the farmers and the farmers need us to buy back overage. If it was grown with our seeds to our protocol and meets our standards, we’ll pay fair market and arrange for shipping back to our facility for processing,” says Korybut.
“Hemp is new to many farmers and a variety of market variables continue to be unknowns as the industry grows. Adding a layer of financial certainty for farmers can be invaluable during these trying times.
“We’re getting good traction from this program,” he adds. “Marginally, it’s taking some folks who were thinking they might now grow to saying ‘Wow, maybe I will grow if I have this option’.”
Founded in 2016 and using proprietary processes and formulations, EcoGen is the first seed-to-sale CBD manufacturer of pure CBD raw materials and finished products and has developed a range of customized formulations for a wide array of industries.
Billing itself as a leading producer of a variety of CBD extracts and a leader in hemp seed and genetics research, EcoGen Labs, as an industrial-scale producer of products with up to 99.9 percent concentration of CBD, employs 125 engineers and scientists to maintain a high level of consistency.
“Going into our fourth season, as a company, we’re way ahead of the majority of hemp producers across the U.S.,” says McQuillan.
“Sustainable agriculture is our passion and our founding team is comprised of multiple generations of successful farmers who understand the importance of taking care of the earth, hence organic practices for consistent products while respecting the environment.”
Unless you’re pretty sure of your crystal ball, predictions are dicey and Korybut emphasizes his response is conjecture, but in looking forward to the 2020 crop year, he says: “It’s setting up to be a challenging one impacted by the COVID-19 epidemic that changed everything and nobody really knows at this point. But if we speculate… last year saw a downturn in prices, so I expect this year we will see a lot of marginal folks exiting the industry along with some consolidations.
“People mistakenly assume the market is bigger than it truly is even though it continues to grow dramatically every year as demand goes up. But the present market got swamped and supply overwhelmed demand. Hopefully the industry will find the proper equilibrium between need and supply. But while it does, we’re going to see quite a bit of shakeout in 2020, so I’d call it a ‘challenging’ year all the way around, for farmers, processors, brands, as we work toward an industry growth reset in 2021. It was inevitable.”
In the interim, EcoGen will move along a steady course as the new normal works itself out. “Most of our competitors aren’t processors as well, so I don’t see how other smaller entities can have a credible buyback program because they’re just buying it back and brokering it off somewhere. As the largest processor we know of, we’ll actually use the additional hemp biomass because our appetite is enormous.”