Village Farms International announced it is partnering with Nature Crisp, a private, large-scale farming operation and part of the Jennings agricultural group of companies, to launch a joint venture for the outdoor cultivation of high-cannabidiol (CBD) hemp and CBD extraction in multiple states throughout the U.S.
Going by the name Village Fields Hemp, the venture will be 65 percent owned by Village Farms, and 35 percent owned by Nature Crisp. Currently Village Fields is scouting locations for its U.S. cultivation, which is expected to reach between 500 and 1,000 acres this year, with planting beginning this spring.
Under the terms of the deal, Village Farms will contribute $15 million to Village Fields to fund startup costs and as working capital. Capital needed for extraction capabilities will be determined and dependent upon future decisions based on location of the hemp production and extraction operations, according to a recent statement announcing the deal.
The venture also has plans to establish extraction capabilities by the end of this year when it will begin the wholesale supply of CBD oil, and launch the production of branded CBD products for “big box” retailers in 2020.
“The world’s great agricultural product brands are built on a foundation of exceptional growing operations that are pioneers in genetic advances and cultural practices to optimize plant traits and yields,” said Michael DeGiglio, chief executive officer, Village Farms. “Partnering with Jennings Group provides a tremendous advantage in this regard as Village Farms pursues its goal to be a premier supplier of branded and private label hemp-derived CBD products to “big box” and grocery retailers in the U.S.”
Genetic Pioneers
Since the legalization of industrial hemp production in the U.S. with the passing of the 2018 Farm Bill, genetics has been at the forefront for companies looking to be strategic leaders in the industry.
“Hemp-derived CBD is a significant opportunity for Village Farms and we are moving aggressively on the heels of the U.S. federal legalization of hemp and hemp-derived CBD products to establish ourselves as a leading vertically integrated supplier to the U.S. market,” said DeGiglio.
Only weeks ago, Benson Hill Bioscience, and California Hemp Corporation, a tech-driven genetic company focused on the hemp seed market, announced a sponsored research agreement with the laboratory of Dr. Edward Charles Brummer at the University of California, Davis.
Benson Hill will be turning its CropOS™ capabilities to industrial hemp. The research program at UC Davis will center upon improving the breeding of cultivars of Cannabis sativa for the desired traits of high cannabidiol (CBD) content, low tetrahydrocannabinol (THC) content, and the ability to thrive in the environmental and soil conditions of Central California and similar regions.
Ultimately, this multi-year program is expected to produce a wide portfolio of commercial field-grown hemp varieties for use in the production of health and wellness products.
For Village Farms, having the Jennings Group as a partner will provide the venture with the power to advance its vertical integration and to pursue its CBD strategy.
“As 10th generation farmers since Gideon (Zanini) Jennings immigrated to South Carolina in 1736, Jennings Group brings deep knowledge in large-scale field agriculture across a vast array of crops, with a proven track record of genetic optimization and innovation,” said DeGiglio. “Over the past several years, they have rapidly become a leading authority on hemp cultivation, renowned for their understanding of the plant and their success applying their cultural and genetic expertise to meaningfully improve CBD content and yield. Moreover, the Jennings Group team brings extensive relationships with the farming community across the U.S., as well as with geneticists, academics and researchers, that will be invaluable to the success of this new business.”
Under Glass
Currently, Village Farms owns and operates 57 million square feet of existing, high-tech greenhouse facilities in West Texas.
Along with its intentions to establish large-scale outdoor hemp farming operations, Village Farms is also monitoring the legalization of the commercial cultivation of hemp and hemp-derived CBD products in the Texas State legislature.
If Village Farms moved to convert these greenhouse operations to the purpose of hemp production, they would represent the largest greenhouse hemp growing footprint in North America.
“We expect a sizable portion of the forecasted US$16 billion in U.S. CBD sales by 2025 to be composed of CBD derived from hemp grown in controlled environments to address the demand for exacting specifications and consistency from the health and wellness and pharmaceutical segments of the market,” said DeGiglio. “We believe we are very well-positioned to address this exciting opportunity.”
-Lynda Kiernan