Chinook looking to turn over a new leaf with hemp cooperative

Despite uncertainty in the agricultural market meaning many Montana producers face an economic crisis, with the passage of the Farm Bill, a new cash crop has some Blaine County producers looking to revitalize family farms.

"We can impact a community that's been struggling for a while," Chuck Holman, owner of Earth In Hand: Soil Health Services and organizer of Montana Hemp Co-Op said at a meeting of the fledgling cooperative Wednesday night in Chinook. "This could make a difference."

Local producers and people involved in the hemp industry are beginning the process of creating a cooperative centered in Chinook. The cooperative is still in the planning phase, Holman said, but it is planning to do initial processing for producers as well as collect contracts for producers and give members better prices for their crops. He added that the co-op will hopefully be on its feet by fall, but they are waiting for approval by the U.S. Securities and Exchange Commission.

"That's really what we are talking about is the potential of this crop and how we know that the potential is there," Holman said. "... There is no one else doing anything about it and so you get a group of people together, who got the initiative to do something, and you start this co-op. You bring in the equipment to do it, so people have a place to take it."

Green Ridge Biosolutions Chief Operating Officer Sam Belanger of Missoula said no other co-op is looking to accomplish what Montana Hemp Co-Op has in mind. The only other co-op for hemp producers is one in the Bitterroot area, which is a small cannabidiol - CBD - operation, and is restricted to the Bitterroot area and small producers.

Holman said the main focus for the Montana Hemp Co-Op is fiber and seed oil.

Blaine County hemp producer Katon Gerky said that CBD is different from fiber and seed oil.

"The guys who are growing for CBD, that's its own animal," he said.

Seed - also referred to as grain - which is used for food-grade items such as cooking oil and a protein source, is derived from a pollinated female plant. CBD is derived from an unfertilized female plant.

Gerky said producers can harvest the grains from the plant as well as use the stock of the plant for a secondary harvest for fiber, similar to what many producers do with wheat, harvesting the grain and selling the stock as straw.

However, hemp fibers sell at a much higher rate than straw and are in high demand, he added.

Holman said the co-op is looking to utilize the double drop to maximize the profit producers are able to make. He added that the co-op will also be open for the entire state to utilize.

Belanger said the goal is to be able to begin collecting contracts and equipment in the fall, but because of a number of government regulations on hemp still being up in the air, it may not be until next year.

"We want to make sure that all of our ducks are in a row and we are doing it the right way," he said.

It is a frustrating process and takes time to work with some government entities, he said. On the state level, last session, state legislators spoke out in clear support of the hemp industry, he said, adding he has also worked with the Montana Secretary of State Office to see what they need to do.

Holman said that one of the problems is, nationwide, hemp programs were regulated by the Drug Enforcement Administration, but after the 2018 Farm Bill passed in December, the DEA wants to "wash its hands" of it, but no other agencies has a system in place. This issue has also affected farmers' ability to obtain seeds from Canada and Europe.

Gerky said the United States Department of Agriculture is now working on the program.

He added that what is exciting about the industry is the wide range of products that can be made from hemp.

"You are looking at a crop that can disrupt a lot of industries," he said, adding that hemp can be made into plastics, biofuels, clothing or paper.

It is also a superfood. Holman said that two tablespoons of hemp parts are equivalent to the protein in a six-ounce steak.

That is one of the reasons it is important to set up a plant, Blaine County producer Travis Skoyen said.

"If you build it, they will come," he said.

Gerky added that, as a member of the co-op, people are more committed to the success of the company.

"As a member of the co-op, you are buying in, you have an ownership stake in the company, in the cooperative itself," he said.

Holman said that, because the federal and state governments are still working on policies surrounding the hemp industry, it is difficult for producers to contract to processing anywhere in the country, and the transportation of the plants being illegal in some parts of the country. But with the initial processing it can be shipped anywhere regardless because it is no longer in its raw form.

The issue of not having a processing facility in the state of Montana has already impacted the state, he added. Last year, a large majority of the hemp crop that was grown had to be destroyed because no processing facility existed in the state. Another issue is people who are promising contracts to growers do not follow through with the deals, leaving many producers dry, he said.

"We don't want to do that," Holman said. "We want to meet this where people come in and they know they are coming to a company that is sound. We've done our due diligence, we are going to perform for them, because if they know that they will perform for us. We don't want to cause a bunch of doubt within the community, we want to bring something solid to it."

Gerky said that it's that staying-local aspect which helps immensely for area producers.

"The name might be new but the people in it involved with it are local people," he said. "It's not strangers coming in, it's fellow producers that are a part of it that's going to make it happen."

Gerky said the ripple effect from the co-op, once it is fully operational, will impact areas in every direction. He added that this is an opportunity to take small family farms and put them back in the spotlight and give them the security in the agricultural market they need.

Blaine County producer Chris Skoyen said the agricultural market is filled with uncertainty and many producers are suffering, not only in Montana but across the nation.

"The farm industry right now is struggling, there's just no money out there to be had, they're not paying for anything, and with hemp, for now anyways, it's holding its value pretty well," he said.

Belanger said Chinook has a strategic advantage, with a large amount of agricultural land, the railroad and easier transportation of crop. He added that if operations were based in a place, such as Missoula, they would have to truck the majority of the crop.

Chinook also has a great history with the sugar beet processing plant, a major economic player until it closed in the 1950s, and has shown to be a valuable location.

"Chinook has that history, it's strategically located and I think it's primed for something new and fresh," he said.

Holman said that he grew up in Chinook and wants to see it succeed. Producers and those who are working to get the co-op running are still looking at their personal interests but also want to see the community thrive.

"We have proven before, our history is that of industry with our sugar beet factory and oil refinery, we can do this and this is where it's going to be," he said.

People can call Chuck Holman at 406-529-4119 for more information on the cooperative.