Calexico Chronicle / IV Weekly

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CBD Craze Slowly Builds Momentum in Valley

October 11, 2019

     Although the local growing of industrial hemp dominated discussions at the recent Imperial County Hemp Summit & Expo, the development of hemp-processing facilities to capitalize on the cannabidiol craze is gaining momentum as well.

 

     Specifically, there are both local and non-local efforts under way to get in on the trendy-yet-booming “CBD” market. That involves the procedure of extracting CBD and infusing the non-hallucinogenic compound into a multitude of over-the-counter medications, beauty products, food and beverages, and many other items.

 

     CBD is found in both industrial hemp and its high-inducing cousin, cannabis.

 

     While county Board of Supervisors Chairman Ryan Kelley has been the face of local efforts to embrace the emerging industrial hemp industry and its ancillary sub-industries, fellow Supervisor Ray Castillo has consistently been the torch-carrier for all things CBD. He seems to never leave an opportunity untapped to mention its place as a medicinal miracle and a potential massive moneymaker for the Valley.

 

     “My interest is the medicinal value of hemp … of CBD oils. … Most CBD oil is coming from overseas, from China, the Pacific Rim, India,” Castillo said during an interview Sept. 27 as he stood outside a Hemp Expo exhibit by a CBD retailer from outside the county.

 

     “We’re learning from these countries. Soon, we won’t have to rely on foreign markets anymore. I’m predicting thousands of jobs (specifically tied to CBD extraction and production). It’s not about consumption here in the Valley; it’s about shipping all over the United States,” he said.

 

     Castillo often invokes Walmart’s sale of CBD-infused products as an example of the widespread reach of the hot commodity.

 

     “Everything they put up on the shelf, it sells out overnight,” he said.

 

     He’s a fan of CBD in all its forms, whether used in combination with the psychoactive cannabis compound THC to treat cancer patients or used by itself to relieve pain.

 

     “CBD oils have so many different uses,” Castillo said. 

 

     Brawley grower John Currier would agree. While he and his partner/brother, Andrew Currier, continue to learn the ins and outs of growing industrial hemp through their Badlands Provisions farming operation in Brawley, they also continue to move forward with the development of a CBD-extraction facility. It is being built in Imperial under the name of, appropriately enough, Imperial CBD Extraction.

 

     Classified as a “hemp biomass extraction facility” at 520 W. Aten Road, the Currier brothers have invested about $2.5 million in it and have plans to open Dec. 1.

 

     John Currier characterized the extraction plant as a smaller operation able to process 3,000 pounds of biomass a day. According to the company’s business plan on file with Imperial, the company has a five-year plan “to scale up at a 20 percent (annual) growth rate” with an end goal of processing up to 4,000 pounds of biomass daily.

 

     John Currier said when at full strength the facility will support 10 to 14 full-time jobs.

 

     He added he and his brother also have plans to build another, larger extraction facility in Westmorland. He didn’t provide any further information.

 

     Imperial has two CBD presses being developed in city limits, with both applicants having already obtained conditional-use permits and started building out their projects.

 

     While a healthy amount is known about the Currier brothers’ facility, little information has been made available about the “hemp biomass extraction facility” being developed at 601 E. Barioni Blvd. Its applicants are identified as El Centro native and former professional football player Glenn Cadrez and Kevin Weeks.

 

     No other information was available from the city despite repeated attempts to learn more about the facility.

 

     Another facility in the initial phases of development through Imperial County is by Primordia, a company co-founded by Brawley-area grower Sutton Morgan and Mark Samuels of Escondido.

 

     Also growing industrial hemp, Primordia’s Samuels said his company has invested “millions of dollars” in a “vertically integrated” facility that will process “biomass, dry, mill, grind, extract, and produce THC-free (CBD) distillate or water-soluble powder” on an “industrial scale” outside Brawley city limits.

 

     Samuels was leery to provide any “hard numbers” on investment dollars but did say the facility would employ fewer than 50 to start, eventually scaling up to “hundreds.”

 

     Primordia’s goal, Samuels said, is to build a “solution for Imperial County farmers who need post-processing and extraction” for their hemp crop.

 

     It’s not clear how far along Primordia’s extraction operations are. County Planning and Development Services Director Jim Minnick said Oct. 8 that Primordia is working with the county on the facility, but that it has not turned in its conditional-use permit application yet.

 

     Minnick said the facility is located on Austin Road southwest of Brawley. Although the county has done much work to streamline the permitting process for such facilities, Minnick said Primordia needs to go through a more intensive permitting process due to its CBD-extraction methods, which Minnick said uses the “volatile solvent pentane” in its process.

 

     Minnick added Imperial CBD Extraction will use non-volatile solvents in its extraction methods, which is carbon dioxide. The Cadrez-Weeks facility also will use carbon dioxide, according to information in Imperial Planning Commission documents.

 

     Orange County-based Naturcel Inc. is investing in the Imperial Valley as well, and owner Jae Song of Fullerton said he purchased a 20,000-square-foot warehouse at 920 S. Second St. in El Centro for $1 million. He plans to equip it with about $500,000 in machinery to extract CBD oils and distillates from biomass.

 

     Song didn’t say how many jobs would be created from his facility, but he did say Naturcel would be lab testing and processing around 2,000 pounds of biomass a day. 

 

     “We’ll do the best we can out here,” Song said Sept. 27 from his booth in the expo hall.

 

     Meanwhile, Minnick said Oct. 8 that most of the conversations he and county Agricultural Commissioner Carlos Ortiz were having at the county booths set up at the hemp summit were to discuss permitting and processes with prospective growers. He added there weren’t a lot of people stopping by to speak about CBD facilities.

 

     Everything’s in the “formative stages,” he said. “We’ve been getting a lot of farmers wanting to grow the hemp. As that expands, we’ll see more processing applications.”

 

     By most anyone’s standards, the CBD market in the United States is hot, yet hemp advocate and founder of the California Hemp Association and California Hemp Foundation, Wayne Richman, can see some cracks in the market’s foundation forming.

 

     Richman said the “commoditization” of CBD is happening faster than he expected and he’s already begun to see market values slipping, albeit incrementally.

 

     “CBD seems to be of the most interest, but also the most volatile short term,” Richman said during a Sept. 26 interview. CBD is “no longer all that special. As a nation, we’re likely to overproduce this year.”

 

     Richman added CBD is “still a multi-million-dollar market.”

 

     John Currier sees the slip in market value as well. He said there might be some oversupply of CBD right now as “some isolate material has come down in price in pharmaceuticals only.”

 

     But John Currier said he thinks even a glutted market is a thriving market, comparatively.

 

     Currier said once the U.S. Department of Agriculture and the U.S. Food and Drug Administration regulations come out in the coming months, it will “open the industry a lot.” He added there is a lot of “sitting on the fence right now.”

 

     CBD’s number one fan, Supervisor Castillo, agrees that “the market’s being flooded, but CBD oil use is still minimal compared to the potential. We’re just reaching the tip of the iceberg.”

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