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Getting Started in Legal Hemp

Getting Started in Legal Hemp

Since the passing of the Farm Bill in 2018, Mike Leago and the International Hemp Exchange have been getting calls non-stop.

A whole new world is opening up in the industry of legal hemp, and almost everybody is trying to get involved. However most people don’t know the next steps past the application process.

The International Hemp Exchange (iHempX) was around well before legalization. They operated only within states that had legal hemp laws on the books prior to federal legalization, like Oregon and Colorado. This gave Mike and iHempX a big head start in the industry.

Getting Started in Legal Hemp

A lot of people trying to enter the legal hemp industry are farmers already. While a good portion of them are cannabis growers, a just as large portion are your everyday, traditional farmers.

Hemp was a million dollar crop in the early 1900s, and a lot of states have had hemp initiatives enacted specifically to promote farming in the past, despite federal law placing hemp on the banned substances list up until December 2018. Now that legal hemp is becoming widespread with the ability to trade across state lines, farmers are getting back into hemp.

What iHempX does is help these farmers get started. There hasn’t been readily available information on hemp and growing practices due to its legality, which makes iHempX a go-to source for new hemp farmers.

farmers are entering the legal hemp industry

A farmer in his hemp field.

Legal Hemp’s Rising Popularity

According to national figures, there are 275,000 acres of legal hemp currently registered for production. This is compared to a total of 76,000 registered in 2018.

With over 300,000 acres set to be approved for 2019, the industry is set to open up to businesses from all sides. From oils, to fabrics, to CBD tinctures and other products, many small businesses are already getting started.

No big companies have hopped into legal hemp yet, though. As a young, semi-unstable industry, pharmaceutical companies, big health product companies and others are waiting to see how it turns out. Just like legal cannabis, it will most likely be a few years of small-scale growth until big business gets involved.

But the industry already can’t keep up with the supply and demand. There may be thousands of hemp farmers, but there aren’t as many processors or distributors. This has created a bottle neck in the industry where only a select few are growing quickly, while others may still be waiting to have their hemp processed.

Hemp is the New Cash Crop

All hemp is not grown equal, or in the same way. So while some hemp grains or fibers may return only slightly than traditional row crops, but hemp grown for CBD can bring in big money.

While a pound of traditional crop seeds may be $20 a pound, high quality, high CBD hemp can sell for $1 per seed. Now imagine a farmer putting down 2,000 seeds per acre, and producing seeds from their crop. The return compared to traditional crops is exorbitant.

While most people are doing really well with hemp on their farm, not everybody is cashing in. A lot of farmers and growers get caught up just trying to find a seed supplier or a buyer. This could in part be due to the young industry still attracting new business.

As for the businesses that were in operation prior to legalization, they are growing at a rapid rate. They are also diversifying. With so many new options for businesses due to the legality of hemp, new avenues are opening left and right.

This Week’s Episode

In this episode of The Real Dirt Podcast, Chip and Co-Host Justin Jones talk with Mike Leago from the International Hemp Exchange. The first international hemp marketplace, Mike has developed a huge business out of connecting buyers and sellers of all hemp products.

From smokable flower to seeds and biomass, iHempX helps hemp farmers big and small get a strong start in the legal hemp industry. Hear the three dive into the rising trends in the industry, the issues farmers are facing as they try to enter the industry, and where the industry is headed, only on The Real Dirt Podcast!

International Hemp Exchange

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Investing in Cannabis with Louis Han

Investing in Cannabis with Louis Han

When Louis Han started at Arcview Group in 2015, the firm had only invested about $60 million in cannabis ventures. Today, they’ve invested over $250 million.

Louis Han is the Director of Deal Flow for The Arcview Group, an investment firm with a strict focus on investing in cannabis. Financing is one of the most difficult aspects of starting a cannabis business.

Louis and The Arcview Group make it easier.

Investing in Cannabis Businesses

Cannabis is still federally illegal. Banks operate on a federal and state level. This makes most banks averse to the idea of loaning money to new cannabis businesses, even if they operate within a legal cannabis state.

The Arcview Group negates the need for cannabis entrepreneurs to go to banks at all. With its massive investor network, from small scale angel investors to big money opportunists, Arcview can invest in cannabis businesses big and small.

Rising Opportunity, Limited Investors

While the opportunity to start a business in the cannabis industry has never been more possible, investors are still limited, and competition to obtain investment is fierce. This means Arcview can’t just invest in anybody. That’s where Louis Han comes in.

As Director of Deal Flow, an aspect of Louis’ job consists of vetting businesses seeking investment. There’s a lot of people looking for financial assistance, but only the most promising will get to interview with Arcview investors. Louis has seen some of the most successful cannabis businesses go through Arcview.

With his experience running his own cannabis business in California, plus his years with Arcview, Louis has an eye for what a cannabis business needs to obtain investment in the industry.

In This Episode

Louis Han is a cannabis investment expert. In this week’s episode of The Real Dirt, Chip and Louis talk over the phone about investing in cannabis and hemp. From how to formulate your pitch to reading your audience, Louis and Chip go through the full investment process.

In the words of Louis, “Getting involved with an investor is almost like getting married. Especially if they own a large portion of your business, they can have an impact on your financial decisions, and the way your business runs.” 

If you’ve been considering seeking investors for your cannabis business, this an episode you’ll want to hear. And check out Arcview Group’s Investor Meeting happening in Canada on April 23rd!

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