PP 44 | Automating Hemp

 

With hemp being completely legal already, some farmers are taking a large acreage of their lands and flipping to hemp. Today, Tony Frischknecht talks with Reid Vander Veen, the Director of Marketing at Hemp Processing Solutions based in Harrisburg, South Dakota. Reid talks about automating hemp, building the industrial side of the hemp processing, the measures they are taking, and how it affects other crops and even cattle. He introduced the BudRubber and BioMaster machines, both breaking down the plant and separating the fibrous material from the flower material, but following different processes. He also talks about the current situation of the hemp industry, as well as his predictions for the hemp building materials.

Listen to the podcast here:

Automating Your Hemp Process With Reid Vander Veen

Thank you for joining me. It is awesome to be here with you. I enjoy bringing some interesting things for you to learn and some quality stuff. I’ve got a great guest. Given all that has happened, there still needs to be some growth that takes place at the start of the season in all agriculture. One of the big ones is hemp. Hemp is changing quickly as cannabis is. It’s a few years behind, although, there’s quite a bit of action happening in the field because these farmers are taking large acreages and flipping from what they had before, such as corn, wheat, or something else in there going big into hemp.

In 2019, it was extremely exciting because we had passed the farm bill for 2018. Trump signed that in and made hemp completely legal, which is incredible. Us, in the cannabis world, we’ll see a lot of excitement coming to that. Once we get legalization, it will change so much. With hemp coming on board and people treating it as a real legitimate business, especially the farmers. The most important side of the process is the farmers taking this seriously. In 2019, thousands of farmers jumped on the bandwagon of the legalization of hemp. However, there are some major gaps, but processing is a huge one. Another thing is equipment and finding the right equipment to do your farming is extremely challenging because there are not a lot of people producing commercial size equipment. It’s extremely important not only for saving you time, money, labor, and all these things that cost the farmer hundreds of thousands of dollars every season.

Being able to eliminate and streamline that is huge to the bottom line. It makes it profitable. It allows the farmer to reinvest for his next crop. There were a lot of people that struggle out in the industry in 2020. Some first-timers took it on the chin. Some are still sitting on their crop, but they’ve already spent that money to get that processing done. This is why I have my next guests on. I’m super excited to have him here. He is building the industrial side of the hemp processing, which is exciting. I’ve got Reid Vander Veen being here with me from Hemp Processing Solutions. Reid, thanks for being on. How are you doing?

I’m excited to be here and chat with you again, Tony.

You have been building some amazing industrial style type products. I talk to my audience about the building of new companies and the creation of them, and the work that’s put into it. You’ve got a few years into this, but you also have another side of your company that has a lot of similarities. You deal with a lot of brewing as well.

We do a lot of anything that’s reducing material down or the particle size of different products. One of the technologies that you see in our BioMaster product, which is a machine that breaks down the hemp plant. There’s some grinding technology in there that we also use in more of a traditional ag setting. Food and beverage industry, ag, livestock, grinding grain for animal feed, grinding malt and barley for the brewing industry, the craft brewing, and craft distilling industry. We’ve got our hands in a couple of different things, brewing, ag, ethanol, and hemp.

The reason why I went into that and didn’t let you share your story a little bit, everybody’s shifting. It’s super exciting. People are moving along and things are happening quickly. I’ve talked to several companies and they are making hand sanitizer. People are shifting to pay the bills, stay alive, and move forward. I see this in our industry so much in cannabis and hemp because we have to bob and weave to survive. That’s where the strength comes from. Before I get too far into your products and stuff, I want to give you an opportunity for people to understand a little bit about you and your background over the last couple of years. Would you share that?

We are a company called Hemp Processing Solutions. We’re based out of the middle of nowhere, South Dakota, which is an interesting state to be in the hemp space. We have the claim of being one of the last states to set up legislation that allows for the growing and processing of the cannabis plant. That’s been a challenge for us. We’ve had to navigate that and when we’ve gotten creative with a bunch of different things to make that happen. We’ve been making agricultural and industrial agricultural equipment for many years. We spent a lot of time in the traditional ag space, which wouldn’t be a shock to anybody that knows anything about South Dakota. We have cattle and cornfields and that’s basically what we got.

We’ve got a couple of other things. We know a thing or two when it comes down to particle size reduction, grinding equipment, and making very industrial-scale commercial farm grade equipment. We are accustomed to understanding that, the rigors and demands that go into developing a product that can stand up to abuse year after year. The way farmers use it depends on this stuff for their livelihood and the equipment. That’s what we’re proud to make. We’ve got a couple of different machines that are specifically set up for the hemp processing industry. We’ve got one called the BudRubber and BioMaster. Both do essentially the same thing in terms of breaking down the plant, separating the fibrous material from the flower material, but different processes and choosing those machines are largely dictated on what your harvesting technique is.

If you have maybe a whole plant that you’re harvesting, your field drying, or hand drying, something like that, you’re going to hopefully use the BudRubber to break that material down. If you’re doing more of a chopped or a combined type of harvesting process, you’re going to use the BioMaster. It has different types of technology, but the same basic premise of separating the fiber and flower material out. We got into the hemp space years ago when we first started dabbling. If you want the origin story, we got pulled in essentially. We followed one of our strategic partners in the ag space who said, “We’re going to try this hemp thing. We’ve got some processes, technology, hardware, and software that we think are going to work well for the hemp space. Are you willing to help us out? We need some way to break down this plant material.”

It seems you had the willingness and ability, but got led there by somebody else because it was a little unknown to you.

That’s the case. It was a big discovery. We’re a small business. We’ve got 30 to 40 employees, but we’re a bunch of curious people. We like to figure out what’s next. We like to tinker. We have a full-time in-house R&D staff that’s constantly working on stuff, which is pretty impressive for an organization. For our size, when you’ve got multiple employees dedicated full-time to research and development and innovation. That’s our nature. We’re curious. We’ve got great partners. When they said, “Here’s an opportunity,” we took a look at the market like everybody else did and said, “We’re on the front end of this hemp thing. There’s likely an opportunity to be had. Let’s figure out what our play is and see if we can get involved somehow and help contribute.” That’s how we got started. That first machine was the BioMaster. It was an early version, a prototype version but that led to the BioMaster machine that I referenced.

You were creating a prototype or something like this in an industrial style. When you go into creating something industrial, you’ve got to make some that people depend on. Something that is going to go through the long haul and the rigor beatings that farm equipment has to take. When you look at some of the other products that are out in the industry, there are not a lot of them. Do you think that they are building this industrial mindset?

South Dakota is one of the last states to set up legislation that allows for the growing and processing of the cannabis plant. Click To Tweet

Someone depends on the scale of the user. You could consider an industrial scale, potentially to have 3 or 4 of these. If you’ve got multiple lines and you’ve got a handful of people that can do that versus a manual hand separation process, those 3 or 4 little machines are probably going to feel life-changing to an organization like that. From a mass production standpoint, when we get this industry caught up to where we think it needs to go and where we see it going, we are going to need equipment that isn’t terribly far off from what the other more traditional ag side uses. It’s heavy equipment that can take temperatures, weather, and massive amounts of throughput in a mostly automated fashion where there are not a lot of manual processes involved. That’s what we’re shooting for. Out of the gate, we said, “That’s our space. We know industrial, farming, and big scale farming.” It was a new space, but it was a somewhat natural organic shift to say, “How can we apply our experience, technology, capabilities, production staff, and our engineering team into a new space?”

The reason I have you on here is because of the BudRubber and the BioMaster. We’ll talk a little bit more about that, but I do want to point out the fact that it sounds like you feel we have a long way to go in the designing and building some of these processing machines. Is that correct?

I think so. What’s fun about this industry is it’s a great thing and the not so awesome thing. At the same time, there’s not a library of knowledge out there, yet, at least not on a massive scale. We’ve got some individual data points. We’ve got a couple of growing seasons. Most states and regions have maybe one or two growing seasons under their belt. There are a handful of people that everybody knows that figured out some processes or had some technology that worked. He could do it. He figured it out. We’ve got to figure out how to mimic and duplicate that. There are other states like ours that are getting started. We were working on passing legislation. I spent probably too much time in our State Capitol chatting with the legislators there. We did get legislation passed, but we now have to get it implemented. In light of the whole COVID-19 stuff, there’s been a slow roll of that. We set up the South Dakota Industrial Hemp Association. We had our first board meeting for that, which is exciting. We’re working on developing that program. By and large, we’re in the early stages of bringing this industry back to life. We have to remember that this isn’t entirely new.

People think it is new.

For a lot of people, it is new. We weren’t alive, probably when hemp was being grown actively in our country, but there are a lot of people that were and can remember that. I have a couple of good friends that said, “My grandpa or my dad has talked about when they made some of these laws to make this stuff illegal.” We’re bringing it back to life. We’re trying to do so in a modern way. In this world, things move fast. When somebody figures out how to produce it, it’s going to require a massive scale to do it well. On top of all of that, just normal how fast and how crazy things are, we can’t lose sight of the fact that the product we’re producing, the plant that we’re growing has more documented uses than any other plant on our planet. Whether it’s going into a consumable of some sorts, soaps, lotions, shampoos, or something you eat, whether it’s going into pet supplies, pet foods, or paper products. I don’t need to educate your audience on that.

How do you see it changing our world over the next few years?

My prediction is you’re going to start to see a lot more of the building materials are going to take off. The fibrous side of the plant that has been almost considered a byproduct and still is in some ways and some areas are going to take off. The cannabinoids, CBD, CBN, CBG, they’re still going to be present. They’re only going to grow as my prediction. It’s one guy’s opinion, but we’re going to see two significant things happen. If you want me to get down to brass tacks on a prediction, here’s where I would go. I would say CBD and those types of oils are going to become ibuprofen and aspirin. Everybody’s going to have it. It’s going to be in their medicine cabinets. It’s going to be easy to obtain because the research is going to come around. It’s going to follow. There’s some early stuff that we’re seeing, where this is showing a lot of promising results.

It’s going to be like Advil. It’s going to be like ibuprofen. Everybody’s going to have some form of CBD in their house to treat a various array of ailments. On the industrial side, you’re going to start to see a ton of this stuff going into car products and in the building materials. It will be interesting to see what happens in animals. I’m putting my ag hat on, but in terms of food and bedding, I’ve talked to some cattle farmers that are interested in terms of, “Can I feed this thing? Can I bail this stuff, dry it out, and pellet it? Can I feed it to my cattle?” From a habitat standpoint and wildlife, people don’t talk about this often. If agriculture is the primary driver of the South Dakota economy, hunting is second. I am 100% hands down. In October, November, and September, that time frame, all you see is bright orange camouflage and our state bird is the Ring-necked Pheasant.

You have some amazing pheasant hunting there.

It’s funny because not only do we allow you to shoot the state bird in South Dakota, we do say, “Come here and shoot our state bird.” If you think about from a habitat standpoint what growing hemp can do, it’s not only covered, but it’s also a food source for these birds that we rely on tremendously for our economy. It’s baffling that we’re not doing more with this. There aren’t more advocacy groups pushing for it. If you start laying out some of these facts, it’s a forehead slap moment. It’s like, “What in the world? What are we doing?”

The number of farmers I talked to that has grown this in their fields here in Eastern Colorado, they said they’ll do either private hunting. It’s incredible the amount of food that is left for these birds to come in and he goes, “My hunting has been amazing.” I’m right there with you. It’s going to change our world, especially with all the products that we’re looking at. Oil issues are happening with depression of the barrel prices because nobody’s using oil, which is going to amount to some interesting stuff. The hemp product can take all kinds of shapes for even automobiles and all the plastic around them that can be used in it.

It’s a great time to be in, especially when you’re in a place of, “We’re going to build some industrial stuff to help out the farmers.” The farmers have a hard enough time as it is when it comes down to simply growing the product at the start and harvesting it. The people that have been out there that have done this, they had a couple of them start taking advantage of your product. What are you seeing coming into this in 2021? Are people awakening that their labor costs were extremely high in 2019 because they didn’t have the right products? Are people still in like, “We’ve got to get this planted and we’ll figure out the rest?”

In 2019, we saw a lot of the latter. We saw a ton of people who were in a rush to get seeds in the ground. We’re hoping that the commercialization of the industry, the processing side would materialize over the course of the summer and the growing season. Frankly, it didn’t happen. There were some people that started developing some harvesting technology. Some people, like ourselves, started developing that upstream or preprocessing equipment. There are facilities either going up or being retrofitted to do the downstream processing, but there was a glut on the amount of material plant. Biomass being produced, combined with a small number of processors, who not only were accepting it but knew what they were doing with it. Also, they knew that because of how much access they had and how much people were hurting, they were being able to be super-picky and super choosy. They didn’t have to worry about paying a premium for this product because they could get it from somebody else down the street for cheaper. There are a lot of different things in the works.

PP 44 | Automating Hemp

Automating Hemp: Choosing those machines are largely dictated on what your harvesting technique is.

What’s the percentage you think of farmers that are already out of business on hemp?

I would hesitate to even make a wager. I’ve heard of a number of people that we’ve talked to that tried it in 2019. They’re refusing to go and do it again because they had an early frost or something like many of the western states did. They said, “I wasn’t prepared. I’m not capable. We don’t have the system and the infrastructure.” They’re locally on their farm or in their region to handle it. There’s a number of those people. We’ve all heard the horror stories about people that leveraged themselves, their farm, or their family too much without a great harvest and post-harvest plan. We’re seeing anyway a lot more hesitancy to cowboy into it in 2020 that it is says there is a legitimate.

I like that term cowboy into it.

People are realizing that there is real money to be made here, but to the industry, the plant and everything about it is vastly different from the other commodities that we’re typically growing fruits and nuts. Traditional ag such as corn, soybean, and wheat. The plant is different. Processing is different. Their equipment required is different. What we’re seeing is a lot of people and there is still an appetite. We’re having a lot of conversations with people that are getting into it that want to start, which is still exciting to see. Everybody’s eyes have been opened to say, “We’ve got to have a more comprehensive plan in place. Before we put seeds in the ground, we’re going to have purchase contracts. We’re going to try and figure out some options for insurance. We’re going to see how we can work as a cooperative collective with some other local farmers to offload some of the costs of this equipment that we’re going to need to use. We’re going to try and find facilities that we can rely on, put some equipment in or store some plants in or what have you.

It’s amazing to me that these farmers grow annually. I’m sure some did well, but a lot of them learned some hard lessons because they’re not familiar with this crop. It would seem that they would know, like, “I know that this is going to be a completely different thing, but why would I bet the farm?” Everybody wants to hit the home run. Everybody wants to knock it out of the park the first time. It’s been my experience that it takes a handful of harvests to understand your processes all the way through. People think they can do one season, pay for all their bills, have some money in hand and be ready for the next year. I get confused about why that’s not more understood.

There are going to be outliers in everything like businesses, life, entrepreneurship, farming, and people. There are outliers regardless where you’re going to look at it. There are those people. There are a couple of stories. We’ve heard plenty of them. Our customers, a few of them, there is baffling unbelievable successes.

What’s the best one you’ve heard from 2019?

We had a customer that dealt with some unfortunate weather. Their plants didn’t turn out the way they were hoping. They didn’t grow quite to the size that they were hoping, but rather than harvest them and extract the oils out of the plants that they were planning, they found a buyer locally that wanted to purchase the plants and use them for smokable. The farmer sold the plants as they stood in the ground, unharvested for gobs of unbelievable amounts of money. I hesitate to even throw out figures because somebody’s going to quote it and reference it, but they were making a lot of money.

It’s interesting you bring that up. I was at a conference down in New Orleans. I smoked my first hemp cigarette. There’s no THC in it. It was the only hemp.

Doesn’t it feel funny that we still have to give that disclaimer though? I’m with you.

It is what it is. It tasted similar to tobacco. I smoke cigars, but I don’t smoke cigarettes. You didn’t have that harshness that you get from cigarettes. It was incredible. It makes a lot of sense to me. A great entrepreneurial lesson is you see those people that are out there that are like, “What am I going to do? They’re not getting to that size.” They meet somebody in a network and all of a sudden, he doesn’t even have to touch the plants. It’s like, “Come and get them. Do whatever you want with them.” That talks about a big win.

It was jaw-dropping what they had. The type of figure that even those of us here in the Midwest that are around some pretty sizable farming operational once in a while. The amount of money they were making on a per-acre basis compared to what it takes us to make money on corn, soybeans, wheat, or something, there’s a good reason why when you talk about that stuff that some people are like, “We’ve got to do that.”

This is what draws everybody in.

There's a lot of steps in the hemp process that people got to figure out, and that's what caught a lot of people off guard. Click To Tweet

There is even a remote possibility. Even if I get half of that, it’s such an outlier to be that fortunate and to be in the right place and the right time. The fact of the matter is the vast majority of the rest of us still have to figure out a way to get the stuff in the ground, get the right climate for the right seed variety, figure out a way to pull a plant basis. We’re going to combine and chop it somehow. We have to cool it. We have to dry it. We have to start the separation process. We’ve got to find out an extractor. If we’re going that route, you’ve got to find a fiber buyer and there are not a ton of those. There are a lot of steps in here that people got to figure it out. That’s what caught a lot of people off guard.

People were expecting, “I’ve got to grow and I’ll sell it from there. They then can deal with it after that.” The big hole is the processing, which I love having you on because of this. You have the BudRubber and the BioMaster. Those two products are breaking apart the plant, separating it piece by piece. Do these two products work together or are they two different products?

All good answers are it depends or it’s both. We’ve got multiple customers that are using just one or the other machine. We have a few customers that are using them in tandem. We have them set up in tandem at a facility there in Colorado. Even though they’re bringing in combined material, chopped material, they’re running it through the BudRubber beforehand. The BudRubber, for those that don’t know, is designed for whole hemp whole plant processing. They’re running chop material through that because the mechanism for that is effective that they’re able to pull out 75% to 80% of the fiber material in that first pass through the BudRubber. That thing can do massive amounts. We’re talking to up to 5,000 pounds an hour. We’ve had customers that have done twice that even. We rate the machine at 2,000 to 5,000 pounds an hour pretty safely. Especially with that chopped material. It wasn’t designed for that, but the separation process is such that it works effectively that we’re pulling off that much fiber material. They then take all of that flowery biomass. It still has a little bit of fiber in it and they’re running that through the BioMaster.

How much of the plant are you able to use after running it through this process? Are we talking 90% or 100% of the plant you’re able to separate out for different products?

Most of the plant is usable. It depends a little bit on the machine configuration, the plant variety, the condition of the plant going in, how dry is it? Is it super dry and brittle? Is it super wet, floppy, and flexible like this plant can be sometimes? You have to adjust the machine, your speeds, and your contact rates and different things like that. The process takes the entire plant. You get a batch of fiber material out of one end and flower material out of the other. There’s not a lot of loss inside there. There may be a little bit, but at the end of the day, you’re going to have clean flower and clean fiber. It’s a matter of what do you do with it from there. You’re going to get some overlap here and there. You might have some nice fine flower, get in your fiber bag. There’s going to be a few sticks of fiber that got through and then they landed in the good quality biomass. That’s going to happen a little bit here and there. It requires some fine-tuning and being used to working with the machine, with the equipment, and with the plant.

You could take and learn that over a season or two, but this is all part of turning and making it efficient for whatever you need to produce.

Downstream, especially the guys that are doing the extraction, enjoy having biomass that’s come through the BioMaster, for example. Not only is it separating fiber and flower, but there’s a consistency component in that machine as well that says, “We’re going to get all of your biomass to approximately the same microns super consistent with the output of this.” All the guys that are doing extraction downstream can suddenly start to fine-tune their systems and their processes, even more during their speeds and temperatures because there’s not the fluctuation. There’s not the variety of the biomass going in.

It seems to me that when people who you’re working with, the processor, the extractor at the end of the process, they’re like, “We’ll totally take your processed hemp. Just bring it to us.” It is easy to work with.

Some of them, even rather than relying on a farmer has this separation equipment on-site, they’re putting a BioMaster on the front end of their entire process. We’ll take whatever variety of biomass you can produce. You can bring to us as long as it’s inside these specifications. First pass, everything coming in is going through the BioMaster because all the downstream stuff gets significantly easier to operate.

Whether or not they get it exactly from somebody that’s used your machine, the extractor has got its own machine and he’s like, “It doesn’t matter. You’ve got to be within these parameters and we’ll run it. We’re going to charge you for it, but we’ll still run it.” In the end, it makes it easier for them to get the most out of it because in growing and extraction into the line, you want the highest yields all the way through so that you can get that top dollar for it when it comes down to it.

It’s all about efficiency for the extractors for sure.

Reid, I appreciate you being on. You brought up some fascinating points. I admire the industrial side you are taking to this. I didn’t mention this before, but Reid and I met at the MJBizCon here in Las Vegas. Walking around that hall and seeing all the different products, especially on the hemp side, there were few that I saw there that took the industrial mindset, like, “We’re going to make this efficient. We’re going to make this built for what a farmer needs and what they need to produce long-term.” I appreciate you and your company thinking about that. Your many years of knowledge is extremely helpful because there are people that are winging it in their inventors, which can come up with some great ideas. Taking it and turning it into a true industrial product is what I believe the industry is lacking. It’s slowing the growth of the hemp industry, especially when there are people across upon and Europe that have been dealing with hemp for a while. For us, as a country to get on top of things and get the ball, we’ve got to start thinking about mass production. Thank you so much for being here. If people want to get in touch with you, what’s your website? Where can they find you?

Our website is Hemp-ProcessingSolutions.com. We go by HPS a lot. Any of the social media channels, if you search for Hemp Processing Solutions, you’ll find us there too.

PP 44 | Automating Hemp

Automating Hemp: People realize that there is real money to be made here, but the plant is vastly different from the other commodities that are typically grown.

 

I hope my readers enjoyed this episode as much as I did. There are a lot of great tidbits from it. If you are in learning a little bit more, you can also reach out to me at PlantProblem.com and leave your questions or comments there. We love to hear reviews. Please take a few seconds of your time. We’d love to hear what your feedback is and what you want to learn more. If you’re excited about a certain episode, let us know and I can dig deeper into that. Reid, thanks for joining us. I look forward to seeing your new products. I’d love to touch base when you guys start building something else.

It sounds great, Tony. I had a lot of fun being here.

I had a great interview with Reid Vander Veen. What do we talk about that was exciting in this episode?

We had a great conversation and it went by way too fast. We talked a lot about the state of the hemp industry. We talked about more specifically the industrial side of the equipment that’s involved in the hemp industry. Even took a couple of lessons from what we can learn from traditional ag and how we can apply that to the hemp space.

Reid, it was awesome hanging out with you.

Important Links:

About Reid Vander Veen

PP 44 | Automating HempReid Vander Veen is the Director of Marketing for Hemp Processing Solutions based in Harrisburg, SD. HPS manufacturers industrial-grade agricultural equipment specifically designed for processing and harvesting hemp. Reid obtained his Master’s Degree from USF and now also serves there as an adjunct professor. He is also an active writer, having published over 300 articles in various print and digital publications.

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