Pioneers of hemp: Brothers prove major players in new industry

By James Day
Source: democratherald.com


Eric, left, and Seth Crawford look over their crop of Lifter, a strain of industrial hemp. This shipping container of plants is about a week away from harvest and is expected to produce almost 100,000 seeds. Andy Cripe, Mid-Valley Sunday

It’s a cold, gray February morning. We are gathered around a rough-hewn table in a warehouse in southern Polk County. To-do lists, invoices, technical manuals and odd bits of flotsam and jetsam litter the table.

To the right of us is a hydroponic stand of cannabis clones.

We start talking product lines. Seth Crawford turns around and picks up a plastic tub with a screw-on lid and sets it on the table. It looks like one of those containers in which Costco sells mixed nuts.

The jar contains 100,000 cannabis seeds that have been bred, planted and harvested by Crawford and his brother Eric in their new venture Oregon CBD. They sell the seeds for $1 apiece. Yes, that means that was a $100,000 jar of cannabis seeds sitting there in the middle of the table.

Oregon CBD shipped 50 million seeds last year. Yes, that math is similarly simple: That's $50 million dollars in revenue.

Welcome to the brave new world of industrial hemp.

The cannabis seeds that the Crawfords lovingly nurse to the market are 100 percent female to prevent cross-pollination. Their level of THC, the plant's intoxicating ingredient, is below 0.3 percent. You can chew, smoke, fold, spindle or mutilate or inject the seeds and you’ll never get high.

Instead, the seeds are sold to people who plant them and produce a wide range of products. Oils, tinctures, topicals. Products to relieve pain, prevent seizures and treat insomnia and anxiety. Dietary supplements. Products for pets. Psoriasis and eczema treatments.

“It’s the best pain reliever I’ve ever encountered,” Seth said. “I was on the bike this morning and my neck was stiff. I put some on it, and I feel fine.”

Seth, 37, and Eric, 33, came to their new venture with a wide variety of skills that have seamlessly meshed. Although you can easily detect differences. Seth is talkative and expansive. Eric is more laconic and speaks in short, direct sentences. Eric is more of the dig-in-the dirt brother, with muddy boots and a Carhartt jacket. Seth styles sneakers and Patagonia outerwear.

Seth has degrees in English, public policy and sociology, with a doctorate in the latter. Until June 2016 he taught at Oregon State University while also serving as a go-to statewide source for information on marijuana, having extensively studied the economy and sociological aspects of the business in his native region of Southern Oregon.

Eric graduated from OSU with a horticulture degree in which he emphasized environmental science and botany. He worked as a naturalist at Mt. Rainier National Park and owned his own landscape architecture firm in the Eugene area before selling it last year to join forces with Seth.

“We’re just a regular business,” Seth said. “If you are in recreational marijuana you are growing a federally illegal but state legal crop. Hemp is legal both federally and in the state.”

Is it harder to grow industrial hemp?

“There are pluses and minuses both ways,” Eric said. “We both have been breeding cannabis for a long time. Rec farming is more intensely regulated.”

The cannabis rooms

Across from the office is a barnlike structure. Shimmers of yellowish light can be seen through the small translucent window set into the door. Inside are 1,700 potted plants, which look remarkably like recreational marijuana plants. That’s because they are exactly like recreational marijuana plants. The Crawfords have bred out the THC and two of their associates — there are eight employees beyond the Crawfords, with most of them holding horticulture degrees from OSU — are tending to the plants,

Three years of breeding has gone into the plants, which carry the names Elektra, Lifter and Suver Haze. Intense grow lights beam down from the ceiling. The plants range from a couple of weeks old to a couple of months. Indoor growing dramatically speeds up the harvesting cycle. The Crawfords can glean four to five crops per year.

“Under lights,” Eric said, “you can plant in June and harvest in August.”

Around the corner is an old shipping container. Inside the narrow, brightly lit and plywood insulated crate are 72 more Lifter plants that are in the final stages of seed production.

“We cut, hang dry and then wait for the right moisture content and run ‘em through the seed cleaner,” Eric said.

That’s 72 plants times 1,200 seeds per plant or more than 85,000 seeds … at $1 per seed.

Three identical greenhouses are next on the tour. Two of the greenhouses contain plants that are grown for their flowers, which the brothers sell for $350 per pound, mainly to international markets. The third contains plants for seed production that are ready for the harvest. Like other farmers, the Crawfords add extra employees during the picking season.

Ultimately the Crawfords want to transition to a greater reliance on greenhouses.

“Greenhouses are more efficient, but we needed a place to get the plants in,” said Seth about their use of barns and warehouses. And he added hat there will be some upcoming capital expenditures. “We’re not taking any crazy vacations, but we’re going to have great greenhouses.

 “We’re harvesting some of the best cannabis seeds in the world,” Seth said. “I don’t want to sound arrogant, but …”

Oregon CBD has acreage and warehouses in five sites in Benton, Linn and Polk counties, with its Albany indoor growing site getting the OK from city officials earlier this month.

Where do they go for advice? OSU Extension?

“We are the OSU Extension for the state in industrial hemp,” Seth said. “We sell seeds for $1 and provide advice for free. The breeding’s not that difficult. You can figure it out. Prospective clients come by regularly for tours. We spend a lot of time on tech support for farmers.”

Have they thought of patenting their work?

Seth: "You can, but it’s stupid."

Eric: "All of the strains exist in the wild."

Seth: "You can patent a process or an idea. You can’t patent a plant. You can create a plant that’s just a little bit different. There is little value to a plant (in terms of patent rights). The original plant is trash compared to what we are doing now.”

The future

Which leads us to what the Crawfords are talking about doing next. It’s kind of like the guy who designs Corvettes. Yes, the 2018 model is awfully cool but that designer already is working on future models and knows the 2022 is going to be even cooler.

Oregon CBD, just as its name suggests, is working mainly with cannabis with the CBD strain. The next wave is CBG.

“CBG is pure,” said Seth, who picks up a piece of paper and fires up an immediate gene sequencing chart to illustrate the concept. “No THC ever. CBG can grow anywhere.”

Eric: "Hopefully, we’ll have CBG next year."

When will it be in Walmart?

Seth: "After the 2019 harvest."

“Some of this stuff we’re just dreaming up,” Seth said. “It’s an incredible plant for what it can do. Its chemistry is so malleable and diverse. And we’re just getting to the point where we have the ability to find out what each one of these little things can do.”

Have things turned out the way you thought they would?

Eric: "Yes and no (he cites mites and aphids as one of the biggest challenges)."

Seth: "It’s the hardest job I’ve ever had. It’s what I was meant to do. I can’t express to you the excitement we feel working in this field. Every day there is something new, exciting and incredible. Sharing what we know and having a good time.

"And I wouldn't be able to do it with someone other than Eric. There is such confidence and trust there. We hope to continue to push the science of cannabis. Buy new equipment and do a lot of groundbreaking work."

CANNABIS DEFINITIONS

THC: tetrahydrocannabinol, the main psychoactive ingredient in cannabis

CBD: cannabidiol, one of the 113 active cannabinoids identified in cannabis. Has a wide range of medicinal uses

CBG: cannabigerol, another nonintoxicating cannabinoid, with medicinal uses that exceed those of CBD.

Hemp: a general term for the marijuana plant but used but more specifically for the fiber and medicinal uses of the plant Recreational pot

 

QUOTEOUT “Some of this stuff we’re just dreaming up. t’s an incredible plant for what it can do. Its chemistry is so malleable and diverse. And we’re just getting to the point where we have the ability to find out what each one of these little things can do.” Seth Crawford, co-owner of Oregon CBD.


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Recreational pot expert chimes in over overproduction, other issues

Seth Crawford, co-owner of Oregon CBD, is an acknowledged expert on the marijuana industry.

He studied the sociological and economic impact of the Southern Oregon pot business for his doctoral dissertation and he was quoted in a recent Associated Press story on overproduction in the industry. The story was published in this newspaper earlier this month.

He responded to series of questions via email. The transcript was lightly edited for clarity.

Question: How did the state establish how much pot might be grown/needed once it was legalized recreationally? In the AP story you noted that there are 900 licensed recreational growers with more than 1,100 license applications awaiting approval. Will the surplus continue to grow?

Answer: The state did little to assess how much supply was needed, outside of hearing public testimony in the legislature’s Joint Committee on Implementing Measure 91 in 2015. I was invited to present the details of my research on Oregon's pre-existing medical cannabis production on May 20, 2015. The goal was to help frame the newly unveiled canopy limits. I told the committee that, at the time, Oregon already produced three to five times what it consumed and that total in-state demand could be met by as few as 60 of their proposed 40,000 square foot farms. Oregon has been a leading cannabis exporter for decades.

All signs are pointing towards continued growth in the total surplus inventory in 2018. I expect it will peak next fall / winter, then start declining in summer 2019 for three reasons: (1) consolidation / liquidation of existing businesses will remove many farms unable to adapt to maturing market conditions, (2) enforcement actions by OLCC and ODA against noncompliant businesses and tighter inventory tracking will make it more difficult to divert, and, therefore, end the encouragement of overproduction, and (3) savvy farmers will start focusing on quality over quantity, growing only what they can sell.

Q: From the recreational growers perspective what are the pros and cons of getting a license as opposed to staying on the black market?

A: Long term stability vs. short term profit, but more important to contextualize what the “black market” was before legalization. Pre-legalization, most marijuana was produced legally under the medical program and the majority of it was grown like a backyard zucchini crop. The excess was dealt with in similar fashion (gifting to friends and family), with some exchanges for money (average income from illicit sales was around $7,500 per respondent in my study of growers). It served as a small, but important source of supplemental income for many people living in economically marginalized areas of the state. Today, those who are establishing themselves in the regulated, adult-use market have the best chance of making a career out of cannabis farming, but only if they can entrench themselves as niche producers. Those who did not enter the OLCC system are scaling back or entering markets that allow legal export (such as industrial hemp).

Q: Is it your sense that more pot is being smuggled out of Oregon than before? This was a question posed but unanswered in the AP story.

A: I seriously doubt that there has been a major change in how much our state illicitly exports, but that’s really just an educated guess.

Q: The federal prosecutor quoted in the AP story, Billy Williams, says he is “going to do something about” the overproduction. As a practical matter what can he do?

A: It’s critical to understand how much power law enforcement and prosecutors have over all people and property, not just cannabis farmers. Federal civil forfeiture law allows enforcement agencies to literally take everything a person or business has without criminal charges even being filed. The burden of proof is then on the person or business to demonstrate that the seized capital was lawfully obtained. In that regard, the only thing separating the U.S. from lawless, authoritarian regimes today is the judicious application of such sweeping power.

Williams has a job to do, and despite his recent public proclamations threatening the cannabis industry, inciting a revolution is not one of them. It’s pretty obvious to anyone paying attention that cannabis is an entrenched, legal industry that is not going away.

Q. How big of an impact does the 2013 Cole memo, which argued in favor of federal leniency in states where pot was legal, have on the debate?

A: The Cole memo is now a historical document. Before it was rescinded, state governments treated it like a law even though it was only guidance. The more important protections have always flowed from Congress and include the Rohrabacher-Blumenauer amendment (protecting state legal medical marijuana from federal enforcement actions) and similar provisions protecting interstate commerce rights of industrial hemp farmers.

Q: How big of an issue is the cash-only aspect of the recreational market? Is that likely to change soon?

A: It is not entirely “cash-only,” but banking restrictions definitely impose far-reaching consequences. It is difficult and unnecessarily dangerous to operate in a cash-dominated industry. More importantly, the traceability and transparency that is being demanded of cannabis businesses simply cannot occur unless access to banking is allowed. No bank access also forces start-up companies to look towards unconventional funding sources and limits the ability of established businesses to expand using bank loans.

Q: In a 2014 Corvallis City Club appearance you noted that 14 percent of Oregonians used marijuana. Do you think that that number has seen much of a bump since recreational legalization?

A: THC use hasn't markedly changed since legalization. Psychoactive cannabis is a niche market with a little less than 20% of the population using the substance in any given year. What has changed — and dramatically — is the types of products consumers are purchasing in retail shops (movement towards vape pens, concentrates, edibles, and topicals at the expense of flower sales) and the availability of cannabis that doesn’t get people high, but provides significant improvement in quality of life. More people are using cannabis than ever before, but the real growth is in non-intoxicating cannabinoids like CBD and CBG for pain and age-related degenerative conditions.