By Ken Amundson
BOULDER — The job of the broker in most industries involves connecting producers with markets. In the nascent hemp industry, it wasn’t until the past couple of years that buyers and sellers of hemp products had that representation.
With stand-alone CBD stores on many corners and a plethora of products available in retail shops ranging from mainline grocers to neighborhood bodegas, the consumer might not see the need for brokerage services. The product is out there, isn’t it?
How it got there, and whether it is a quality product, was the issue.
Jeff Cole, founder of U.S. Hemp Brokerage based in Boulder, came to understand the issue from the perspective of those producing hemp products and those selling it retail.
“I joined Pure Hemp Technology, and I began to try to understand in the early days of hemp the problem of how in the world we put a product into the market that has passed all certifications and how do we actually create products like CBD products and make sure that they reach the highest standard,” Cole told BizWest in an interview. “Then once
we do that, how do we sell them.” Cole, prior to his hemp career, was involved in advertising and marketing for media properties from New York to Boulder.
He created the U.S. Hemp Brokerage concept while at Pure Hemp Technology and then spun it off into a separate company in 2018.
His first task: How to differentiate his brokerage from what others were doing. His answer: Dealing only with producers who could guarantee high quality materials and selling to retailers who could represent the product in a professional manner. “We know how this has to work … we spend money on legal review and compliance officers so that what we say is in the bottle is in the bottle.”
His message to producers is not to chase money; that will come. Instead, chase efficacy of the product.
Among his producer clientele are Restorative Botanicals, a top seller on Amazon; gummie expert Wana Wellness; and Willie’s [as in Nelson] Remedy. And his retail clients include Lucky’s Market; Sprouts; Natural Grocers; Bed, Bath & Beyond; Target, CVS, Safeway, Publix and others. “We only represent leadership brands,” he said.
The work, he said and others confirm, has been highly successful.
“We’ve built quite the category for Lucky’s,” said Christin Evans, the natural living manager and buyer, who prior to the scale back bought products for 39 stores. She currently buys for the North Boulder Lucky’s and assists the Fort Collins Lucky’s with its purchases.
She said she started with one CBD oil “and now offers eight feet of CBD products,” she said in reference to the shelf space allotted to the product in the North Boulder store. “I have a lot of pride in this,” she said. Evans is confident of the quality because she sees “full disclosure from extraction to product,” so she knows what she is buying. “Jeff’s my man; he’d be the one to get it done.”
While CBD oils, tinctures and salves are the sales leaders in the hemp industry right now, Cole knows that other segments will be equally or more important as the industry continues to develop.
He’s divided his brokerage into four areas: Cannabinoid products, which are mainly CBD products; materials such as textiles, wood and hemp plastic; machinery used for harvesting, extraction or elsewhere in the product chain; and technology such as computer apps for CBD consumers or for producers who need assistance licensing products.
U.S. Hemp will also help producers create product lines if it can be done in a quality fashion. He recently helped a 100-year-old Colorado farm family develop its John Budd line, which meant lining up the producer with a processor and helping create product names and marketing. The family has property interests in Ignacio in southwest Colorado but the current owner of the farm lives in Aurora.
U.S. Hemp also will create private labels for retailers who want to sell a product under their own names.
“Brands come to us and say, ‘hey, we know about you guys. Can you sell us with your retailers.’ And we say yes, and we can help you with events and online and elsewhere,” Cole said.
While bullish on CBD — he expects his annual revenue to increase from pandemic-limited $1.6 million to $5 million over the next 12 months — he believes other hemp products will dwarf CBD soon.
“Construction will be astronomical. 3D printed homes using hemp filament will be big,” he said. While cotton at one time supplanted hemp as the go-to raw material for fabrics, he predicted that hemp will one day overtake cotton because it can be grown in a more environmentally friendly manner. Cotton requires a large share of all the pesticides used on U.S. crops, according to the U.S. Department of Agriculture.
“People who understand hemp know … that the industrial aspects of the hemp business are really what people want to see succeed. People who know what hemp is know what we can replace more sustainably.”
Content provided by BizWest