Can hemp and the CBD craze save rural Kansas?
Sean Lefler twists the top off a glass jar filled with hemp flower, lifts it to his nose, and inhales deeply, as though starved for oxygen. This one’s called Sweet Cake, he says. Other strains — Dough Boy, Space Candy, Secret Kush — inhabit other jars on a shelf behind the counter here at Free State Collective CBD, a colorful storefront on the edge of an otherwise decaying Lawrence strip mall.
“The first day we were open,” Lefler says, beaming with pride, “we had a guy come in, and he looked at all this flower and he looked out the window, then he looked back at us, and he goes: ‘Am I still in fuckin’ Kansas?’”
That’s the reaction Lefler was going for when he and his fiancée, Anne Martin, opened this shop last summer. He was fresh off a few years in Oregon, where he’d moved after 24 years working as an insurance broker in the Kansas City area. He knew a hemp guru out there — a guy named Vic who was willing to show him the ropes.
“He was one of the first licensed guys in Oregon doing medical cannabis,” Lefler says of Vic. “We’re talking 20 years ago. Then he got into growing hemp. He is a master hemp grower. So I went out there, and he taught me everything about growing, about the business, about it all. I dropped a quarter of a million dollars on it. I consider it my Ph.D. in hemp.”
A terminal degree is not required for this article, but perhaps this is the spot to slip in a bit of Hemp 101:
• Hemp and marijuana both derive from the same plant — cannabis sativa — but they are not the same thing.
• The psychoactive chemical in marijuana that gets you high is called THC.
• Marijuana typically contains levels of THC somewhere between 5 percent and 35 percent.
• Hemp, on the other hand, has negligible levels of THC — less than 1 percent.
• Thus, hemp will not get you high, no matter how many blunts of it you smoke.
• Instead, hemp contains a high amount of a chemical called CBD, which is believed — and in some cases proven — to have a variety of health benefits, including treating pain relief, anxiety, arthritis, and epilepsy.
• In addition to its CBD-related medicinal utility, hemp can be used in thousands of products, including rope, textiles, body products, health foods, clothing, kitty litter, insulation, and biofuel.
For incredibly dumb reasons — Reefer Madness panic and, if you believe many hemp advocates, the corrupting influence of a powerful paper industry threatened by a cheaper substitute — the U.S. government in 1937 criminalized the cultivation of hemp on American soil. Over the last half-decade, though, hemp has been making a comeback. The 2014 Farm Bill paved the way for individual states to create pilot programs to research the production of industrial hemp, and the most recent Farm Bill, signed by President Trump in December, legalized hemp federally (with a multitude of complex restrictions that become harder to parse at the state level).
Hemp grows wild across Kansas, and it grows tall: 12 feet high, you’ll hear from farmers, 15 feet sometimes. But Kansas has lagged way behind on legalizing the cultivation of industrial hemp. Only last year did the Legislature vote in favor of a pilot program to allow Sunflower State farmers to start growing hemp. On the retail side, shops such as Lefler’s are allowed to sell CBD products as long as they are derived from hemp that contains less than 0.3 percent THC. Anything over that amount of THC is still considered a controlled substance.
Free State Collective CBD is unusual in a couple of ways. One is how much hemp flower it sells. Yes, there’s the usual all-purpose array of CBD products: CBD hand creams, CBD lotions, CBD bath bombs, CBD gummies, CBD tinctures, CBD vaping cartridges, CBD animal treats, CBD hot sauce. But Lefler says more than 70 percent of his sales comes from those big jars of Sweet Cake and Pine Berry. He calls his shop a “West Coast–style dispensary,” which basically means that it looks and feels like a marijuana dispensary, except that all the wares are CBD.
The other distinctive thing about Free State Collective CBD is that, unlike most CBD shops in Kansas, which buy their products from wholesalers, Lefler owns and runs a processing kitchen in a suite adjacent to the shop. Many of the CBD products he sells are made here. This is legal; he has a license to do this, and he believes it’s the only such license yet issued in the state. Lefler sources his raw CBD from farms in Oregon and California (which also are required to produce CBD with below-0.3 percent THC), connections from his Oregon days. In addition to providing inventory for his own store, Lefler is in talks with a few well-known American chains to distribute his products, he tells me.
“We got a lot going on,” Lefler says, grinning. “Kansas is the spot, man. This is gonna be a big deal here. It’s just beginning.”
That was December. Two months later, the Kansas Bureau of Investigation will raid Lefler’s shop and confiscate $70,000 worth of CBD product and equipment.
* * *
Beneath a faded ball cap pulled low and tight, Bobby Gabriel has the reddish face of a lifelong farmer — weathered by the scorching Kansas sun and the winter’s whipping prairie winds. Gabriel, his brother, and his father farm on land near the Kansas towns of De Soto and Eudora. Corn, soybeans, some cattle. His family has husbanded here for six generations, since 1859.
It’s never been easy, but lately it’s become damn near impossible.
“There’s just not much profit left in it,” Gabriel says. “My grandpa raised five kids on 300 acres. The way crop prices are today, I couldn’t raise two kids on our 6,000 acres.”
Grain — the lifeblood of Kansas farmers — is way down. Since 2012, soybean prices have declined 26 percent; wheat, 48 percent; corn, 50 percent. Meanwhile, fertilizer, gas, and equipment costs continue to rise, sometimes dramatically. And that’s before you factor in President Trump’s trade wars, which last year resulted in China halting its purchase of American soybeans, a move that pushed crop prices into free fall. China recently pledged to begin buying soybeans again, but even if the country makes good on that promise, its new orders will account for only two-thirds of what it bought in 2017, according to Agriculture Secretary Sonny Perdue.
“It is beginning to become a serious situation nationwide, at least in the grain crops,” Allen Featherstone, head of the Department of Agricultural Economics at Kansas State University, told the AP in late February.
Or, as Gabriel puts it: “Another year like last year, and I might have to hang it up.”
Plenty of farmers already have, one way or another. Suicide rates for farmers — already one of the highest of any profession in America — are on the rise. The suicide rate in Kansas has increased 45 percent over the past 17 years, outpacing the national average. And in the least populated Kansas counties, the suicide rate is much higher than in urban areas, according to High Plains Mental Health Center, in Hays, which now distributes brochures on mental illness and suicide to farmers across the state. Farm bankruptcies are also increasing. Bankruptcies in the Midwest were double in 2018 what they were in 2008. In Kansas, 35 farms filed for Chapter 12 in 2018, the second-highest increase in the country.
It’s due to these grim circumstances that Gabriel enrolled earlier this year at America’s Hemp Academy, a new educational venture in a De Soto office park, just off Kansas Highway 10. He’d been hearing promising things about hemp. The upfront costs are high — corn costs about $300 an acre to plant, whereas hemp is $7,000 — but the potential profits are huge, Gabriel says.
“You can make $15,000 on that acre if you do it right,” he tells me. “I was on Amazon last night, and they’re selling a 7-ounce thing of hemp flour for $18. So, yeah, that sounds pretty good.”
America’s Hemp Company officially began accepting applicants earlier this year, following a December 2018 ribbon-cutting attended by then-Gov. Jeff Colyer. Gabriel is one of about 15 members of the first official class. It’s a weeklong program, 8 a.m. to 5 p.m., and it costs $2,000. Students receive a mix of hands-on training and lectures from experts: the history of hemp, greenhouse best practices, business advice.
It all has the distinctly for-profit feel of a technical college — of instruction tied to a boom to be squeezed. As Gabriel and I stand talking in a shabby “hemp laboratory” filled with demonstrations for making hempcrete blocks and kitty litter, we’re surrounded by a stew of nervous farmers, supposed experts, earnest back-to-the-landers, white-collar professionals hoping to map their skills onto a burgeoning industry, and, of course, scheming hustlers — what I now recognize, months of reporting later, as a deeply representative cross-section of the emerging hemp industry in Kansas.
Among them is Shawn Thornton, an agronomist from Meade, in southwest Kansas. For the last 30 years, Thornton has been advising clients on how to grow the usual Kansas crops. But lately more have been coming to him asking about hemp. He’s here to educate himself. “There’s a real question about where to sell it,” Thornton says. “With soybeans, you just take it to the elevator. But with hemp it’s less clear. I’m trying to figure out where the markets are while I’m here, too.”
Then there’s Ben Ross, a rep from Monosem, a European company whose U.S. headquarters is in Edwardsville. It makes precision planters that lately have been optimized for hemp production, and it’s trying to increase hemp-related sales in the Midwest. “Personally, I’m taking three calls a day from hemp customers across the U.S.,” Ross says. “And I’m just one of 11 reps.”
America’s Hemp Academy is the brainchild of Joe Bisogno, the founder and CEO of the sandwich chain Goodcents Subs and Pastas (née Mr. Goodcents). I meet Bisogno a week later, in a conference room in a different De Soto office adjacent to the academy. This winding stretch of real estate along Commercial Drive is a sort of business campus for Bisogno and his various endeavors. Many are related to Goodcents: a point-of-sale technology company, a custom foods operation. Now, he has KMC, which stands for Kansas Miracle Crop. The miracle crop, of course, is hemp.
For a big-shot CEO, Bisogno is surprisingly unkempt — shaggy plaid shirt, sleepy eyes — but he has a Trumplike salesmanship about him. “Industrial hemp is not pot, but it is a pot of gold for Kansas farmers,” he told the crowd at the December launch of America’s Hemp Academy.
Four years ago, Bisogno decided he wanted to sell hemp cookies at Goodcents. So he went to Kansas Attorney General Derek Schmidt — who told him not to do it, because hemp was illegal in Kansas. So Bisogno traveled to Scotland, Germany, Ireland, and Brazil, to learn more about how those countries approached the crop. He also went to progressive hemp states such as Oregon, Colorado, and Kentucky. He’s since been pushing Kansas lawmakers to legalize hemp.
Now that CBD is legal in Kansas, Goodcents is selling hemp cookies and hemp pizza crusts, with plans to incorporate it into more food products.
“I tried for two years at Goodcents to make a pizza you can grill,” Bisogno says. “It’s very difficult to grill a pizza. With most flours, the pizza burns too quick. With hemp flour, though, we now have a pizza crust you can grill — or bake — and in 10 minutes you have a piping-hot, high-nutrition pizza.”
He says the long-term goal of his academy is to “keep Kansas kids home” — by which he means build an economy in which the children of rural farmers don’t have to leave Kansas to make a living.
“There’s no opportunity in so many of these places,” Bisogno says. “They can’t stay in a small community because there aren’t any jobs. Hemp allows you to start a hempcrete company, or a milling company to make flour. We use 100,000 pounds of flour a week. There’s demand for hemp flour if somebody started making it. There is a major growth spurt in demand for hemp coming right around the corner.”
Two young men in crisp suits carrying leather binders have arrived in the lobby, just outside our conference room. They’re from Florida, he tells me. He checks his watch and begins to wind down our meeting.
“Hemp will create more commerce, jobs, and opportunity than anything we’ve seen in this state in a long time — it’s going to be huge for Kansas,” Bisogno says, sounding a bit like you-know-who. “Huge.”
* * *
Bisogno is right about Kansas’ small towns. Rural communities built around the old American way of life have declined dramatically since the 1990s. NAFTA, passed in 1993, hollowed out the manufacturing industry in small Kansas towns and cities, and hordes of family farms have given up or sold out in the face of rising global agribusiness corporations. The slide in Kansas accelerated over the past decade, owing to former Gov. Sam Brownback’s tax cuts — a historic policy disaster that transferred the state’s money away from government services (schools, infrastructure, pensions, Medicaid) and into the bank accounts of wealthy business owners.
Today, half of all Kansas counties contain fewer than 10 people per square mile.
Bisogno had told me he owns a large property in southeast Kansas called Timber Hills Lake Ranch, where folks pay to hunt and fish on his land. Bisogno said his son, who lives in the area, was in the process of building a laboratory for hemp product testing there, and that local leaders had expressed interest in that project and other hemp-related businesses. Now, in February, I find myself trekking 90 miles south through freezing, horizontal rain to the Bourbon County Courthouse, in Fort Scott, Kansas.
Like a lot of small Kansas towns and cities, Fort Scott has nice bones, with a well-preserved (if sparsely occupied) downtown. About 7,700 people live here, a number still in decline. Not very long ago, however, this small city had a perfectly healthy economy, as did dozens of other places like it in Kansas.
“Historically, we were trains and insurance,” says Justin Meeks, legal counsel for Bourbon County. “The train companies were here until maybe the ’30s. Then we had Western Insurance, which was a Fortune 500 company in its day. They and a few other insurance companies left in the ’80s.”
Meeks is 40ish, tall, bearded, friendly. His family’s been around Fort Scott since before the Civil War; much of its property has been converted back to natural prairie. He grew up here, moved to the KC area, and came back. Like many a native son, he’d like to see his hometown thrive again — or, at least, not wither and die during his lifetime.
At the moment, the outlook remains bleak. Bourbon County has little in the way of industry. Besides some jobs at a small window manufacturer and a denim-overalls company, it’s mostly a farming and ranching community, with the third-worst per-capita valuation in the state of Kansas.
After years of million-dollar losses due to declining patient numbers and diminished reimbursements from insurance companies and Medicare and Medicaid, Mercy Hospital, the only hospital in Fort Scott, closed at the end of 2018. Now, if you break your leg or have a heart attack in Fort Scott, you’re in for a 30-minute ambulance ride across the state line to a hospital in Nevada, Missouri, or a 45 minute drive to the hospital in Pittsburg.
“We’re a pretty large community not to have an emergency room — I would imagine maybe one of the larger communities in the country without one,” Bourbon County Commissioner Lynne O’Harah tells me. “And with the hospital closing, our first-blush look at things is that we could lose about 10 percent of our population in the next two years. And that’s on top of the 16 percent of the population we are projected to lose over the next 25 years.”
Bourbon County’s leaders are trying to make the most of what remains. Fort Scott is located at the intersection of two fairly well-traveled highways, U.S. 69 and U.S. 54. There’s plenty of water down here, unlike in western Kansas, and there’s also pretty good internet access, which is hardly a given elsewhere in the state. Completed a year ago, the county’s high-speed fiber highway is a pitch for new businesses and members of the work-from-home economy who’d like a cheaper place to live.
And a recently announced partnership among Allen, Bourbon, and Crawford Counties proposes what would be a substantial recreational investment: the ABC Trails Plan, a biking and hiking rail-trail system (think Missouri’s Katy Trail) that would connect a good chunk of southeast Kansas. “I truly believe we’re in the epicenter of a lot of things, and that’s there’s still a lot of potential here,” Meeks says. “It’s just a matter of pulling all these things together.”
“We want to be a model of what a rural community looks like,” O’Harah says.
O’Harah and others are beginning to believe that hemp might be one way to get there. They, too, see CBD hurtling toward the mainstream — CVS announced in March that it would begin selling CBD products in its stores — and they are aware that speculative money for hemp operations is beginning to pour into the state. Though hemp farming is better suited to drier climates than Bourbon County’s wet, Ozarks-adjacent valley, it’ll grow here; before the Civil War, a lot of rope made from hemp came from the area. A new tax program aimed at redevelopment in the area would also allow Bourbon County residents to erect commercial facilities on their property and receive five- or 10-year rebates on their taxes.
But the county is more interested in attracting hemp-related businesses: CBD-oil-extracting companies, distributors— the types of enterprises that employ several dozen people. A partnership with Fort Scott Community College to provide training for hemp jobs is under discussion.
But a lot of this talk is, for now, just that. For instance, the potential Bisogno-related project.
“Joe hasn’t given us authority to talk about potential production facilities, but we believe there is out-of-state interest — and possibly in-state interest — in building a facility somewhere in Bourbon County,” Meeks says.
* * *
A slightly more advanced study in hemp’s potential to reinvigorate rural Kansas economies lies in the central Kansas city of Russell, population 4,500. Some famous, successful names hail from Russell — former U.S. Sen. Bob Dole, billionaire Philip Anschutz — but, as Grace Blehm tells me, the community has been struggling for a while.
“For farmers here — this is primarily an ag-and-oil community — it’s really tough. Really tough,” Blehm says. “I grew up in this area, and I can’t name you one farm family where at least one of them, if not both, work off the farm somewhere. And they do it for two reasons. One, for insurance. And two, to have a steady income so they can actually pay their bills.”
Blehm, as one of Russell’s few business owners — hers is a liquor store called Bottlenecks — is motivated enough to sit on the economic development advisory board for Russell County. (The city of Russell is the county seat.) As part of that board, she’s also a member of a hemp subcommittee. Russell County got curious about hemp four years ago and has been highly engaged with legislative efforts at the state level ever since.
It’s beginning to pay off. The county was selected to participate in a hemp pilot project last year, and in March it announced two hemp-related businesses that would be opening soon in Russell County. KB Extractions will focus on industrial hemp growth for oil; Mechanized Concepts, an outfit based in Utah, has received a half-million-dollar grant from the county to open an industrial hemp equipment manufacturing facility in Russell.
Janae Talbot, the economic development director for Russell County, says Mechanized Concepts could bring to town about 50 new jobs over the next few years, with possibly as many as 200 jobs by 2023, depending on the market.
“We decided to target fiber, not oil,” Blehm says. “I don’t know how sustainable the CBD-oil thing will be over the long term. I tend to wonder whether Big Pharma is going to take over that industry. They’re already heavily involved in it and have all the influential lobbyists in D.C. working on it. Fiber [industrial hemp] is more sustainable, and I think it’s a better fit for our farmers in this area.”
John Henning, a 37-year-old, third-generation farmer born in the south-central town of Kingman, agrees. As a kid, he saw hemp plants growing wild in the fields, often three times higher than his head, and wondered why his family’s farm couldn’t get their other crops — alfalfa, wheat, beans — to grow like that. Henning left the farm for college at the University of Mississippi; he had a scholarship to work at the Blues Archive there. He went on to work in the music business, booking regional tours in the South, until his father died of cancer in 2015, at which point he says he started to get interested in hemp, especially its medical uses.
“I’ve spent the last four years moving around the country learning everything I can about the business,” Henning says. “Colorado, Kentucky, Oregon, Pennsylvania — I’ve been spending 200 days of the year on the road, meeting people in this [hemp] industry.”
His business, Henning Trading Company, is now based in Pennsylvania, centered on a 330-acre family farm and handling what Henning calls “headache problems” for farmers looking to get into hemp.
“We work with farmers and put them in direct contact with labs and processing centers, insurance companies, logistics,” he says. “Some people just need our help to get certified seed. Some want more help than that. Basically, the things a co-op would do, we do that for hemp.”
Last year it expanded to Kansas, where Henning’s family still owns about 2,000 acres, and 28 farmers have signed up: five in Kingman, nine in Larned, 14 in Russell. (“Russell’s kind of a progressive honey hole,” he says. “They’re becoming a real beacon for hemp in Kansas.”) Henning says about half of those 28 farmers are below the age of 40 — an encouraging sign for those concerned about the aging populations in these rural areas.
All 28 farms Henning is working with are growing industrial hemp — fiber, not CBD.
“I was the biggest proponent of CBD in 2015,” he says. “Then I spent three harvests in Oregon, Kentucky, and Colorado, watching how hard it is to stay on task with even just an acre a day doing CBD. Nobody ever reports how hard and labor-intensive it is. I’ve seen 20 or 30 employees on 40 acres trying to do CBD, and they still struggle. It’s not hard to get it in the ground and grow it, but it’s very hard to get it off the field without compromising the CBD content.”
And whereas CBD requires a whole new way of farming, most farmers already have a lot of the equipment they need — swathers, balers, combines — to make the conversion to industrial hemp, he says. That means less upfront investment on what’s already a chancey proposition.
“A lot of people are chasing the money — it’s a get-rich-quick thing,” Henning says. “But my experience is that it doesn’t happen like that. About 70 percent of all hemp businesses fail in the first two years.”
* * *
In the 1990s, ostrich meat was the thing that was going to save struggling Midwestern farms. The pitch was obvious: Big birds, lots of meat to sell, surprisingly nutritious. The number of farmers commercially raising ostriches spiked for several years — and then dropped when it turned out Americans couldn’t be convinced to eat ostriches the way they devoured chickens and cows.
Later, canola oil was anointed the savior of rural America. Then it was horizontal oil drilling. Next, wind turbines. Cotton, more recently.
History suggests, then, that caution is in order when it comes to hemp.
“Obviously, right now there is a huge boom in CBD — that is what is drawing the money in,” says Kelly Rippel, the co-founder and vice president of Kansans for Hemp. “But we’re going to see a plateau in that, and in some ways we’re already kind of reaching it.”
Rippel is also the president of Planted Association of Kansas, a nonprofit trade organization advocating for the reintroduction of hemp. He’s skeptical of big-business guys like Bisogno, and he clearly loathes the idea that a would-be mogul in De Soto wants $2,000 a pop from hard-done farmers for information his group is disseminating for free. Instead, Rippel has been involved in drafting several hemp bills in Kansas and is on the board selecting which farmers will receive licenses this year to grow hemp in the state.
“I personally think Kansas has so much to gain from the thousands of products made from industrial uses of hemp,” he tells me. “The market is already there. We’re just importing these hemp products from other countries — mostly Canada. Also, there is limestone all across Kansas, and you need lime to make hempcrete.”
He goes on: “We’re going to see an influx of resources in smaller communities due to the reintroduction of hemp. We’ll see plants cropping up in rural and frontier Kansas, and we’ll see ancillary businesses built around that. There are so many technical jobs and careers that are emerging in the field of testing, analytics, horticulture.”
Henning agrees. He believes, based on his experiences in other states, that Kansas could handle four or five industrial hemp processing centers statewide, each one employing 40 to 60 workers.
Still, Rippel emphasizes that much remains unknown in Kansas: legislation, licensing, markets. The pilot program will continue in Kansas until at least 2021, but there’s no predicting when or whether the state will pass a full hemp bill, let alone when the USDA might issue rules and regulations (which would mandate that states send their plans back to the feds for approval).
Speaking of which: the Kansas Bureau of Investigation’s ski-masked tactical raid on Sean Lefler and Free State Collective CBD, in Lawrence.
When the six bureau agents swooped in, just after 5 p.m. on a Friday, Anne Martin, Lefler’s fiancée, thought it was a joke. Then she was handed the search warrant and told that an undercover officer had done a controlled buy at the store the day before, and that a test of the hemp flower showed it contained .15 percent THC.
“Which is legal in Kansas!” Lefler tells me in late March. “Their search warrant was for marijuana, not hemp. We don’t sell marijuana here. My assumption is, they did a field test for marijuana, and the test they use only checks to see if there is any THC at all. And of course there’s some THC — we tell you how much there is right on the label. But it’s legal under the law. But none of these guys even knew what we do here, what we sell, nothing.”
“We believe there were other products being sold in the shop — other than CBD oil — that contain THC,” KBI spokesperson Melissa Underwood tells The Pitch, adding that KBI won’t be releasing additional details as the investigation is ongoing.
The agents seized 11 strains of flower, the point-of-sale system, cash, a laptop, an iPad, checkbooks, glass pipes, and bongs. They hauled away items from the kitchen, too, though Lefler says the warrant was only for the retail business address. Still, the raid didn’t shut down the business. Free State Collective CBD is open, selling the same products, complying with the law as it and like businesses have interpreted it. Lefler has hired a lawyer to fight KBI on the raid.
Rippel, who is in regular contact with law enforcement representatives as a member of the Department of Agriculture’s industrial hemp research advisory board, says that some in the KBI and other law enforcement agencies in the state are strongly resistant to change when it comes to CBD and hemp.
Regarding the legality of the raid on Lefler, Rippel notes that, although hemp with THC levels below 0.3 is federally legal, legal questions and gray areas in Kansas will persist until the USDA signs off on the state’s permanent hemp cultivation plans.
“Anybody operating in the hemp space in Kansas is operating with inherent risk,” he says. “We have seen that it can be hard, especially with law enforcement, to get people out of this prohibition mentality when it comes to hemp, because that’s all they’ve known for decades.
“Ultimately,” Rippel concludes, “they’ll see that what we’re doing offers a better economy and a new way to rebuild communities.” Out there on the forgotten, withering prairie, it sure is pretty to think so.