Cannabis conversion

Starting on 3 acres in Bourbon County, Kentucky, in 2001, brothers Art and Ken VanWingerden steadily built ColorPoint into the one of the largest greenhouses in the U.S. By following their immigrant parents’ vision of adaptation and innovation, the VanWingerdens implemented some of the industry’s most advanced automation, software and sustainability practices as they expanded to over 5 million square feet of environmentally controlled facilities.

Now, instead of producing 80 million ornamental bedding plants each year, ColorPoint’s greenhouses will be home to hemp.

The company announced in May that its Kentucky facility would transition entirely to hemp production through a merger with hemp producer AgTech Scientific. Simultaneously, ColorPoint sold its 3.6-million-square-foot Illinois facility to Red White & Bloom, a Michigan-based subsidiary of Canadian medical marijuana producer, MichiCann.

“A bright new future lies ahead for ColorPoint and its employees as we transition to this new industry,” says Steve Sloan, senior director of mergers and acquisitions for ColorPoint. “Converting to hemp sets us up for a profitable future.”

Shifting the business

Although this shift represents new opportunity, it’s in response to the severe obstacles surrounding ColorPoint’s traditional business. Crunched by stiff competition and shrinking margins, ColorPoint executives began looking for alternative crops and new revenue streams several years ago. They added indoor plants, orchids and perennials to their production of annuals, mums and poinsettias before looking toward the emerging cannabis industry.

“Our core business became tougher and tougher over recent years,” Sloan says. “Irrespective of our best efforts, our margins consistently continued to shrink to a frighteningly low level. We had little choice but to pursue higher margin options to stay in business.”

Opportunity emerged two years ago, when AgTech approached ColorPoint about producing hemp clones for its network of farmers. This budding relationship blossomed into an indoor trial grow in 2018, and then following the passage of the 2018 Farm Bill that legalized hemp cultivation, the two companies decided to merge in early 2019.

“Art and Ken VanWingerden, co-presidents of ColorPoint, liked how hemp could maximize our space utilization and improve our product and market diversification, all while increasing sales,” Sloan says. “We realized that working together catalyzed our individual strengths, and it made sense to merge.”

Growing a new crop

In 2018, ColorPoint KY committed 7 acres of greenhouse space to trial hemp, producing roughly 200 clone liners for AgTech. Although the crop had plenty in common with the plant material that was previously produced there, hemp presented several unique challenges for ColorPoint’s growers.

“Some growers were a bit apprehensive because all they had ever worked with were bedding plants,” says head grower Chad Cagle, who has been at ColorPoint since 2008. “But everyone sees this as a great learning experience doing what we love: growing. We’re excited about being on the forefront of growing something new.”

To execute a successful trial and a smooth transition into hemp, ColorPoint’s growers relied on their experience growing ornamental plants.

“Hemp is similar [to traditional bedding plants] due to its basic needs of nutrients, water and light. For example, its photoperiod management is very similar to garden mums,” Cagle says. “But hemp is different due to the lack of scientific knowledge about the plant and its needs. We have much more to learn.”

ColorPoint teamed up with university researchers to understand the nuances of producing hemp, as they adjust their growing facilities and practices to optimize the operation.

“Retrofitting the greenhouse will be an ongoing process,” says Cagle, who manages a team of 82 growers. Initial renovations included additional grow lights and fans for circulation, as well as “buttoning up blackout sections for light leaks” and adding more automation for sticking the cuttings, he says.

To make the most of these small adjustments in the greenhouse, ColorPoint’s growers have also had to hone their approach to growing.

“We currently cannot use any crop protections. No chemicals are labeled for hemp in Kentucky, which has made us develop new sanitation protocols to stay as clean as possible,” Cagle says. “We watch the environmental controls more closely to prevent the climate that makes pathogens and disease run rampant. Hemp has forced us to be at the top of our game with biological control.”

Processing potential

After ColorPoint’s indoor trials proved successful, executives decided to convert the entire operation to hemp production. Starting in August 2019, ColorPoint’s 1.8-million-square-foot greenhouse in Kentucky will produce over 200,000 hemp cuttings per day, year-round.

Just as it took farmers decades to perfect the process of growing common crops like soybeans, Sloan expects ColorPoint’s learning curve to span the next several years.

“Hemp has not traditionally been grown indoors, so we are truly pioneering a new field,” Sloan says. “Within the hemp industry, they often refer to this time being like the Wild West with lots of promise, ambiguity and plenty of failure.”

This year, ColorPoint plans to plant over 5 million hemp clones on more than 1,500 acres of outdoor fields within 15 miles of the greenhouse. The company rolled out detailed standard operating procedures to ensure compliance and consistency across its network of farmers – promising “less risk (and) more opportunity for farmers with guaranteed payouts throughout the season,” according to a press release.

The operation received both a hemp grower license and hemp processor license from the Kentucky Department of Agriculture, making it a vertically integrated company with full production capabilities.

A 50,000-square-foot extraction and manufacturing facility broke ground October 2018, with completion slated for August. The facility in Bourbon County, Kentucky, will process 2,000 pounds of hemp per day at first, scaling up to 14,000 pounds per day by 2020.

Looking to the future

Through the summer, ColorPoint will fulfill its obligations to ship legacy products to legacy customers, “providing the same exemplary quality products and customer service that we have always provided,” Sloan says. But by August, both ColorPoint facilities will be completely transitioned to hemp.

Sloan says this transition holds promise, not just for the business but also for its employees — noting that “most employees will continue in their current positions, and many will advance into new opportunities.” So, the 113 full-time employees at ColorPoint KY, which had over 340 workers at peak, will play a pivotal role in the company’s transition. Plus, many seasonal workers may move into fulltime roles, as projected growth gives way to new positions.

Across the organization, from the greenhouses to the executive offices, ColorPoint’s team is enthusiastic about the opportunities that lie ahead with hemp.

“There’s a huge interest all over the world about this plant and its possibilities,” Cagle says. “That makes it exciting for everyone to get involved and be leaders in this new part of our industry.”

The author is a freelance writer based in Cleveland. She is a frequent contributor to GIE Media horticulture publications.