New Hemp Fund to Invest $500M by 2030
rePlant Hemp, an ESG impact fund, will invest $500 million into the industrial hemp supply chain by 2030, organizers said. Image courtesy rePlant Hemp
By Jean Lotus
A new ESG impact fund focused on hemp for food and fiber will inject $500 million into the industrial hemp supply chain by 2030, founders announced at New York’s CWCBExpo last week. One of the first related innovations is a hemp-based “ink” for 3D construction printing.
Longtime hemp advocate and former cannabis entrepreneur Geoff Whaling, chair of the National Hemp Association, announced the formation of rePlant Hemp Advisors which will launch in January of 2022. The fund is among new socially responsible impact investments that prioritize optimal environmental, social, and governance (ESG).
“We will unlock the vast potential of America’s newest commodity; a regenerative, carbon-sequestering natural resource,” Whaling said at the trade show.
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The fund will “connect American agriculture with innovative technologies to create industrial inputs that can serve as renewable, sustainable replacements for our current unsustainable ones,” he added.
Industrial applications of hemp have a potential $32 billion worth of yearly economic impact from US-grown hemp fiber by 2030, according to a National Hemp Association report.
After 80 years of prohibition until the 2018 Farm Bill legalized hemp, the fledgling US hemp industry has been hobbled by lack of access to capital to scale.
Minimal domestic fiber processing exists in the United States, causing a bottleneck for the industry, Wilson Kello, chief marketing officer of rePlant Hemp, told Hemp Build Mag.
“Farmers (especially those burned by CBD) need to be able to see the intake facilities and understand the value chain if they’re going to put their trust in hemp,” Kello said in an email.
rePlant is looking for, “a handful of promising targets who can deliver relatively low-cost scalable processing tech to handle 5,000-10,000 acre regional grows,” he added. “These [companies] have innovative tech that can produce hemp-based revenue within a six-month timeframe. We will double down on our successes and scale as we drive downstream demand with education-based marketing campaigns.”
The fund will support American entrepreneurs and push forward the sustainable hemp raw materials for use in everyday products like paper, plastic and cement, organizers said.
“We don’t have to fully acquire companies, we can support a diverse portfolio of upstream processors and downstream consumer-facing manufacturers alike, while using global IP to develop new sustainable products for our domestic markets,” Kello added.
3-D Construction Printing with Hemp?
Hemp building materials may be a focus of future rounds of funding, thanks to the influence of the fund’s co-founder Mike Woods, CEO of Black Buffalo 3-D Corp, a South Korean-owned 3-D construction firm founded by the same family as the Hyundai company.
Woods has a background in finance with leadership roles in Rothschild & Co. Asset Management U.S., Inc. and other Wall Street funds.
Black Buffalo announced last week that the company will partner with publicly traded Colorado-based Revive Hemp Industries and 3D printing company Alquist to use industrial hemp as an aggregate in structural proprietary construction “inks.”
“Working with Revive and Black Buffalo, we believe that by introducing hemp into our homes, we'll not only strengthen the wall systems, but also the home itself will sequester carbon every day, contributing to greener construction," said Zachary Mannheimer, founder and CEO of Alquist in a statement. Alquist’s 3D printed homes are still in the prototype stage.
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The industry turns a corner
In the past year, the investment potential of industrial hemp grown for seed and fiber -- as opposed to CBD -- has turned a corner, fund organizers said.
In July of 2020, Whaling, as part of Canadian cannabis company Canopy Growth, helped raise $150 million for a special-purpose-acquisition corporation, or SPAC, called Collective Growth Corp.
The non-specific company had plans to acquire hemp companies and create a large New York hemp-based industrial park, but the company couldn't find hemp companies mature enough to buy.
The SPAC ended up combining this spring in a $1.4 billion deal with Innoviz Technologies, an Israel-based self-driving car tech company, rePlant said.
This time it’s different, Kello said.
“As a private ESG impact fund, we raise capital with the same thesis—that the biggest long term value proposition of the plant is industrial—but we’re able to deploy it strategically,” he said. “rePlant is a true ESG investment for patient green capital. We will deliver big wins over our ten-year arc, but not before we stand up the supply chain.”
Potential investors are responding favorably -- especially in family office portfolios that seek sustainable investing, often to compensate for fortunes made from fossil fuels, he said.
“Family offices with tremendous investment portfolios often correlate to generational wealth based on ecologically destructive industries,” Kello said.
“Now the great grandchildren are urgently seeking sustainable options as they divest from fossil fuels and carbon-intensive industries. rePlant offers a real ESG investment opportunity with visible impact: giving American farmers a new cash crop; giving American manufacturers a sustainable input, all while repatriating domestic supply chains and strengthening the economy from Main Street to Wall Street.”
Cannabis investors start to notice industrial hemp
Other investment groups and private equity funds (many with cannabis affiliations) have started to pay attention to the potential of industrial hemp.
In the last year, Newport Beach, CA-based CBD company Kadenwood, LLC raised $50 million, in Series B funding, a portion from Los Angeles-based cannabis investment fund Arcadian Capital Management.
Also this year, New York-based cannabis funders Merida Capital Holdings, invested $18 million in British Columbia-based hemp processing company Canadian Rockies Hemp.
Alabama’s BastCore fiber processing company raised $2.4 million from San Francisco-based Poseidon Asset Management, another cannabis fund.
Denver-based Sanitas Peak Advisory, LLC, a veteran hemp investment firm, is assisting rePlant Hemp as advocates, the company said.
“The tailwinds supporting the transfer of industrialization to more sustainable input materials are there,” Sanitas Peak co-founder and managing partner Tammy Dekel said in a statement. “Everything is aligning in the right direction for this plant and for this industry,” she added.
Whaling pointed out the uses of industrial hemp are widespread in the next generation of sustainable hemp-based foods, construction materials, textiles, automobile parts, bioplastics and more.
“Hemp is at an inflection point: There is no other natural resource with a foothold in such a wide range of major global industries. The combined Total Addressable Market is staggering,” he said.
This article first appeared in Let’s Talk Hemp.
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