Mark Case has been growing and processing hemp for just two years, but he is no rookie. Case is CEO and co-owner of three hemp companies: New River Botanicals LLC, the franchise unit that sells CBD oil; Southern Hemp Marketplace LLC, an auction house that will provide small hemp growers a place to market their products; and HKH Industries, the parent company.
“The hemp industry is still so new in this part of the country,” he said. “This is about the fifth year, and it’s the first year for so many to become involved. When I say I’ve been in it for two years, that’s like 10 years for another company because it’s so new.”
The Canton, Miss., native, who moved with his wife to Murfreesboro, Tenn., a few years ago to be near their grandchildren, says the industry is growing so rapidly that they can’t keep up with the demand.
Case owned several small land development businesses in Mississippi in the 1990s, including the first wastewater industrial treatment plant. After the Tennessee move, he continued doing land management with a developer who wanted to grow hemp. For about a year, he was the chief operating officer for another commercial hemp processor.
In February, HKH co-owner Steve Howard contacted him with an opportunity to build something from scratch. Self-funded with $3.5 million, the company was in business two weeks later. Together, they are growing roughly 70 acres of hemp and building a state-of-the-art CBD oil extraction facility slated to open around November. When up and running, the facility will process about 2,000 pounds of dried hemp a day.
“We’re from seed to shelf,” Case said. “There’s a tremendous amount of competition this year, but the demand is so great that it’s probably going to be several years before we can catch up with the demand.”
Just six months after creating the business, Case projects sales at $3 million this year, and $15 million for 2020.
In addition to growing, manufacturing and selling the product, Case oversees a research and development unit at New River Botanicals, or NRB, that is working on various products, including topicals infused with CBD oil, which research has shown to be beneficial for humans and animals suffering from a host of physical ailments, Case said.
NRB is selling nationwide to all kinds of customers, including private drug stores, retail shops and individuals, and plans are also underway to move into several national stores.
The company’s vision also includes expanding access to the industry. One way he is doing that is by selling franchises throughout the Southeast.
“It’s very unique, nothing else like it in the Southeast,” Case explained. “They’re kind of like craft beer shops, but they’re boutique-type CBD shops where a small business person can actually purchase their own small extraction equipment, grow their own hemp, extract it and sell it out the front door.”
Also new in the Southeast–perhaps the first in the nation–is a hemp auction scheduled for Nov. 19-21 at Williamson County AG Expo Park in Franklin, Tenn. Because the price of hemp and CBD oil are so volatile, Case believes the annual auction will establish a stable market price for hemp by providing growers a good place to market their products. Rather than having one or two potential buyers, they’ll have hundreds of buyers from southern states.
“I came up with this because I teach a beginner hemp-growers class,” he said. “Students are always asking, ‘Where are we going to be able to sell our products?’ because people are offering them really low prices. This puts the buyers in competition with each other, so [the auction] is going to help the industry tremendously. In fact, it’s already beginning to help because buyers are beginning to negotiate with sellers to get them from going to auction.”
Case said his research suggests the market is projected to grow to $24 billion by 2023, up from just $700 million last year, and as new states continue to legalize hemp, those numbers will skyrocket.
To put that number in perspective on a smaller scale, raising hemp for CBD oil can cost between $8 to $15 per pound, but last year, it sold for an average of $40 to $70 per pound. Hemp planted for CBD oil requires only 120 days of growth, from seed germination to harvest.
The venture has been a learning experience because the product is so unique, Case said. Extracting the CBD oil is a simple science, but making it into a medicinal product is more complex.
Still, you don’t have to be a farmer to grow hemp.
“I’m reaching out to the little guy,” he said. “Anybody can grow it. It takes a little work to grow it organically, so it’s a little bit harder work but far more profitable than other crops. But it’s worth it. A lot of small hemp farmers could do really well.”
In five years, Case, now 63, said he will likely be near retirement. But he believes his companies will be earning $50 million per year in sales by then.
“People will laugh, but it’s that amazing. We have a little bit of a niche in the market,” he said.
Though he briefly attended Mississippi State University, Case earned a degree from Liberty Bible College and has traveled to third-world countries, teaching the Bible and Christian leadership, digging water wells and other facilities, and assisting on medical missions.
“I seek for the Lord to lead my life, and I believe he led me into this, and he’s blessing me. And my greatest blessing is to bless others,” Case said.
At McLaughlin, PC we specialized in helping companies and organizations working in highly regulated industries, and we’re at the forefront of hemp law in the Southeast. If you have a hemp-based business and you’d like to discuss it, please contact us.