Adam Kurtz on taking his 4th generation farmer skills to Fusion CBD, and the company's explosive growth
Tell me a little bit about your first year growing hemp: year, location, acres, processes, etc. Had you worked with cannabis or as a farmer prior? Sowing, planting, or harvesting by hand?
I am a fourth generation farmer. My parents grew fresh cut flowers for 25 years, my grandparents had a dairy farm, and great grandparents grew vegetables, as did most families from generations ago. From as young as I can remember, we were turning the soil, starting seeds in a greenhouse and planting plugs in the fields. The family farm, Grammy's Garden, grew about 200+ varieties of mostly annual flowers and some perennials in New York, about one hour northwest of NYC. We would do up to nine farmers' markets every week and about 40 weddings a year. It was definitely a labor of love, and the business was dissolved in 2013. Growing the plants with drip irrigation and under plastic is what I have done my whole life, so it was an easy transition to bring this concept to Oregon. We start all the seeds in our greenhouse, and plant plugs in the field either with a water wheel or mechanical planter. Harvesting is done by hand or with forage harvesters depending on the commodity we are looking for.
At the time, 2013/2014, New York was starting to talk about hemp, and I presented to Ag & Markets, but it was clear from the beginning that New York was going to take their time rolling out the growing program, catering to universities and research institutes. Sometime in the fall of 2015, I was introduced to my business partner Ed McCauley, and we would discuss investment opportunities in the recreational marijuana market. After going through multiple rounds of crunching numbers we came to the conclusion that the least expensive entry into the market was in the hemp industry. Through Ed’s calculated risk-taking personality, and my willingness to pick up my wife, 8 month old daughter, and three dogs, we moved 3k miles away from our family and Oregon Fusion was born.
I see Fusion CBD has partner farms across the nation; how many acres of it do you oversee now? How many acres is Fusion responsible for nationwide? How much has the company expanded?
2016 - 3 acres - Oregon
2017 - 20 acres - Oregon
2018 - 50 acres - Oregon, New York
2019 - 400 acres - Oregon, New York, Tennessee, Maryland
Our partner farm model has catered to smaller size grows. Last year we bought back the majority of material that our partners grew for our established wholesale and retail network of distributors, stores and e-commerce. This year we have expanded operations to include contract farming, where we are paying farmers, throughout the year, at a discounted rate. We will be paying out millions of dollars to these farmers before any plant is harvested. The models will be expanding to where we will need 2500 acres or more in 2020 and beyond.
What are some of your favorite technological advancements in farming you’ve seen since you first started in the industry? Have you guys development any processes you consider pioneering and don’t mind sharing?
What is so amazing about growing hemp in Oregon is the ingenuity that farmers are showing with how to harvest and process these plants. There are 250+ speciality crops grown here. So we are seeing really unique equipment being retrofitted or designed. The biggest question is how we scale. Forage harvesters, retrofitted combines, shaker tables, and seed cleaners are being utilized to clean up stalks, stems and seeds from biomass, all of which extractors do not want to see.
For us, I am not one to sit idle, staying in a comfort zone, so we are experimenting with planting equipment this year. We will be utilizing a three row mechanical planter that will lay drip tape at the same time. No more plastic mulch for us. It is a love/hate thing for me personally since I have used it for so many years. Another piece of equipment we brought in from Georgia is a three row fertilizer hopper, that will rip dry amendments into the soil on either side of the plant, so we do not have to broadcast on the whole field. We will only need 10 tons of fertilizer for a 30 acre in-house grow.
I would like to implement some type of robot weeder attachment in future years.
What areas do you see where there is still room for technological improvement?
Harvesting and extraction. Equipment that can strip the plant in the field so we do not have all this additional wood weight. Extraction outfits need to get away from bench top models and work towards the fuel industry scale. As millions of pounds of hemp need extraction, we see the bottleneck at the lab level.
Fighting nature, fixing tractors, or finding staff: Do you struggle more with environmental, mechanical, or personnel related issues at your farms? Has cross pollination been an issue?
Oregon - During our first year growing, there was over 10” of rain in October at our farm and our greenhouse “drying” space was quarantined by ODA for having a portion of our crop test hot. We then watched mold spread across the field as we scrambled to bring in 5 x 40’ containers to salvage what we could.
New York - unprecedented rain in 2018, slowed the growing process and plants did not mature as much.
We rented the first few years, and finally bought a new one this year. No issues.
Quality workers are hard to come by. We are currently fortunate right now, but as we scale this will be more of a concern.
They don’t always listen to our advice.
- pulled males, but left on edge field, which pollinated crop
- did not begin harvest till two weeks after suggested. Only harvest 6k lbs of estimated 10-12k.
- sold crop, without first right of refusal to us, for a low price. We eventually ran out of supply, as we were counting on additional material
Our first year we ended up with hundred of thousands of seeds that we did not sell to make a short-term profit. We did not want to be responsible for other farmers to fail ODA testing, hence preserving our name and relationship with other peers.
Any good stories of struggles you’ve over come in your years in the industry?
We have worked very hard to overcome a couple big obstacles our industry faces. The first one being merchant processing for online sales. We were shut down 3-4 times over a two-year period. We now have a call-in center, where customers can call, ask questions and order their favorite product by providing a credit card over the phone. We ship all of our products out of a NY based fulfillment center.
Banking has been another challenge for most. We were shut down once, but now have three different hemp-related bank accounts, with an East Coast provider. They visited our operations and have taken necessary steps to ensure that we are compliant. They are very happy to work with us.
What are your favorite strains to grow? Do you have a part in the process after the flower leaves the farm? Does your extraction process favor any strains?
Our best performers have been Pineberry, Suver Haze, and Elektra. We are achieving total cannabinoid levels up to 22%. Once material is dried, it gets bucked off the stem, then graded. Tops, B-bud, and biomass. Our extraction runs consist of a mix of strains, to give the most diverse cannabinoid and terpene profile.
Any Fusion CBD products you think really stand out?
The 1000mg full spectrum tincture is Fusion CBD's original and most diverse product. It can be used both topically and taken orally. It is predominantly CBDa with minor cannabinoids and 3-5% terpene content. The strong flavor, almost peppery, is due to the terpene content, which enables all the cannabinoids to work their best.
On the regulation side, do you see the greatest threats coming from the Feds or the states themselves? Any particular threats you see on the horizon?
Overregulation is the biggest threat. Yes, we believe in testing and safe products, but it needs to be done in line with other cGMP food and beverage practices. Lumping hemp and hemp derived products in with medical or marijuana regulations is not the answer. We need to keep this crop as an agricultural commodity. We need to pay close attention to the USDA rulings which will help guide the industry, being released in the fall of 2019. The current THC and THCa testing should be pushed to 1% combined threshold in upcoming years, but that will have to happen at a congressional level.
Do you have any advice for anyone entering the industry? What direction would you steer aspiring farmers? Where do you think the industry is headed?
Start small and grow as much as you can invest, without expecting a return til the first quarter of the following year. The future of the industry will come down to supply chain, contracts and relationships. There will always be space for the small craft farmer, but cost will need to be managed while maintaining a superior quality. Competition is going to increase dramatically.
And finally, if there are any people that you’d like to recognize from Fusion or the industry in general that have helped get the company to where it is now……..
This is always tricky to answer. First and foremost I have to thank my wife Jennifer who had the courage to support the vision and move our families into the biggest unknown of our lives. Equally important is my business partner Ed, who works just as tirelessly as I do. The first three years have been very challenging with lots of ups and downs. Through our dedication to one another and the subsequent companies we own, our hard work is paying off. Our current operations are headquartered in both Oregon and New York.