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Colorado firm is bringing CBD oil processing to Michigan City


MICHIGAN CITY, Ind. — In at least one Indiana community, workers earning $20 an hour will be processing industrial hemp to be planted by area farmers in the coming weeks.

PHM Brands, LLC of Denver, Colo., is expanding its food and specialty oil-making operations to Michigan City under an Office of Indiana State Chemist (OISC) license issued in February. According to the company, hemp seedlings will be given to local farmers to raise and deliver to the plant for processing into cannabidiol, or CBD, oil.

Such job creation might be just the beginning in Indiana, where 100 farmers will grow the non-psychoactive cannabis plant under research licenses issued by the OISC. The licenses allow hemp to be grown as long as the producer is paired with a researcher – likely from Purdue University – said Jeff Cummins, general counsel and director of public affairs for the Indiana State Department of Agriculture.

The hemp to be grown this year can also be used commercially under the research licenses. There are no limits on acreage or production.

Cummins said getting started now is part of the groundwork being established for hemp to be grown and processed in the state on a larger scale. “We really have our eye on the ball for 2020 as a full commercial growing year,” he explained.

The Indiana House Agriculture Committee on April 4 approved the commercial production of industrial hemp in legislation that passed the full Senate almost unanimously. Cummins expects the measure to pass both chambers before the legislature adjourns on April 29, and be signed by the governor.

PHM Brands was awarded tax abatement April 2 on a $6 million investment, just a few hundred yards from the Lake Michigan shoreline. The company plans to process hemp at the former Prinova wheat germ plant along U.S. Highway 12 and the old ITW Red Head manufacturing facility directly across the highway.

The path for commercial production here and elsewhere was paved by the 2018 farm bill that delisted hemp as a controlled substance and authorized states to implement their own hemp programs under the supervision of USDA. Hemp being illegal under federal law until December passage of the farm bill was a major source of reluctance at the Indiana Statehouse, for allowing it to be grown commercially.

 “We were very excited about the farm bill coming to pass and giving us this opportunity to repurpose this facility,” said Bill Streeter, chief financial officer for PHM Brands, in comments to the Michigan City council just prior to the request for tax abatement being approved.

PHM Brands is affiliated with companies like Panhandle Milling, New Mexico Milling, Specialty Grains, Specialty Feeds, and Viobin. Flour, wheat germ, and specialty oils are its signature products.

Chris Hurt, an agricultural economist at Purdue University, said a processing plant emerging so quickly shows potential for a new industry – but it’s too early to predict the impact hemp might have here on agriculture, and the economy overall.

If the state bill becomes law, his vision is of commercial hemp production growing fairly quickly, then tapering off to more of a substitute crop for Hoosier farmers looking to improve their bottom line. He said hemp could become valuable enough to help reduce the glut of corn and soybeans on the market, if enough farmers take a percentage of their land now dedicated for grain and use it to grow the cannabis.

Just how far it goes, though, will hinge on consumer demand and markets created for the wide variety of hemp-based products.

“I wouldn’t tout it as this is going to be a major industry on the magnitude of our traditional commodities like poultry, pork, beef, corn, and soybeans and wheat. It’s another opportunity to expand economic opportunity in the state,” Hurt explained.

Cummins said all the regulations for growing and processing hemp in Indiana are still taking shape and must be approved by the USDA before the first seeds can go into Hoosier soil. The regulatory scheme will include enforcement to make sure tetrahydrocannabinol (THC) levels in the hemp being grown is below 0.03 percent.

He said growers under the existing licenses must submit research and marketing plans for consideration by OISC. “Once approved, they can get their seed and get going.”