Hemp is a young industry and – along with cannabis – it’s going through a period of rapid change when it comes to regulation, legality, and acceptance by society. This means that for anyone involved in the hemp business there’s a lot to learn and some unique challenges to overcome, particularly with hemp brokerage.
At Higher Yields Consulting, hemp brokerage services are just one of the ways we help growing hemp businesses navigate this fledgling industry and deliver the many benefits of hemp to the market.
Whether you’re trying to sell your hemp and lock in a profit before you harvest or you’re looking for supply but you’re not sure where to turn to get the highest quality goods, working with a consulting firm that manages deals and establishes relationships can be the key to your business’s success.
So how does hemp brokerage work and how can it impact your growing hemp business?
One important point to clarify is the difference between cannabis and hemp from a brokerage perspective.
Hemp and cannabis share similar challenges and a similar process when it comes to growing, manufacturing, and selling, which looks like this:
Another important similarity is that both hemp and cannabis have been illegal in the U.S. until relatively recently, which creates a series of shared challenges around regulation and legality.
Hemp has a broader range of uses compared to cannabis. If you’re still toying with the idea of building a hemp v.s. a cannabis business, consider the vast possibilities of hemp.
Hemp has a higher cannabidiol (CBD) content than cannabis, which makes it well-suited for CBD extract. It also has multiple uses when it comes to cosmetics, building materials, textiles, and producing seed. It’s important for growers of hemp to get clear on what they want to focus on before building out the business plan, branding, marketing, sales, and facility operations.
One of the most important differences for business is legality. Hemp today isn’t as strictly regulated or criminalized as cannabis, which means there are more opportunities when it comes to retail and the possibility of global e-commerce.
Once you’ve clarified what kind of business you want to build, one of the most important next steps is to consult with a broker.
A hemp broker’s job is to act as the middleman between buyers and sellers of hemp. As a hemp business, you’ve likely experienced the challenges of building strong business relationships with others in the space. That’s where a good broker comes in.
Perhaps the most important thing to note about hemp brokerage is that it’s evolving. Buyers are constantly looking for product to sell in their retail facilities or to manufacture from, and the opportunities are changing all the time.
For sellers, our advice would typically be to get a contract before you put a seed in the ground. You can make deals before you seed or after harvest, but it’s far easier to anticipate and control costs if you have a contract in place from the get go. This will allow you to plan the entire process much more tightly and maximize your profit.
Don’t harvest without having a deal in place and then try to get one afterward. If you need help securing a deal, chat with an experienced hemp broker.
Hemp brokerage is an international industry, which means your opportunities as a hemp business owner aren’t confined to the domestic market. Although business is still mostly based at home, we work with suppliers and buyers around the world, from Europe to Asia.
If you choose to expand overseas, there will be obstacles to overcome related to costs and regulations. The rewards can potentially be great, though. In fact, it’s estimated that 40% of CBD in the U.S. is currently imported to the tune of $70 million per year.
Whether you decide to focus your business on U.S. soil or venture into the international market, a well-connected hemp broker can guide you.
There’s a lot to keep in mind and hemp can be a challenging industry. So what does it take to make it? In my experience, there are two key factors.
The first thing you need to make it in hemp is passion.
This isn’t an easy industry to get started in – much due to the current lack of FDA regulations, which makes for a minefield of pitfalls and constant changes to adapt to.
To succeed (and deal with all those nasty regulatory headaches), you’ll need to inject a dose of passion into your business.
Find a reason to care. For example, my motivation is my family. I have several older relatives who are benefiting greatly from CBD products, and I’m driven to nurture this industry so it can help many others like it has helped those I love.
Let your enthusiasm about the business shine through in everything you do. Infect everyone else with your passion and energy. The more you touch others’ lives, the more that positive momentum will bounce back and keep you going.
Also, be sure to hire people who care as much as you do and see hemp as more than just a job or a trendy commodity. Ask everyone you consider hiring why they’re interested in this work. If their answer doesn’t make you smile, they may not be right for your team.
If you treat hemp as just a business and don’t see any meaning or purpose in it, there’s a good chance you’ll burn out quickly from the frustration and stress that makes up a core part of this infant industry.
The second thing you’ll need to make it in hemp is education – constant education. You have to know the crop and the industry inside out.
Hemp is a new venture, with a unique crop and product. Trying to apply the same farming techniques used for corn and soy to hemp is not going to end well.
Less than one-sixth of the hemp crop grown in Wisconsin in 2018 was usable. It’s a challenging crop that even experienced farmers see fail, but there’s also serious potential for those who put the time in to get to know the crop.
Keep in mind, there are numerous requirements to get started that you’ll need to learn before jumping in – like equipment, registration fees, and reliable THC testing.
Recently, we helped a 20-acre crop business scale to 600 acres. It’s not as simple as multiplying everything by 30, but it can be done if you know what you’re doing and you take the time to be on a constant hunt for new information and education.
Take time to educate yourself and learn what you need to maximize your profits.
At Higher Yields Consulting, we support our clients from seed to sale. We work with first-time farmers and experienced business owners, helping them hit their goals.
Hemp is a new industry with a huge amount of potential. We’re living through a crucial stage where we have the opportunity to lay the foundations for something that could last generations.
Hemp businesses like yours could grow into something special and we want to use our brokerage services and other tools to make that happen.
Reach out to us to schedule a free consultation to learn more about building a business in hemp or how hemp brokerage could help support your existing business.
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