How Santa Fe Farms is Developing an Industrial Hemp Ecosystem

Santa Fe Farms has its sights set on developing an industrial hemp ecosystem that includes cultivating, manufacturing and combating climate change using regenerative agriculture and by developing hemp-based products and the infrastructure to support them.

August 11, 2021 by Jodi Helmer


When the Agriculture Improvement Act of 2018 (the 2018 Farm Bill) passed, serial entrepreneur Steven Gluckstern knew hemp would be a hot commodity.

Gluckstern purchased a 250-acre farm in Estancia, N.M., and, soon after, purchased a second 270-acre farm in nearby Moriarty, N.M., and started Santa Fe Farms. Although the initial plan was to grow hemp for cannabidiol (CBD), Gluckstern knew he needed to chart a different path if he wanted Santa Fe Farms to be successful.

He also quickly realized that the young industry’s supply chain, or lack thereof, could threaten farmers and the industry as a whole.

As the company’s initial crop grew, so did Gluckstern‘s concerns that there would be a glut of biomass industrywide and a shortage of options to process it. He started exploring options to incorporate processing facilities into his operation as well as developing contracts to purchase harvested hemp.

Over time, Santa Fe Farms has been working to transition from a hemp farm into a business that incorporates all aspects of hemp production and sales, including seed genetics, cultivation, extraction, processing and B2B products for retailers. 

In 2020, its demonstration farms produced more than 200,000 pounds of CBD biomass. And while growing hemp for CBD is an important part of its business model, the company’s focus now is on developing a hemp ecosystem that includes three divisions: growth (cultivation), transformation (decortication, extraction, manufacturing, equipment) and impact (hemp-based products and advanced carbons).

“The future, from my perspective, was not going to be in phytocannabinoids; that was an interesting way to get started, but it was really going to be the industrial uses of this plant that were going to drive the industry,” explains Gluckstern, Santa Fe Farms’ co-founder. “I’ve now dedicated the last three years to putting those pieces in place to build an integrated … enterprise in all aspects of growing this plant and how it affects the environment.”

“Even though the company started by growing hemp for CBD, we realized that we would be moving into industrial hemp,” echoes Chief Global Engagement Officer Deanna Byck. “So while this year much of what we are growing is CBD, we are also growing industrial hemp on our demonstration farms in New Mexico. Much of what we grow in the future will be industrial hemp, and we will work with our farm partners and especially our partners in Indian Country to grow much of it.”

Growth: Elevating Farmers

In addition to growing hemp on its own farms, Santa Fe Farms has partnered with farms in California, Oregon, Colorado and Kentucky as part of the company’s Farm Partner Program—another prong in the company’s goals to help build out a supply chain.

“The supply chain [for hemp] was never really fully formed, and one of the big things we set out to do was to reestablish the farming network,” explains Isaac Cohen, president of the company’s cultivation division. “There was a lot of hype in 2018, but many hemp farmers had one or two disaster crops, and we realized if we didn’t help turn it around and start working with farmers, most would go back to crops they used to grow.”

The new Farm Partner Program created a network of partner farmers and provided those partners assistance with access to genetics, processing facilities and warehouses.

“We know the success of the hemp industry starts with farmers,” Cohen says. “We’re not trying to own all the farms; farmers have infrastructure and labor, and we’re helping them plug in the hemp component.”

“Our roots will always remain in understanding that cultivation needs to work, and we need to be able to grow hemp—and farmers need to be able to make money growing it,” Gluckstern explains. “But we have a supply chain … problem. You have to make money at every step of the supply chain, [and] if one of those steps breaks down, that entire supply chain breaks down … and then we don’t have an industry.”

Transformation: Post-Harvest Scaling

To help ensure that supply chain supports the hemp grown on the company’s and its partners’ farms, Santa Fe Farms’ processing division now manages decortication, extraction and manufacturing.

“We realized that … it wasn’t about any [one] part of the supply chain; it was about the entire supply chain,” explains Byck. “Every part of the supply chain is super important, whether it be the farmer or the processor, or even the people who are providing the contracts; the more people work together, it creates a better, stronger industry.”

That realization is what led to a significant evolution since the first hemp crop was planted in 2019, and it helped steer Santa Fe Farms’ transition from a hemp farm to a more diversified business.

As part of that diversification, Santa Fe Farms acquired High Grade Hemp Seed, a global provider of hemp genetics, this year. This and another acquisition—of Center Pivot Group, which focuses on promoting best practices in industrial hemp production—allowed the company to create small circular economies nationwide. The goal ties back, again, to building the supply chain infrastructure: provide farmers with seeds, information about regenerative growing practices and leads, as well as provide processing and help with securing contracts.

“We figured out that if we helped the farmers decide what to do with their products, it would benefit everyone,” Byck adds. “Instead of squeezing out the competitors, [we worked] with farmers with the notion that … helping farmers amplify what they’re doing means we don’t miss out on any part of the supply chain.”

Gluckstern admits that the model is a departure from his original plan for Santa Fe Farms, which included prioritizing land acquisition and cultivation.

“As opposed to three years ago, when I thought, ‘We’re going to have to own lots of farmland,’ I’ve progressed to a view that says, ‘We want to work with farmers all over the world, help them with standard operating procedures, help them with genetics, basically help them make sure that their offtake can get purchased,’” he says.

“There is revenue to be earned in this industry right now, but the long game is the trillions of dollars in displacement of different products, which is going to take time.” —Kimberly Kovacs, chief strategy officer, Santa Fe Farms

Impact: Product Development and Building a ‘Carbon Company’

Another significant shift is that Gluckstern no longer sees Santa Fe Farms as just a hemp company, despite its involvement in all aspects of hemp production, from genetics and cultivation to processing and sales. Instead, he calls it a “carbon company.”

“One of the people that we worked with early on had been whispering in my ear, ‘This plant has … the ability to sequester carbon,’” he recalls. “That was the moment I realized there was something much bigger to the story than just an agricultural product that’s been around for 8,000 years; I realized this product has all of this potential, but most importantly, it has the potential of being a tool in the fight against climate change.”

The European Industrial Hemp Association estimates that a single acre of industrial hemp can sequester 15 metric tonnes of CO2 per hectare (the equivalent of 6.7 tons per acre), which is higher than any other commercial crop.

As a carbon company, Santa Fe Farms is focusing on the long game, not the immediate opportunities.

“There’s a lot of companies that get started in emerging industries like hemp [that] … go after the opportunities that they see right in front of them and don’t step back and look at … where new opportunities could exist or different strategic relationships or alignments that could happen to actually expand the market substantially,” explains Chief Strategy Officer Kimberly Kovacs, who joined the company in June from her former position as CEO of Arcview Group, an investment and market research firm servicing cannabis and hemp businesses.

Santa Fe Farms wants to reduce carbon with hemp beyond just growing it. On a strategic level, Kovacs hopes hemp can be used to replace trillions of dollars of products that are harmful to the environment, including paper, plastic, building materials and animal feed, to reduce the global carbon footprint.

But before Santa Fe Farms can begin approaching large companies, such as an Amazon or a Coca-Cola, to offer hemp-based solutions, the company needs to fully build out a scaled supply chain that can withstand the demand.

“Imagine if you could convince Amazon that their hundreds of millions of boxes that should be made of hemp and not timber—and I could convince them of that—their first question is going to be, ‘Can you provide me hundreds of millions of boxes [made of] hemp? Because if you can’t, how can I rely on that as a solution?’” Gluckstern says.

In July, Santa Fe Farms brought on Dr. Stuart Cowan, Ph.D., as the company’s chief science officer and president of advanced carbons. Cowan will focus on regenerative agriculture and “premium-grade nature-based carbon offsets,” Byck says.

“As we build out our state-of-the-art facility and work with the leadership we have assembled, will be able to transform hemp into products that will eventually replace plastics, paper and building products,” Byck continues.

Santa Fe Farms’ products division is exploring avenues to create multiple products using hemp, she says. Categories that show promise are health and wellness, nutritional products for humans and animals, packaging, paper and pulp, animal bedding, building products, carbon-sequestering biochar, and bioplastics.

As part of the products division, Santa Fe Farms is introducing the idea of “regenerative refining,” a paradigm shift from replacing products that put carbons into the atmosphere to creating products such as biochar, which sequester carbon in the ground and have the ability to generate a cleaner, safer and more sustainable future. Santa Fe Farms’ expertise in this area will enable the most environmentally sustainable processing method while making full use of the many hemp processing derivatives, says Byck. The company’s leadership maintains alternative hemp derivatives will overtake today’s phytocannabinoid-rich wellness and medical products in importance. To that end, the company is constructing a “regenerative refinery” that it expects to be a technologically advanced extractor, processor, manufacturer, and hemp research facility.

Efforts to bring hemp into the folds of these product industries will be guided by multiple experts, Byck says. Hunter Buffington, executive director of the Hemp Feed Coalition and Santa Fe Farms’ products division vice president and director of policy and advocacy, has been working diligently to convince the U.S. Food and Drug Administration to approve hemp for use in animal feed, she adds.

While building a hemp economy and a global carbon company is possible, it’s going to take strategic planning and patience along with farm subsidies, hemp-friendly regulations, ongoing research, and alliances with farmers and industry partners.

“I’m here to introduce hemp as a solution to industries that are our biggest carbon contributors, … to work with these industries to say, ‘How can we start addressing your problem today without disrupting your supply chain?’” Kovacs says. “This is not about running out and going public tomorrow. … There is revenue to be earned in this industry right now, but the long game is the trillions of dollars in displacement of different products, which is going to take time.”


About Santa Fe Farms

Location:

Headquartered in Santa Fe, with locations in Estancia and Moriarty, N.M.

Total Farm Acreage:

520

Number of Employees:

64

2021 Hemp Crop:

200,000 pounds of biomass, plus industrial hemp being grown on the company’s demonstration farms

Processing Capacity:

Santa Fe Farms works with processors and extractors across the U.S. to process CBD, CBG and industrial hemp. The company also expects to soon begin construction on an ecologically and economically efficient “regenerative refinery” to extract, process, manufacture and research hemp.

Products:

Currently producing CBD products; the company’s products division is working to develop health and wellness products, nutritional products, animal bedding, bioplastics, building products and biochar.


Fast Take with Steven Gluckstern, Santa Fe Farms co-founder

Biggest challenge in launching or maintaining a hemp business:  

“This industry is so new, it’s hard to predict where and when you should do any particular activity or investment. “

What hemp farmers should know when going into the business:

“This is a nascent industry, and as such there will be lots of twists and turns, [but] I believe that flexibility and the ability to adapt are going to be critical for anyone’s success in the long term.”

On how hemp will scale:

“I actually think it will scale quite easily once the demand is established and once we have a real supply chain. It’s a relatively simple crop to grow once you develop your [standard operating procedures], and it does not require a lot of high technology for processing; it requires basic technology, so I am optimistic that it will scale quickly and well.”

Advice for other hemp business owners:  

“Make sure you have adequate capital to see your plans to the conclusion. [The hemp business] requires perseverance, and the nature of a new industry that’s growing will require adaptability—and you have to maintain that adaptability as you grow. I do think there are challenges: As anyone in the farming industry knows, … you have to be able to roll with the punches.”

Deanna Byck

Deanna Byck

Chief of Staff, Santa Fe Farms