Kentucky growers cashing in on hemp byproduct as crop makes huge comeback in state

Published: Jul. 23, 2018 at 5:53 PM EDT
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Hemp is making a huge comeback in Kentucky.

Federal and state legislation passed in 2014 says hemp can be grown and marketed in states with pilot programs. Four years later growers in the state are seeing big profits from extracting something found in the plant and turning it into a highly sought offer oil that some claim holds real health value. The sale of what is known as CBD oil is estimated to explode by 2020.

Inside one Lexington business is something many are learning is the key to their health and feeling better.

"People come in here for a variety of reasons," said Adriane Polyniak, owner of

Business is booming at Bluegrass Hemp Oil, a company born out of necessity for owner Adriane Polyniak after her son was diagnosed with epilepsy and debilitating seizures in 2009.

“We went through this pharmaceutical roulette where we tried to get him regulated on those different pharmaceuticals and had him dealing with a wide array of side effects," said Polyniak.

She found relief for her son in a product derived from hemp, CBD oil. People have found relief from a number of ailments by using it.

Polyniak believed in it so strongly that she and her husband quit their jobs and in 2014 invested in growing hemp and now processing the oil.

The Polyniaks own and operate Bluegrass Hemp Oil in Lexington.

Polyniak took advantage of the state legislation that set up a pilot program for hemp crops in the state, and then in 2014 the federal Farm Bill opened the door for the legalized cultivation of hemp in states with those pilot programs.

Her customers are now proof that CBD is changing lives.

"I think the most we've seen of daily pharmaceuticals that they have been able to reduce was ten, so it is definitely making a difference in people’s lives," said Polyniak.

There is still a misconception between hemp and marijuana. Hemp grown in Kentucky is under strict guidelines that the THC level (what can make you high) must be under .3%, and if not, it is destroyed. Marijuana carries a 20-30% THC level.

CBD oil is made from extracting one of several cannabinoids from the plant.

In Harrison County if you take a walk in one of Brian Furnish’s fields you will find a crop of hemp recently planted that will be harvested in September for the use high end clothing.

Furnish was very active in helping get hemp legalized for growth in Kentucky. He says he is one of 250 growers and 75 approved processors in the state's pilot program. Last year Furnish says Kentucky farmers were paid $18 million for their crops.

"My family will make more money growing hemp this year than they will tobacco, and it's the first time in eight generations since back in the late 1600s we've been dependent on tobacco," said Furnish.

Last year Furnish says his hemp crop cleared about $2,500 an acre on average. Hemp grows fairly easily in Kentucky and its success in the last three years has attracted global investors. In 2018 more than 12,000 acres have been approved for hemp crops.

“Here in Kentucky, we have worked hard with the law enforcement community to prove we can have an industrial hemp research pilot program that is consistent with the law,” said Kentucky Agriculture Commissioner Ryan Quarles. “I am proud of the relationship we have built.”

Hemp grows fairly easily in Kentucky, and its success in the last three years has attracted global investors. Companies like Ananda Hemp have invested $30 million over the last two and half years in what Furnish and other farmers are doing in the Bluegrass.

"I have to say hands down from an industrial hemp's point of view Kentucky is the cutting-edge place to be, we’ve deployed probably 80% of our capital here," said Eric Wang, CEO Eco Fiber.

What was just a slab of concrete in 2015 is now ground zero for

just outside Cynthiana. Ananda grows hemp for seed which will become food products, for fiber that will become clothing and they also extra the cannabinoids for the oil.

The company created just over 20 new jobs and inside their state-of-the-art lab where Ananda takes hemp grown by Furnish and others and turns it into CBD oil.

"So right now, our products are full hemp extract off the flower and its classified as a dietary supplement," said Wang.

We wanted to see the process for ourselves, Eric Wang says we should think of it like brewing tea. The process starts with the green material much like what's inside a tea bag. The green material starts off in a raw form where the hemp flower has been chopped up and dried into finely ground mixture. It resembles what you would find in a tea bag.

"And then we take it and dip it into a solution because we want to get the resign off the plant, that's where the medicinal value sits," said Wang.

It is then distilled and separated again because Wang says it will still have some plant matter and waxes in it so they will then do a final cleaning of it and the end result is a thick liquid gold in a bottle.

Just outside of the lab the product is packed up and shipped all over the country. While CBD is expected to be a two billion industry in two years, Wang says we have only seen one percent of what is possible for hemp.

"Everyone right now for the most part is chasing what we call CBD. In ten years from now industrial uses is the biggest part of our business, food is second and CBD is third," said Wang.

And Kentucky has a chance to cash in on crop making its comeback in the Bluegrass. Right now, the 2018 Federal Farm Bill is currently in conference committee in Washington D.C. and is being closely watched here in Kentucky. Growers like Furnish and Polyniak both hope to see it legalize the production of industrial hemp and see restrictions lifted on industrial hemp, namely seeing removed from the list of controlled substances and treat it as an agricultural commodity.