ROSEBURG, Ore. — After numerous talks over two years, KJG Resources was formed and the partnership company diversified into the hemp industry in 2019.
The partners are brothers Brant and Wes Guido, Matt Jacobs, Blake Kennerly and Mitch Gomes. The partnership had a contract to provide 100,000 pounds of clean, dry hemp to Oregon Fusion, a Portland-area company that brokers hemp.
The partners planted 83,000 plants on 38 acres a couple miles west of Roseburg. The fall harvest produced 125,000 dried pounds of hemp.
“Overall, we made money,” said Jacobs.
But that hasn’t been the case for everybody who jumped on hemp’s so-called “gold rush” in the last couple of years.
The KJG Resources partners said they were successful with their first crop because they had a contract that paid them half upfront, they had land and they had some equipment such as tractors and trucks that were needed during the growing and harvest processes. The Guidos and Gomes are also in the sand and gravel business and Jacobs and Kennerly are in the livestock business.
Jacobs said the infrastructure to dry a large volume of hemp wasn’t available in Southern Oregon so the partners used the upfront contract money to purchase hop fans and burners. They constructed a drying facility that could process 22,000 to 25,000 pounds of dry hemp a day. They not only dried their own crop, but eventually dried about 800,000 pounds of hemp from about 600 acres.
They also leased a harvester that could harvest three or four rows of hemp in one pass. The decision to use a harvester came a year after Jacobs and Kennerly had manually harvested a handful of acres and discovered how physically demanding it was.
“Having a contract made us successful, having a dryer made us successful and having a harvester allow us to get through the field in a timely manner,” Brant Guido said. “The harvester could do the work in a day of an 80- to 100-man crew.”
The partners said the downfall for many first-time hemp growers was the lack of a harvest and drying plan to get their crop processed on time and properly.
“Anybody who wants to grow hemp needs to come up with a comprehensive business plan and consider all costs,” Jacobs said. “Very, very few people did that. Everybody thought they were going to get rich, that they could do very well, but you have to have the infrastructure in place.”
KJG Resources already has a contract to grow about 50 acres of hemp this year. The partners plan to grow only what they have a contract for.
“If we hadn’t done this last year, I wouldn’t be growing hemp this year,” Brant Guido said. “But we have the infrastructure, the experience, the contract. Otherwise, we would not be successful.”
Guido also noted there is uncertainty in the hemp market with the price having been $100 for a dried pound three years ago, then $50 two years ago and down to $6 in 2019.
He said there are at least a couple factors that will impact the price of hemp in future years: Other states legalizing the growing of the crop and increasing the supply, and USDA approval of using CBD oil as an ingredient in numerous foods and drinks.
“The people who are going to succeed at this are the agricultural farmers who already have the ground and crop experience,” Jacobs said. “People paying horrendous leases for land just aren’t going to make it.”