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Georgia's sprouting hemp industry attracts Canadian hemp grower

Georgia's sprouting hemp industry has attracted a big investment by a major Canadian hemp grower.

A new state law signed by Gov. Brian Kemp in May legalized hemp farming in Georgia. Growers licensed by the Georgia Department of Agriculture will soon be allowed to grow and process hemp in Georgia.

Hemp is used to produce cannabidiol, or "CBD", the active ingredient in oil and foods that continue to grow in popularity across the country, but Georgia licenses won't be issued until state regulations are finalized later this year.

British Columbia-based Village Farms International Inc. (Nasdaq: VFF) reported July 11 that the company "is now well advanced in planning and engineering work to establish its centralized [CBD] extraction operations, which will be based in Georgia." The facility is expected to be operational in the first quarter of 2020.

In March, Village Farms formed a joint venture with Georgia farming company Nature Crisp, which has already started to plant 700 of acres of hemp in Virginia, North Carolina and South Carolina, and plans to grow roughly 1,000 more acres of hemp in Georgia in 2020.

Led by University of Georgia graduate Phil Jennings IV and his father Phillips Jennings III, Nature Crisp is one of several of their agriculture businesses. The Jennings family has grown dozens of crops (vegetables, soy beans, corn, wild blueberries, etc.) over the last 10 decades.

Village Farms International gave Nature Crisp roughly $15 million to cover start-up costs and generate working capital. Jennings IV said many of the farmers they have partnered with in other states have taken their knowledge and transferred it to hemp, which is a crop that can be grown almost anywhere.

"We're in this for the long haul," Jennings said. "I think what Village Farms brings to the table and what Nature Crisp brought to the table was a great marriage to be able to build an exceptional outdoor growing company for hemp. My background and my dad's background in outdoor farming stretches back for our entire lives, and then you've got Village Farms that's been an innovator in the farming space for 30-plus years."

Nature Crisp owns 35% of the joint-venture company, called Village Fields Hemp, while Village Farms International owns 65% of it.

Village Fields Hemp is growing hemp across several states, but wants to produce the largest acreage and build a roughly 25,000-square-foot centralized extraction facility in Georgia. Jennings said the facility will be able to extract thousands of acres of hemp grown in Georgia and across nearby states, although the company would need more capital to build and hasn't decided on its exact location.