“Good things like this don’t happen to people like me.”
Those were Matt Miles’ first words when we sat down for coffee and a post business sale conversation Monday morning. The bigger than life developer was two weeks down the road from his rather sudden, and welcome, sale of General Processing. General was Miles’ hemp processing creation that he built from the ground up, on the premise that the legal obstacles to the hemp industry were being removed. Market forces and a less-than-stellar regulatory climate left the three-year venture way short of what business veteran Miles expected. By October of this year, in the middle of the 2020 hemp harvest, he realized that the “force” was not with him. He was looking at pulling the ripcord and stopping the free fall in which the hemp and CBD oil industry had put his enterprise.
But good things do happen to people who work hard and do the right thing. Miles had invested the time, energy and finances to put together a fully functional, safe and state-of-the-art hemp processing plant. The General team had even developed a chemical process to take potentially hot hemp and produce legal and marketable CBN oil from it. They were the leaders in that field. And some folks noticed.
“I got a call in late October, which I actually missed and didn’t return until the next day,” says Miles, who is known for returning calls quickly, even to newspaper columnists. The call was from an executive at EcoGen BioSciences, a subsidiary of Newport, California-based Kadenwood, LLC, a vertically-focused company dealing in hemp and CBD.
“First, they wanted to know if they could rent our facility. I said no, but I would sell it to them. They were on that immediately,” Miles says. The BioGen people showed up at the General plant the next afternoon and looked over the facility. Miles says that he went to Grand Junction that night and met with them. BioGen is based in Grand Junction.
Within a week, the BioGen team had 70 people working in the General Processing facility under a licensing agreement. “It was interesting to watch,” Miles says. “They had upper level, mid-level and ground-level management in the plant. These guys were thinking on a whole other level.”
To hear someone like this highly successful developer say that he is homeless, elicits a laugh of course, but for Miles, who spent 12 hours a day, seven days a week for the past two-plus years to suddenly find himself out of the grind of trying to make sense of a runaway industry, he says that he feels a little lost.
When the deal closed, Miles was given a seat on the EcoGen board and he turned over the GP plant to the next generation. He says what happened to him is an indication of where the hemp business is going for the time being.
“It’s a consolidation process, which I thought would happen, but it happened more quickly than I thought it would,” Miles added.
With the industry stalled by an oversupply of hemp and oil, companies with the financial ability can buy plants like General and withstand the slower times until the CBD market finally explodes. Miles says Kadenwood and their subsidiaries have the people and the staying power to be there when that happens. And he thinks that it will.
But how did we get to this point? Why did an idea and a product with such promise suffer the setback, putting a lot of people in financial harm’s way?
“It is very simple. The circle was never completed,” Miles says. “We had the ability to grow hemp, to process it, to produce CBD oil, and to meet the demand, but it never really became fully legal to sell it.”
Miles says that he was in Michigan at an equipment showing for the first piece of extractor equipment for the General buildout, when President Trump signed the 2018 Farm Bill that was supposed to remove the obstacles to good fortune from the hemp path. Everybody got on board but the regulators.
“Everybody thought, including myself, that CBD was going to be legalized. The bill made such a robust statement that everybody jumped in. But to this day, the rule making procedures have not been completed,” Miles says.
The Department of Agriculture charged with doing the rulemaking has yet to complete, or even agree on the content of operational rules for the industry. Further, the Federal Drug Administration has virtually refused to give CBD oil the green light in the marketplace. There were some failures at the state level as well.
“So, the supply overwhelmed the ability for the market to handle it,” Miles says. He adds that he doesn’t really know what all the agencies are that must come into line to produce a viable market, “But we are not there.”
Miles says that he has not been to the General plant in almost two weeks, but he feels good about the BioGen team. He does not think much about what has happened and he is financially pleased with his outcome. But, when pressed for his thoughts on hemp in the Uncompahgre Valley, he has a few. When I asked him if he had any regrets his pause was lengthy.
“My only regret is that I wish things had been better for the valley and for General. For me personally, no regrets,” he says. Miles adds that there were some who took advantage and who over-promised. That hurt people and businesses in the valley. “When a guy shakes my hand and promises me a million pounds of processing and never follows through, that’s bad for everybody.”