(WGHP) — As a successful lawyer, Bob Crumley is used to analyzing situations. He thought he’d analyzed the hemp industry well, but his venture into it cost him and some fellow investors plenty.
First, a bit of history. In 1937, cultivating hemp became illegal. There are a lot of people who can’t figure out why. The first five US presidents all grew hemp, it produces not just one of the most durable textiles in the world and products can be derived from one of its elements – cannabidiol, which is commonly referred to as “CBD” and has shown great promise as nutritional supplements.
So with that concept of early US presidents being in the hemp industry, Crumley named his company “Founders Hemp.”
A little more than five years in, he’s selling what’s left of the company to a bigger conglomerate out of Chicago. The industry collapsed with shocking speed.
“It almost like it became so big so fast that it just imploded,” Crumley said. “Everybody saw a dollar sign.”
That’s something that North Carolina Agriculture Commissioner Steve Troxler warned people about: the fact that when farmers in America see a profitable plant, they’ll overproduce it.
“There are still farmers farming hemp. There are still folks that are extracting and making new products, but the number of products is certainly not out there,” Crumley said. “At one time, before what I call ‘The Big Crash’ in 2020, there were 22,000 hemp brands in the United States. In 2020, if every human being took a 25mg CBD capsule in the United States every day, we would need somewhere between 88 and 108,000 acres of hemp. That year, 550,000 acres were farmed. So you saw the price of hemp go from $40 to $50 a pound down to $2 to $3 a pound.”
But, as Crumley said, Commissioner Troxler helped them anticipate that. But there were other factors at work.
“What we did not anticipate is what the FDA did. When you take the oversupply in the market, we think we could have sustained that. But when you take the FDA’s unwarranted – and quite frankly if it had been on my shoes, illegal – actions, it just was a big, huge hit,” said Crumley about an announcement from the Food and Drug Administration that hinted at potential harm from using hemp products.
From Crumley’s point of view, it comes from a culture at the FDA in which natural supplements are discounted to the benefit of pharmaceuticals.
“(The FDA has) tried to take this…natural product and give it to the pharmaceutical companies,” he said.
See what drove Crumley into the hemp business in the first place – it wasn’t to make money – and what one of his last products is in this edition of the Buckley Report.