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In October 2021, Higher Learning LV conducted an exclusive interview with hemp pioneer and entrepreneur Richard Rose. Rose, currently retired in Italy, remains active on social media and publishes The Richard Rose Report.
Other popular articles in the Higher Learning LV Interview series include:
Image courtesy Richard Rose
Below, Rose describes his decades of experience in building, operating, and successfully selling innovative consumer hemp brands, with plentiful advice for those wishing to enter the industry. He details the challenges of creating successful B2C hemp and health brands in segments that feature significant stigma or where no segment previously existed.
The Interview
Higher Learning LV: "For nearly four decades, you have been at the heart of the resurgence of legal hemp in the United States, Richard. How do you interpret the current legal status of the herb? What are some of the positive and negative elements of the 2018 Farm Bill, in your opinion?"
Richard Rose: "While hemp legality has never been better, the practice of hemp production and marketing is highly flawed and unsustainable right now. Cultivation acreage is down substantially in the United States. Many are losing entire crops due to noncompliance. And the CBD fixation is hurting everyone.
"After pushing for one percent maximum THC in hemp for many years [as opposed to the current 0.3 percent rule that differentiates hemp and cannabis], I see people are finally starting to come around. CBD and CBN are a thing now, providing more income streams. This is a slow brick-by-brick dismantling of the war on drugs."
HLLV: "Tell our readers about HempNut and how you've been able to brand your hemp projects to benefit consumers and patients while also building a real company that stimulates the economy."
"I was the first to successfully market branded perishable foods made from hempseed to the masses. This proved the viability of a new industry. It also began to change society's stigmas. The revolution in food I started became hemp's first billion dollar segment. Today, it is 90 percent of Canadian hemp.
RR: "We were the first to successfully market branded perishable foods made from hempseed to the masses. This proved the viability of a new industry. It also began to change society's stigmas. The revolution in food we started became hemp's first billion dollar segment. Today, it is 90 percent of Canadian hemp.
"HempNut, Inc. was the pinnacle of my food branding career. It was the first hemp food company to embrace best practices. Our vegan organic Hempeh Burger had an FDA-legal health claim for reducing the risk of heart disease.
"A few other HempNut brand products featured legal structure-function claims. I continued the trope I started in the 1980s with tofu, Americanizing new vegan foods to make them culturally accepted and palatable to North Americans (Canada represented one-third of our business).
Image courtesy Richard Rose
"What is today called Hemp Hearts was in the '90s called Hemp Nut. It was considered so generic as to be unworthy of a trademark. Yes, so generic that almost no one uses it to this day! I got five trademarks on it anyway.
"In 1994, I leveraged my supply and distribution network to get a hemp product on thousands of store shelves across the U.S. and Canada. That, along with positive media attention and magazine and newspaper stories, helped normalize cannabis to many consumers.
"It may have had a small hand in normalizing cannabis enough to help Proposition 215 [the nation's first state-level medical cannabis law] pass in California in 1996. Serious articles on hemp in the business and cooking pages of newspapers made it less intimidating to the average consumer.
"But then the market for hemp food died for two and a half years because the HIA [Hemp Industry Association] sued the DEA [Drug Enforcement Administration] to stop legalization. In light of this—and flush with millions of dollars after selling my Rella Good Cheese Company—I retired to Amsterdam.
"In 2014, I was approached by three of the largest CBD companies to start the Medicinal Hemp Association, with the goal of advocating for and protecting CBD hemp companies. That's when I started to educate about CBD.
Image courtesy Richard Rose
"In 2015, I created Nobacco and Not-Pot as open-source brands to illustrate the concept of smokable hemp, or what I call Hemp 4.0. Fiber is Hemp 1.0, seed as food is Hemp 2.0, and CBD is Hemp 3.0.
"Most recently, I launched The Richard Rose Report to give back to the hemp community and keep my mind active."
HLLV: "You've gained some notable media exposure during your career for many of your hemp products and companies. What are some of your most memorable media appearances?"
On The Roseanne Show in 1999, we made a HempNut potato salad. Roseanne and I were both dressed head to toe in hemp! The Tonight Show with Jay Leno did a handful of jokes about me and my products, including a skit with Tommy Chong.
RR: "On The Roseanne Show in 1999, we made a HempNut potato salad. Roseanne and I were both dressed head to toe in hemp! The Tonight Show with Jay Leno did a handful of jokes about me and my products, including a skit with Tommy Chong. There was also coverage by CNN and in Rolling Stone Magazine, New York Times, Details Magazine, Better Homes and Gardens, High Times, and several hundred newspapers.
"In 1995, we spent more than $230,000 on PR and advertising to make hemp foods a thing. That's why so many jumped in. We made it look bigger than it actually was to drive consumer acceptance of a new food made from marijuana's non-stony cousin. Only after HempNut, Inc. won its first three awards for hemp product innovation in 1997 did today's companies get inspired by this business model."
Image courtesy Richard Rose
HLLV: "What advice would you give to the thousands of newcomers to the hemp industry, Richard, which has been analogized to a gold rush? Is there truly gold in those hemp hills for small businesses and solopreneurs?"
RR: "Today, while the field is still wide open, hemp suffers from misinformation. Those with the correct information are ignored, shouted down by those who are louder—but not smarter. Single farms can't muster the infrastructure investment necessary for the right agricultural equipment, processing services, and brand management.
"In Kentucky, four of the largest hemp companies went bankrupt, with one sucking as much as half a billion dollars out of the local economy. That was a failure of management, incentivized by the venture capitalists funding the project.
"CBD has a number of issues. Smokable hemp as well. Eventually China will own the CBD market, while smokable hemp has the potential to improve public health more dramatically than few other substances in history.
"That the tobacco heirs wanting to heal generations of death karma didn't jump all over that is odd. They had the political power to kill state laws banning hemp and could have made the segment huge. Instead, they got into boring CO2 CBD extraction or whatever.
"Fiber is still trying to find its commercial legs, leaving seed as the easiest to leverage since it is an existing segment with decent volume. But it is hard to go it alone for most companies. Thus the need for co-ops to organize thousands of acres within a few hours' drive of a processing plant.
"Fiber is still trying to find its commercial legs, leaving seed as the easiest to leverage since it is an existing segment with decent volume. But it is hard to go it alone for most companies. Thus the need for co-ops to organize thousands of acres within a few hours' drive of a processing plant.
"If farmers can organize into a co-op that buys the equipment and processing capacity, and if they can get enough acres nearby, and if they can do field trials to determine the best varieties, and if they can develop a great brand and not just sell hemp products B2B, then they have a decent shot at success.
"The other beauty of doing a hemp food business is that the field is wide open and you don't need much more than a phone and an email account to do it. For instance, you could get into marketing ready-to-eat meals made for you that contain five to 10 percent hemp, such as chips or bars or burgers. Just private label it from others or buy in bulk and have it packaged yourself. Use co-packers, common carriers, public warehousing, and sales brokers and you won't need much more than a spare bedroom to run it.
"That's what I did for years when building an Inc. 500 company in the 1980s that sold America's most-hated food, tofu. I started it on $400 and sold it 15 years later for $3.7 million. All without investors or loans.
"With HempNut, I bought whole certified organic hempseed in China and had it shelled in Germany and delivered to Long Beach in California. That's how I was able to sell organic with a decent profit margin for well below the Canadian's cost of production of nonorganic. That's still possible today with hemp foods."
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