Hemp Barons 0002: Colorado Hemp Processing Cooperative - Duane Stjernholm

Duane Stjernholm from the Colorado Hemp Processing Cooperative joins Dan Humiston to talk about their ambitious project.  Duane explains that hemp is cannabis with less than 3% THC and that products are created and improved using it's four main parts that the Cooperative will provide.   

Produced By MJBulls Media

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Dan Humiston:
Welcome to Hemp Barons.

Dan Humiston:
Thanks for tuning in today. We have a really interesting show with our guests Dwayne Stjernholm from the Colorado hemp processing cooperative during my chat with Dwayne. One thing was very obvious is this guy knows hemp. He's super patient and he's takes the time to really explain all about this amazing plant including the difference between marijuana and hemp and all the different parts of the plant and what each part is used for. But our conversation is mostly centered around the hemp processing co-operative. So thank you for listening to Hemp Barons. And please subscribe rate and review on iTunes. I'm Dan Humiston. Hope you enjoy today's conversation with Dwayne Stjernholm.

Dan Humiston:
Dwayne welcome to Hemp Barons.

Dwayne Stjernholm:
Oh thank you. Dan I appreciate the opportunity to talk about what we're doing here in southeastern Colorado and what we're going to be doing in the hemp industry for the whole country.

Dan Humiston:
We the listeners hear this this is a really really exciting and ambitious project just looking at it. I think what we're going to do is we're going to take our time with this because it's such an awesome idea. But we need to explain to our listeners a lot of the aspects of this whoever it is a really good foundation going into it. So maybe you explain to us what industrial hemp is and how is it different than other cannabis plants.

Dwayne Stjernholm:
Sure there's a lot of misconceptions and misinformation out there about cannabis cannabis plant is the cannabis plant. I don't like to use the word marijuana right. And even the word hemp. The only difference between cannabis and hemp is a statutory one. Hemp is cannabis that has point three percent or less of tetra hydro can have an all THC. It's just by statute that hemp is kind of carved out from the rest of the cannabis a couple of different types of hemp. When you grow for CBD most CBD guys space their plants three to five feet apart. So that translates into about four to five thousand plants per acre. Now if you're growing industrial hemp it's a whole different ballgame. You want a tall straight plant because those the car became better in order to get those plants to grow straight and tall to grow it a whole different way. You grow at about seventy five plants per square metre instead of like one plant per square metre in a typical acre of industrial hemp you'll have four hundred thousand plants instead of 4000. Why. Right now there's about 70000 acres of hemp in the United States. If you look at something like corn or soybeans there's 90 million acres of that growing 90 million acres.

Dan Humiston:
Holy cow. The potential is astronomical. Wow. Take a minute and break down the different parts of the plant.

Dwayne Stjernholm:
You have the clean separated seed and that can be used for lots of different things. And then you also have some residual flour which can be extracted into the CBD. So there's two products there but then you still have the stocks take those stocks to the processing facility and you do gate those into the best in the herd. You're basically producing four products one of that was the siege the flour the basket and the herd. And now out of those four products you can make the twenty five thousand products that everybody says that hemp can be used for. Give us a couple examples of some of the twenty five thousand products the seeds can be used for food or they can be you can press out the oil the oil hemp seed oil can be used for made into biodiesel food wise it's a very good source of the mega 3s and mega sixes. The bass is used for things like hemp Creek and they use it a lot in car interiors BMW uses tempered and the panels of the interiors of cars you can make ethanol out of it if you want just like corn. Then you have the fiber also and the fiber is typically what's been used to make textiles. Another use for that vast fiber is they're starting to use it in super capacitors and they found that it works just as well as the graphene that they typically use in super capacitors but at much much lower cost and it's much greener than graphene and super capacitors have the possibility of replacing every battery in the world. I mean that's a whole market that hasn't even been tapped hardly at all.

Dan Humiston:
Gosh you give us a great education and the plant in the least 40 different components within the plant. Talk about farming industrial hemp. What type of climates do we need. How long is the growth cycle.

Dwayne Stjernholm:
Fortunately hemp can be grown in all 50 states. It's a very hardy plant. You can even endure a few light freezes and still be OK. It doesn't use a lot of water but it needs some water at the right times and then also it has a nice factor that it pulls out adult drinks out of the soil like it can even pull out radioactivity. They're using hemp plants around Fukushima and Chernobyl to help clean up some of that tainted soil because it can pull out radio nucleotides.

Dan Humiston:
All right. Let's switch gears let's talk for a minute about a co-operative. Explain to our listeners have never heard including me who do not understand what a co-operative is.

Dwayne Stjernholm:
Yeah there is a whole different set of rules for cooperatives versus a corporation. The major differences are that a cooperative you can just sell shares of the common. Machinery and equipment. Then you raise money by selling shares. And then everybody owns a piece of it a cooperative doesn't make a profit it can generate excess revenues and by statute those excess revenues have to be returned back to the shareholders. And the other things that can differentiate from a corporation is it. It doesn't matter how many shares you have of the co-operative. You only get one vote. So the patron shareholder that only has one share versus the investor shareholder that has a thousand shares. They only both get one vote so that makes the shallow pocket guy feel like his voice is just as important as the deep pocket guy. So there's a sense of fairness there. By statute any excess revenue distributions at the end of the year a minimum of 50 percent of that have to go to the patrons shareholders. So how are you going to set up the Colorado hemp processing co-op in our situation we have patrons shareholders and we have investors shareholders our patrons shares are 100 dollars. Our investor shares are a thousand dollars. The patron shares they get a share in the excess revenue distributions. We'll use the other 50 percent of that excess revenue and pay back those investor members their full investment once they're paid back in their investor share will revert to a patrons share. Patrick share is cost 10 percent of what investors share does. I'd like a 10 percent return on investment right there and then they can also share in the excess revenue distribution in perpetuity just like the other patrons shares.

Dan Humiston:
Let's see we'd jump backwards one second and talk about a processing facility.

Dwayne Stjernholm:
Just explain to me how a processing facility works so that I can kind of visualize what one would look like we're doing full plant processing so we will go through and harvest the seeds and the flowers and then we will take that material to the processing plant and we will separate out the seeds from the flower. Then we also have the stocks to deal with. You run the stocks through a machine called a Decatur cater. So after the initial Decatur cater there's what's called the Decatur cater line which is further processing those materials to whatever spec the buyer wants. The same with fiber. You'll have shorter fibers and longer fibers but that's the four products that we will do out of the processing facility. Is that was that clear.

Dan Humiston:
No that's really clear. Let's just jump forward and let's talk about Colorado hemp processing co-operative. Where are you in the process.

Dwayne Stjernholm:
Well we're fully registered with all the powers that be that currently have ninety thousand patron shares and ten thousand investor shares. So we have the capability to raise about 90 million dollars. Our processing facility. The first one we're going to do down here in the Hunter in southeastern Colorado. We want to build the first processing facility down here and that's about a million dollars. See now everything's in place right now and then you Yeah we're just raising money right now to build our first processing plant.

Dan Humiston:
And so the way that you're raising money is either through patriot shareholders or investor shareholders. I think I understand this but to clarify it to make sure I do.

Dwayne Stjernholm:
If somebody were to invest a million at some point they would get that they would get their investment back from that point on every share that they'd purchased will revert to a patron share and they'll still get their share of the excess revenues and at that point it could be a really life long term annuity for someone. If yes we felt that way. Yeah. Okay.

Dan Humiston:
What if one of our listeners is in another state and they're interested in what you're doing want to be part of it.

Dwayne Stjernholm:
Anybody from any state can be a member of our cooperative but we're looking at a much bigger picture here. What we would like to do is we have a cooperative in every state. And then each cooperated in every state be a shareholder in each other's cooperatives. That way we can share best practices we can share resources we can share financial help we can share first. Now we can share equipment and just all of those different things we're all working towards the same goal to build the industrial hemp industry into what it should be doing.

Dan Humiston:
This has been very very insightful and educational. I'm confident that our listeners are coming away after listening to this much better informed on the entire hemp industry. We've been speaking with Duane Stenholm who is the co-founder and operator of the Colorado hemp processing co-operative.

Dan Humiston:
In all their information including how to become a patron or an investor will be on the MJBulls website. Dwayne thanks for being on Hemp Barons.

Dwayne Stjernholm:
Oh thank you very much. I really appreciate the opportunity to do this. What you're doing Dan is a great thing. We just need more good information and correct information to get out there so everybody knows what we're talking about and how we can all move forward together to make this industry the best it can be.

Dan Humiston:
Well you're on the right track right now and I'm anxious to watch this thing unfold because as people have said to me before if cannabis is cherry pie marijuana is just one cherry in the pie. Hemp Industry is the rest of the pie and we are just getting started here.

Dwayne Stjernholm:
So the cannabis and Cbd industries are going to be tens of billions of dollars of industry but each industrial hemp is going to be hundreds of billions if not trillion dollar industry. Once it gets all going Thank you.

Dan Humiston:
Good luck with this project. And let's stay in touch. OK.

Ok. We'll do Dan.

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