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CBD processing facility plans move forward

By Staff | Jan 24, 2020

Submitted photo Rugby business owner Craig Wollenburg (center) inspects a hemp plant.

A local businessman is moving forward with plans to bring an agricultural product processing business trending in the United States to Rugby.

Craig Wollenburg spoke to the City of Rugby Planning and Zoning Commission earlier this month to seek a variance for a facility that would extract cannabidiol, or CBD oil from hemp plants. Wollenburg submitted the $245,000 winning bid for the former Windshield Doctor building from Heart of America Medical Center for his facility Monday.

Wollenburg told the Planning and Zoning Commission he hopes to employ six people at the facility. Operations will begin depending on zoning and variance issues still to be worked out with the city.

Wollenburg said the facility would crush hemp plants and use chilled carbon dioxide gas to extract oil from the biomass, or leaves, stems and flowers.

Wollenburg said hemp differs from marijuana, which contains tetrahydrocannabidiol, known as THC, which produces a “high” in users.

“Hemp plants have very little THC, which is a cannabinoid that creates the hallucinogenic affect,” Wollenburg explained. “Hemp plants are low in THC but high in CBD content. CBD is what you see in products such as topical creams, ointments, etc.”

“In the field, it looks almost exactly the same as marijuana. You can’t tell the difference. It smells like it, it looks like it but it can only have a certain percentage of THC,” he added.

“That’s according to the 2018 (federal) Farm Bill. It’s .03 percent,” Wollenburg said.

“Each of the states were allowed to make their own decision on how they would handle hemp production. So, North Dakota has allowed for that under the same guidelines that the federal farm bill has. There were a number of producers there and this was the first year that we were able to do that,” Wollenburg noted.

Wollenburg said limited hemp cultivation was allowed before 2018 in North Dakota, but it was only for seed production.

“They would take the hemp seeds and crush them for hemp oil and other products. They would process it somewhere else. Now, they crush the hemp seed for hemp oil (at some North Dakota facilities),” Wollenburg said.

“Some people confuse hemp oil and CBD oil. The seeds of the hemp plants do not have CBD,” he added.

Although there are some seed processing plants in North Dakota, Wollenburg said there are few processing facilities that extract CBD oil, which comes from parts of hemp plants other than seeds. Wollenburg uses feminized plants so their energy goes to CBD production rather than producing seeds.

“Ninety percent of people who grew hemp this year did not have a place to process it,” Wollenburg said of the business. “So, there’s a real lag behind that. We have a very opportune time to get into the processing of the oil. North Dakota is a great place to grow it. We have great ag people.”

Wollenburg said he became involved in hemp cultivation in the San Luis Obispo area of California. “I told my partners in California, we have some of the greatest agriculture people in the world in North Dakota, from the growers to the processors to the implement dealers – everything. And if we don’t know how to do it, we’ll figure it out.”

Wollenburg has plots of hemp plants on farms northeast of Rugby, and dries the plants in sheds near the fields. Like other area farmers, Wollenburg found his plans for harvest altered by an early October blizzard last year.

“We planted approximately 4,200 plants and I think I have about 300 to 400 left in the fields,” he said. Wollenburg still trudges through his fields to salvage what’s left of his crop.

“It’s exciting,” Wollenburg said of the emerging CBD business. “It’s a market that’s growing. All projections are saying this market will grow 30 to 40 percent for the next five years. That’s in a lot of the things we read.”

A recent article in Forbes magazine said 40 of 50 states in the United States have legalized or decriminalized some forms of cannabis including CBD products, and states such as South Dakota and Nebraska, where the products are illegal, may join them this year.

“This market is stabilizing,” Wollenburg said. “They’re finding more and more uses for it, and there is a vast array of products, from bath salts to CBD-infused drinks that are starting to hit the market. There’s CBD coffee. Willie Nelson is big on CBD coffee and Matthew McConaughey is into CBD-infused coffee. There are a lot of people getting into this, so we think the market is going to continue to grow.”

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