Top ornamental greenhouse operation ColorPoint making transition to hemp

ColorPoint’s greenhouse facilities will be home to hemp clones (pictured), unrooted cuttings and year-round indoor hemp crops. (Photo courtesy of ColorPoint)

One of the largest greenhouse operations in the United States is leaving ornamental bedding plant production behind and instead placing its chips on the burgeoning Kentucky hemp industry.

ColorPoint, a Paris, Kentucky-based greenhouse operation owned by the industry-leading VanWingerden dynasty, said this week it is selling its 3.6-million-square-foot Granville, Illinois, facility to Red White & Bloom, a Michigan-based subsidiary of Canadian medical marijuana company MichiCann.

The greenhouse company also plans to convert its 1.8 million-square-foot Kentucky facility into a vertically integrated site for the production of hemp and CBD products.

ColorPoint’s Kentucky operation has merged with AgTech Scientific, a hemp producer also based in Paris, to form a fully vertically integrated hemp company with indoor and outdoor commercial production of high-CBD product. An extraction and manufacturing facility is projected to open in August.

The companies became acquainted in 2017 and planned to work together to produce hemp clones for the 2019 growing season.

After testing indoor production last year, they agreed to merge and convert the full greenhouse operation to hemp production, procuring grower and processor licenses from the Kentucky Department of Agriculture.

ColorPoint said its greenhouse facilities will focus on producing unrooted cuttings, clones and year-round indoor hemp crops.

Its indoor production and processing capabilities include more than 1.8 million square feet of environmentally controlled, high-tech greenhouse space, an agricultural processing center with drying and milling capabilities of more than 100,000 plants per day.

The operation is projected to plant about 5 million high-yield CBD hemp clones on more than 1,500 acres of outdoor fields in central Kentucky, all within 15 miles of the greenhouse facility.

Farmers who worked with ColorPoint and AgTech Scientific on last year’s indoor testing will become shareholders in the company, ColorPoint said.

“Today is a great day for the company, our employees and our families,” Art VanWingerden, ColorPoint’s co-president, said in a prepared statement.

“The strength of our unique approach and partnership with local farmers, combined with our indoor grow capabilities and our vertical extraction integration, places ColorPoint and AgTech in position to take a leadership role in the emerging U.S. hemp industry.”

The 50,000-square-foot extraction and manufacturing facility is currently under construction on 10 acres of industrial land in the Bourbon County Business Park and will offer ethanol-based extraction of up to 14,000 pounds of biomass per day by mid-2020, the company said.

ColorPoint also owns a fleet of more than 100 (mostly refrigerated) tractor-trailers and plans to digitally track production and logistics “from root to shelf.”

Shrinking margins lead to shifting crops

Established in 2001, ColorPoint has long been a fixture in the ornamental industry, supplying garden centers at national retailers including Walmart, Lowe’s and Aldi.

An aerial view of ColorPoint’s greenhouse facilities in Paris, Kentucky. (Photo by Mark Mahan)

With the acquisition of its Granville facility in 2014, the company grew to become one of the largest greenhouse operations in the U.S., producing more than 80 million ornamental bedding plants annually.

But as the garden retail environment has become increasingly competitive and greenhouse producers’ profit margins continue to erode, companies such as ColorPoint have been left looking to diversify their businesses, Vice President of Business Development Steve Sloan told Hemp Industry Daily.

“In response to these pressures, over the last several years we have been looking for new customers, new products and new approaches for our business with the purpose to be more sustainable and successful by more fully utilizing greenhouse space during off-peak seasons,” he said.

Industrial hemp research and the growing demand for hemp products led ColorPoint to begin considering the plant as an alternative crop in 2017, and passage of the 2018 Farm Bill solidified the company’s decision to apply its production expertise to hemp full time.

“Our core competence is horticulture, replenishment and distribution, and that can be directly applied to producing hemp,” Sloan said.

Changing teams

The state-of-the-art Granville facility includes over 3.6 million square feet of environmentally controlled greenhouse space and more than 230 acres of land.

Red White & Bloom said it will use the greenhouses to grow hemp for extraction to produce “CBD-derived medicines and products.”

The company said it plans to retain the 175 full-time ColorPoint employees who work in the Granville facility and add up to 400 seasonal workers.

“ColorPoint draws its strength from its employees, and we believe that the opportunity for the greenhouse team in Illinois to join Red White & Bloom will provide a very positive future and that there will be an increased need for personnel,” Sloan said.

Red White & Bloom CEO Brad Rogers said the company bought the facility with plans to expand from its base in Michigan and become a multistate operator through acquisitions of existing, scaled operations.

“We have been making investments in intellectual property, formulations and brands, as well as finalizing terms on a number of other transactions for our consumer packaged goods rollout later in 2019,” Rogers said in a company announcement.

Laura Drotleff can be reached at [email protected]