Jarrel Howard, CEO of Gold Standard Farms, shares the history of his family business and how cultivating hemp has launched the company into a new era.
Gold Standard Farms is a family-owned, Tennessee-based hemp cultivator with nearly 100 years of history behind it.
While much of the company’s history is rooted in traditional agriculture, including soybean and corn production, Gold Standard Farms CEO Jarrel Howard has launched his family business forward into a new era with hemp cultivation.
After taking over as CEO in 2020, Howard introduced hemp cultivation to his family’s farm, adding a new crop to carry the company forward. Later that year, Gold Standard Farms became the initial strategic partner for Viola’s incubator program, which launched in October 2020.
Now, with Howard in his third year as CEO, he’s certain this was where he was meant to be all along.
“This was my purpose,” Howard says, “to be home and take care of the farm for as long as I can and make sure we get another 80 to 100 years out of it.”
Howard joined Cannabis Business Times for this exclusive interview to share insight on how Gold Standard Farms has evolved over the years, how hemp revolutionized the company, and what the future holds for his family business.
Year founded: 1941 Location: Martin, Tennessee No. of Employees: 6 full-time, 25-35 part-time during harvest Total acreage: 70 acres, with 9,700 square feet of indoor cultivation Your cultivation style in one sentence or less: A better solution
Jarrel Howard: It's indoor. We have 100 lights. We got 22 benches, but right now we're only working 10 of them. We're going to do some expansion as we progress, but we are excited about the indoor, and we've got some cool things with some cryo freeze dryers, scientific freeze dryers, traditional trims, CO2 trim, [etc], so it's our laboratory to create those better solutions. We're excited about the progress we've made coming from greenhouse and outdoor to the indoor side of things for hemp.
JH: Yes. More control, more quality product. One of the toughest things I tell people all the time when doing an outdoor grow is there's so many things we don't control. We're not going to be able to control the weather, we're not going to be able to control the insects and all of those things nature has provided. So when creating a product that may be ingested in edible form or smoked, we want to make sure we know every single aspect of what's going on. So the indoor [cultivation] for us was a necessity because our mantra is to provide a better solution. So we want to make sure that we have the most organic and cleanest flower, or whatever the product SKU is, and it's documented from seed all the way to sale.
One of the things that I learned from touring with [Viola CEO and Co-Founder] Al [Harrington] was I wanted to take the same standard operating procedures that you might see in a traditional cultivation and implement that for us just to have the staff trained and ready for whenever the state of Tennessee does go legal for cannabis.
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JH: We started off traditionally with white-labeling opportunities for flower, gummies [CBD and CBG] and salves. Those were our main three. Now we're looking to implement a 60/40, where 60% of what we're doing will be on the sustainable side, and then 40% will be inside, whether that's edibles, cartridges pre-rolls, flower, [etc].
JH: [They saved] $100 dollars. If you look at that time, a lot was going on. For African Americans, they are about two generations removed from slavery. You have my great-grandfather, who's a sharecropper, so he's making say $100 dollars a year or whatever the case may be. The Great Depression is getting ready to kick off, and then you still have World War II. We are past the roaring 1920s, and we were going into a tough time, as everybody knew. It was even tougher for a person of color at that time. I think [my family’s] biggest thing was to have something in which they could pass down from generation and generation.
My great-grandfather was really big on not accumulating debt; if he couldn't pay for it in cash, he didn't want it. So there were plenty of opportunities where other farmers, once we moved to Martin, would come and try to trick him, “Hey, I know your 50 acres is paid for, but I've got seven acres over here. Why don't you just use your 50 acres for collateral? And you can get this seven acres, and you can get this.” And he was like, no. He was 51 by the time he ever got his first piece of property, so he's not necessarily trying to take chances and gamble it all.
And I think with the kids being able to work – when I say the kids, my grandmother and her siblings – in that environment, the majority of them born in the 1920s and share-cropped with their parents. They had a good understanding of core values, of saying, “Okay, we want to work for ownership, and we just don't want to squander it all and give it away.”
So my family has always been about the business of the farm. Even as siblings started to go their separate ways and escape oppression and the Jim Crow South, what always brought us back was the farm.
Now the role of my family, as elders, is moreso as advisers. You're not going to see my family members out on the tractors anymore. … But having them as advisers, as liaisons throughout this industry and using their relationships that have been cultivated over 80 years has been a great deal for me. Coming into Martin, [Tennessee,] and saying, “Hey, I want to grow a hemp farm,” there was no resistance from the community. I spoke with the mayor about the opportunities of growing hemp and why hemp is important. I spoke with him about how our goal is to create job opportunities and educational opportunities within this small town. … And so having the elders being able to pass down these relationships with other farmers in which we can work with and teach them how to cultivate is immensely important to our journey of what we're trying to do.
JH: In 2018, when the Farm Bill passed, I learned about it, and that was the first real conversation with my family about the elders getting older and wanting to find someone to take over. And it was still going to be strictly like soybeans and corn until we really found out how the hemp industry was going to take off.
In 2019, I did a year of R&D myself, and I went to present everything to the family. That's when my aunt was saying, “okay, I'm going to train you up as a CEO and show you what I've been doing for the last 50 years.” That was just a history lesson within itself. So in 2019 I got the CEO-in-waiting title of the family. In 2020 once we signed with Viola, they were like, “Hey, we're retiring. We're going to Florida. You got it now.” …
I just embraced it. You spend your time thinking that you're going to do something else growing up; I thought I was going to be a baseball player or sports agent. I did sports management for a minute, and I wasn’t fulfilled. But once I got into this space and learned the family history even more than I had, I just felt like I was the perfect person for it, and this was my purpose to be home and take care of the farm for as long as I can and make sure we get another 80 to 100 years out of it.
JH: It was tough because, for the most part, all of the things that we had planned for 2020 – we were going to go to this conference all of that was shut down. So then you have to worry about sales. How am I going to sell this product that a person can't touch, feel, or see? So it was tough, but for me, I was used to operating at home from [previously working in] the sports world. For any other company that was founded in 2020, it gave us an even playing field in a place where I felt like I can execute from operating at home and selling.
I think the biggest part was just labor. People were getting sick, outbreaks. We had one, we had to shut our indoor facility down for like three weeks and scrap everything that was in there and do deep sanitation and cleaning. It was trying.
But I'll tell you one thing, my great-aunt told me this, she said, "If you can get past this, you'll be fine.” That was my biggest thing – I was moreso worried about the elders in my family and keeping them safe and not having them around on the farm. So I think that was probably the most trying thing, the lack of time spent with the elders and also making sure that they're safe and out of harm's way with all of this stuff going on.
So for me, as tough as this industry can be, I wear a badge of honor that we're still in business because a lot of companies folded. So our thing is just piece by piece, staying afloat and understanding when to pivot and when not to pivot. I think that's where you start to see the hemp block come in. With that oversaturated market of hemp or CBD products, we wanted to pivot into still providing a better solution, but this time on the sustainable side. And I think that eliminates a lot of the tough years or tough trials that we might have seen in 2020 and parts of 2021.
JH: The financial aspect, the cost. You want to do things right; you look at about half-a-million dollars on 20 acres done right. And that's every year if you choose to do it.
That first year was an outdoor year for us and cost us a lot of money. It was in the pandemic. We also had some flooding in certain areas because it was a crazy rain, it rained for about eight days. You have to have capital if you're going to do it on a large scale. But then you have to also have people who understand the process of cultivation, that are in-tune with certain diseases that the plants may have or may not. So it's an educational component in a space that's relatively new now. With hemp and people acquiring licenses, we don’t want to treat it like a hobby; it's a business.
One of the main things with cultivation is having growers and geneticists that actually know what they're doing that can identify certain things with the plant and can solve problems. And in small town USA, that's tough. But we've got a great group of growers and geneticists that have a true passion for it, and they're able to teach my friends and family that work with me about the plant. And we all have a true passion.
So I guess it would be financially, you have to have money to play in any game, especially in this one, to compete. So that comes with a variety of different things, whether it's marketing after you cultivate. We still have to market these products, we still have to meet with smoke shops and do little sessions for them to try it out and quality control. So it's a financial responsibility that can turn into a financial reward, but emphasis on the responsibility. You have to have capital to play.
Our biggest thing is making sure that we always stay afloat to take care of Gold Standard, and from there, Gold Standard will take care of us, but you have to make sure that the baby is always provided for.
JH: What helps me sleep is the fact that I know that I'm building something that's going to be bigger than me. It's far greater than me. It's an opportunity for the empowerment of other people, it's about being impactful. That helps me sleep at night.
JH: What keeps me up is not reaching that goal. The thought of … did I get 1% better today? This family farm's been successful for X amount of years. I don't want it to get to my term, and then it breaks all the way down. That's the thing that keeps me up at night, I don't want it to be on me.
JH: Start small scale. From starting small, reinvest your own profits and marginalize outside funding. When I meet people with land or people say ‘my family has 100 acres in Louisiana, or 60 acres here,’ understand the cost to have a quality grow of that size. … I don't want people to put everything into this and lose their land, so I always advise people to start small. If you're doing two-and-a-half acres of a quality product and you're having trouble finding a purchase order, contact me or whomever you might meet throughout this space and maybe we can assist you, but you're not betting the house on it. Start small scale, find your purchase orders, reinvest and it’s going to work out.
He was appointed OCM general counsel in October 2021.
Rick Zahnleuter has resigned as chief lawyer for New York’s Office of Cannabis Management (OCM).
According to Syracuse.com, NY Cannabis Insider was the first to report on the news via an email sent from OCM spokesperson Aaron Ghitelman, which read:
“The entire staff of the Office of Cannabis Management wants to thank Rick Zahnleuter for his work getting the office up and running. Rick came out of retirement to lend his expertise to our office as we launched New York’s cannabis industry. Thanks to Rick’s work, the Seeding Opportunity Initiative is in full motion with regulations finalized for the cannabis supply chain; for farmers, for production facilities, and for our first retail dispensaries. And thanks to all that work, we’re in a great place to bring on a new general counsel to shepherd our office and New York’s Cannabis Industry into the future. We deeply appreciate all Rick has done for our state.”
According to the news outlet, the OCM appointed Zahnleuter as general counsel in October 2021, after he retired from his role as general counsel from the New York State Department of Health in 2020.
New York is currently working on launching its adult-use program and the state’s Cannabis Control Board recently approved regulations that govern the state’s forthcoming adult-use market, as previously reported by Cannabis Business Times.
The regulations would “ensure that the first round of dispensary licenses go to applicants with past cannabis-related convictions,” CBT reported.
Between July 11 and July 15, the County of Mendocino Marijuana Enforcement Team searched the cities of Covelo, Laytonville, and Willits.
Law enforcement has seized 165,219 illicit cannabis plants across three cities in Mendocino County, Cali.
Between July 11 and July 15, the County of Mendocino Marijuana Enforcement Team searched the cities of Covelo, Laytonville, and Willits and eradicated a total of 5,946 pounds of processed cannabis, according to KRCR.
Officials also found 12 weapons and 1,740 illicit cannabis plants grown on Round Valley Consolidated Indian Tribes' land.
According to the news outlet, officials detained several individuals from the investigation, most of whom are from foreign countries such as Mexico, Spain, Argentina, France, and Israel.
Partnership to support the regulation of the state’s medical cannabis market with the implementation of the company’s innovative track-and-trace system.
LAKELAND, Fla., July 21, 2022 (GLOBE NEWSWIRE) --PRESS RELEASE-- Metrc , a provider of cannabis regulatory systems in the U.S., announced its new contract with the State of Rhode Island to support the State’s regulation of medical cannabis, the company’s 22nd government contract to date and fifth so far in 2022.
As the only track-and-trace company to have successfully taken over a government contract from another vendor, Metrc will replace the State’s current partner and implement its robust track-and-trace platform to help facilitate the Rhode Island Medical Cannabis Program’s data collection and regulatory oversight. Rhode Island is the third state in which Metrc is replacing the incumbent vendor. The company’s unique RFID tag model combined with a configured software-as-a-service (SaaS) system will enable licensed operators to easily view and track all information and activities impacting the status of a plant or the creation of cannabis-based products, including origin, testing results, handling, and chain-of-custody information. This seamless data tracking helps operators optimize inventory control, accurately report sales data, and improve cultivation management. And this same tracking information is accessible to state regulators, providing the ultimate transparency to ensure regulatory compliance, help combat the illicit market, and safeguard the health and well-being of Rhode Island medical marijuana patients.
“As the Rhode Island Medical Cannabis Program continues to grow, we are excited to support and enhance the program through our state-of-the-art track-and-trace platform, which will enable state regulators to conveniently and securely track, store, and retrieve millions of data points from operators around the state,” said Michael Johnson, CEO at Metrc. “Our team at Metrc is looking forward to working side-by-side with Rhode Island’s Office of Cannabis Regulation and both existing and new licensees within the state to establish a safe and well-regulated medical marketplace.”
Rhode Island was an early adopter of medical marijuana, legalizing the program in 2006. Since last October, the state has awarded six new medical marijuana licenses to business owners through a lottery, which increases the number of dispensaries from three to nine, significantly expanding access to the state’s thousands of medical patients.
Metrc now holds exclusive government contracts in every region of the U.S and has a particularly strong presence in the northeast, having contracts with Maine; Massachusetts; New Jersey; Maryland; Washington, D.C.; and now Rhode Island. While these areas have diverse regulatory frameworks, each jurisdiction shares the common goal of ensuring safe legal cannabis markets. Metrc continues to be the favored partner of regulators and businesses in serving their unique needs and goals; having prevailed over other track-and-trace competitors who were eager to replace the incumbent vendor in Rhode Island.
The Cannabis Administration and Opportunity Act would decriminalize cannabis at the federal level, leaving regulatory choices to the states.
Editor’s note: This is a developing story and will be updated periodically through the day on July 21.
Senate Majority Leader Chuck Schumer’s bill to federally legalize cannabis is finally here.
The New York Democrat, along with Senate Finance Committee Chairman Ron Wyden, D-Ore., and Sen. Cory Booker, D-N.J., officially filed the Cannabis Administration and Opportunity Act (CAOA) July 21 in the upper chamber.
The 296-page bill expands upon a 163-page draft that the Senate trio originally unveiled more than a year ago, before industry organizations and stakeholders spent the better part of two months submitting their feedback.
While the final version of the legislation filed Thursday broadens the initial proposal, the nuts and bolts of the bill remain: remove cannabis from the list of controlled substances; tax and regulate cannabis at the federal level; and grant states the power to keep or administer their own oversight programs.
“It will help with consistency, it will make things cheaper, it will make things better [and] it will make the market much more efficient,” Jonathan Robbins, chair of the cannabis practice at Akerman LLP, told Cannabis Business Times. “I think the real positive impact will be for the start-ups, the entrepreneurs, the people who otherwise couldn’t get into business because the price is so high, and they don’t have access to traditional financing.”
More specifically, the bill aims to implement an excise tax on cannabis products, starting at 5% for small and mid-sized producers and gradually increasing to a maximum rate of 12.5% after five years from enactment. For larger cannabis businesses, the excise tax would begin at 10% and gradually increase to a maximum rate of 25%.
In addition, the legislation provides provisions to help repair the harms and injustices associated with the enforcement of prohibition policies that have led to disproportionately targeting Black people and communities.
“For far too long, the federal prohibition on cannabis and the war on drugs has been a war on people, and particularly people of color,” Schumer said in a statement, adding that the CAOA “will be a catalyst for change [by] expunging the criminal records of those with low-level cannabis offenses, providing millions with a new lease on life.”
Specifically, the legislation directs funding to reinvest in people and communities impacted by prohibition and lays the groundwork to foster diversity and inclusion in state-regulated markets.
The majority of U.S. voters support comprehensive cannabis policy reform, including 68% of Americans who support full legalization, according to a November Gallup Poll.
As that support for cannabis policy change continues to strengthen, now is the time to effectively address the damage done to marginalized communities and create equitable opportunities in the burgeoning cannabis industry, NORML Political Director Morgan Fox said in a news release Thursday.
“The official introduction of this bill to finally end the policy nightmare of federal marijuana prohibition is the culmination of unprecedented leadership in the Senate and engagement with stakeholders across the political spectrum,” Fox said. “We look forward to working with lawmakers to move this legislation toward passage and eagerly anticipate engaging in substantive conversations on all aspects of federal marijuana law with Senate members. These conversations and hearings are long overdue.”
The broad legalization effort comes as incremental changes, such as the Secure and Fair Enforcement (SAFE) Banking Act, which passed the House for the seventh time last week as an amendment to the 2023 National Defense Authorization Act (NDAA), continue to get held up in the Senate.
Addressing the lack of access to traditional banking services available in other industries, the CAOA would not only provide safe harbor to financial institutions to take on cannabis clients, but it also would eliminate the inability of licensed cannabis companies to deduct standard business expenses when filing their federal taxes.
While that provision is included in the CAOA, it should not distract congressional leaders from advancing limited “yet critical” reform efforts, such as SAFE Banking and expungement measures that are more immediately within reach, U.S. Cannabis Council CEO Steven Hawkins said in a statement to Cannabis Business Times.
“The introduction of comprehensive cannabis reform legislation in the Senate, by none less than the majority leader himself, is the strongest sign yet that cannabis prohibition in America is nearing its end,” Hawkins said. “We applaud the authors of the CAO Act for their leadership and vision. We are reviewing the updated legislative text and look forward to having substantive discussions on how to best transition away from the illicit market to a fully regulated, national market with opportunities for all.”
When the USCC submitted feedback on the draft version of the CAOA last year, it was one of roughly 1,800 entities to do so during the public comment period.
Three key issues raised by the USCC, and others, included the draft legislation’s high excise tax rates; the balancing roles of the Food and Drug Administration (FDA), Alcohol and Tobacco Tax and Trade Bureau (TTB) and other regulatory bodies needing to mirror other adult-use substances, such as alcohol; and the need for states with already established cannabis programs the ability to provide their licensees the time needed to adapt ahead of the onset of a national marketplace.
Robert DiPisa, co-chair of Cole Schotz’s Cannabis Law Group, told Cannabis Business Times that the CAOA would address some of his clients’ biggest obstacles, such as landlords refusing to lease property to them and insurance companies denying them coverage, by simply removing cannabis from the Controlled Substances Act (CSA).
“I think the biggest problem in the cannabis industry for my clients and operators all over the country is the fact that, obviously, cannabis is still Schedule I under the CSA,” DiPisa said. “That’s essentially the root of all problems.”
Descheduling cannabis would also expand research on medical cannabis, which DiPisa said could increase understanding of the long-term effects of cannabis use, as well as what other medical conditions the plant and its compounds could benefit.
At the time of the CAOA’s filing, 19 states have legalized adult-use cannabis and 37 states have legalized medical programs without low-THC restrictions.
Below are some of the key provisions for public health, public safety, regulation and taxation, research, entrepreneurship and restorative justice, and workers’ rights included in the CAOA legislation filed July 21:
The CAOA would have sweeping effects on the U.S. cannabis industry, which DiPisa said could ultimately harm its chances of passing.
“I think the acts that are the most simple, straightforward, and can get bipartisan support are the ones that are most likely to pass, such as something like some form of the SAFE Banking Act,” he said. “If you look at that one, … it’s really talking about deregulation and not penalizing lenders for servicing the cannabis industry, in its simplest form. … I think there’s a lot more in [the CAOA], and my concern is whenever there’s more, there’s always opportunity for someone to have an issue with certain aspects of it. … I think that could negatively affect the ability for this to actually get passed. At this point, the best likelihood of something to pass is something that’s very simple, very straightforward, and something that both parties can agree to.”
DiPisa attributed lawmakers’ failure to pass the SAFE Banking Act, in part, to the fact that legislators are focusing on what they see as more pressing issues that have arisen in the past six to 12 months, including the national baby formula shortage, inflation and the war in Ukraine.
“My concern is that cannabis may yet again fall by the wayside just because, in the eyes of Washington, it may not be as pressing as the bigger issues that we have going on right now,” he said.
Editor’s note: Senior Digital Editor Melissa Schiller contributed to this report.
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