Llew Boyd made a rookie mistake when he got into the hemp farming business in 2018.
"I remember thinking people were going to come to the farm with a checkbook and just buy our entire crop," says Boyd, who launched Haygood Farms with his brother, Cullom Boyd, and Jimmy Schwartz.
Boyd, now the CEO of Haygood Farms, quickly learned that the hemp business wasn't quite that straightforward, but he says the business has managed to thrive in a market that's both saturated with product and recovering from the global pandemic.
"We did about 10 times the revenue in 2021 that we did in 2020, and we're looking to double that revenue again this year," he says. "Nothing's been easy about it – it's been a tough market to penetrate these first three years.
"We started with a basic plan, but then had to figure some things out, dodging and weaving, making it work," says Boyd, who adds that the company has just opened its first retail location, Haygood Market, on Chattanooga's Southside.
"We want to make it a high-end, boutique dispensary," he says. "About 50 percent of the stock will be Haygood Farms, and the rest we'll curate from other brands."
Baker Brock, the company's chief operating officer, says Haygood Farms plants and harvests on about 30 of the 160 acres it owns in the Sequatchie Valley.
Ryan Saari chose to take his Smoky Mountain CBD business from the field to a greenhouse in 2021. CBD, an extract from hemp plants, is used as a dietary supplement. (Meanwhile, industrial hemp is used to make feed, fuel, building materials, and other products.)
"Acreage is kind of for the big dogs," says Saari, a McMinn County native who launched his company in Etowah in 2017. "It's all about volume, and I realized I couldn't keep up with that part of the industry.
"And I saw an opportunity to have a more artisanal, craft kind of brand. Because I have so much more environmental control, the quality of the product I can grow in the greenhouse is so much better than what I could get outdoors," he says.
Boyd's family name has been synonymous with the Chattanooga-area insurance industry for a century. Boyd says he started out in the insurance field, but was intrigued when his brother Cullom, who'd spent time working in Colorado's burgeoning cannabis industry, came home and pitched him.
"We decided to do five acres in 2018 as a sort of science project," Boyd says. "I was doing my insurance job with this [farm] on the side, but then the science project turned into a business. It got to the point where I couldn't do both."
In 2018, Boyd says, Haygood Farms was one of 226 entities licensed to farm hemp by the Tennessee Department of Agriculture. According to figures provided by the department, those farmers worked nearly 4,800 acres statewide.
In December 2018, then-President Donald Trump signed into law what is popularly known as the federal Farm Bill. That measure shifted oversight and governance of the hemp industry from the federal Drug Enforcement Agency (DEA) to the Food and Drug Administration (FDA).
As a result, the Tennessee Department of Agriculture licensed nearly 4,000 hemp farmers in 2019 – an almost twentyfold increase compared to the previous year. Those farmers turned 51,000 acres that year.
"There was a large glut in the market," Boyd recalls. "It was hard to navigate the new competition and the overproduction of hemp. It was a challenging year."
So, too, was 2020, thanks to the global pandemic that slowed economies worldwide to a crawl in the first quarter.
Hemp by the numbers
Number of hemp growers licensed by the Tennessee Department of Agriculture and total acres farmed by those growers:
* 2015: 49 producers, 660 acres
* 2016: 64 producers, 225 acres
* 2017: 79 producers, 130 acres
* 2018: 226 producers, 4,768 acres
* 2019: 3,957 producers, 51,000 acres
* 2020: 1,918 producers, 15,722 acres
* 2021: 1,031 producers, 5,699 acres
"In 2019, a lot of people got green eyes," Boyd says. "They thought they'd be millionaire farmers overnight. Then the pandemic really cleared out a lot of the market."
In 2020, the state licensed barely half the number of hemp growers it had in 2019. That number was cut almost in half, again, in 2021.
Boyd explains, "2020 kind of kicked us 10 steps back. Retailers shut down, which hurt us, but we didn't shut down during the pandemic. We were able to hold on and do what we had to do." He says Haygood Farms was well-positioned in 2021 – when the "world started opening back up," as Boyd puts it – and the company posted a tenfold increase compared to 2020.
In Etowah, Saari says his choice to move into greenhouses has also worked out quite well.
"If you're outdoors, you're pulling down about 2,000 pounds per acre," he says. "I'm growing a lot less in the greenhouse, but, depending on how hard I want to work, I could get four harvests a year.
"A box of field-grown hemp will sell for about $20 per pound. I'm getting about $800 per pound for my product," Saari says.
Boyd says that because the hemp/cannabis industry has a bit of a "Wild West" feel, it can reasonably anticipate more state and federal regulation in the future. Brock, the company's COO, says Haygood Farms is "pro-regulation."
"Quality and compliance are kings in this industry," Brock adds. "We're rigorous about testing and sticking to quality.
"[The industry] is under a microscope," he says. "These regulations are coming, but we've been prepared for the last two years. We want to be a good actor in this industry."