Voice of the Modern Manufacturing Economy Since 2013

Colorado Hemp Works

by Gregory Daurer on January 14, 2017, 08:19 am MST

www.coloradohempworks.com

Longmont, Colorado

Founded: 2014

Privately owned

Employees: 4

Industry: Industrial & Contract

Products: Hemp products and processing

Owner and President Matt Birkholz offers seed processing help to the state's newly minted hemp industry.

"Everything I've done in my life has led up to this," says Birkholz.

In launching Colorado Hemp Works, Birkholz, 40, has drawn on the skills he's acquired through his school and work experiences. When he was younger, he waited tables, tended bar, and prepared coffee drinks, learning about food safety. In remodeling houses, Birkholz picked up knowledge about electrical tools and customizing equipment. He also spent 17 years in technology, and managed technical teams for IBM.

But it was while he was still attending school at Miami University in Ohio, earning his degree in biological psychology and neuroscience, that he wrote a paper about hemp. Birkholz says, "That small amount of research gave me a leg up on so many people in understanding the basic difference between marijuana and hemp."

Today, in a 4,000-square-foot facility in Longmont, Birkholz is putting all the knowledge he's acquired to work. "We've got two independent lines," he says. "One is a de-shelling line, so the input is whole seed: We de-shell it, [separating] the shell from the hearts. And then we package the hearts, package the shells. The shells go to animal feed. The hearts are definitely the most valuable component of the seeds: It's where the protein and the oil both are."

Hemp hearts are small, whitish kernels that have a nut-like flavor. Go into practically any natural health grocery store, these days, and you can buy packages of them. People often sprinkle them over food for a boost of Omega-3 fatty acids. Read the package, though, and they'll most likely have been imported from Canada.

But not for long, if Birkholz has his way. "There's nobody [else] in the state -- or in the U.S., for that matter -- that has a de-shelling line specifically set up for hemp," he says. "That's kind of a bold statement."

Birkholz adds, "You don't Google a 'hemp de-huller' and find one. It's a system, and it's a custom system." He spent eight months researching the design, working with a consultant and a contract manufacturer, and asked technical questions of knowledgeable people. "I've traveled to Canada," explains Birkholz, "I've seen Chinese equipment."

As he speaks, a noisy batch of processing is simultaneously taking place across the room. Birkholz turns his attention in that direction. "And then, on the other side, we've got an oil press line," says Birkholz. "It crushes the seed, expels the oil, and then everything left that comes out of the press is seed cake." The cake is notably high in protein, about 40 to 50 percent by weight, and can be milled into protein powders.

As the machine does its job, hemp seed oil is collected in a bucket below. Simultaneously, swirls of hemp seed cake come out of a top end. The cake resembles long strips of blue-corn tortilla chips. It's dry, yet flavorful.

Birkholz says of the cake, "You've got [the basis for] a plant-based protein powder that's pretty valuable in today's markets, especially with rises in vegetarian and vegan populations, and people just looking for meat substitution, in general." The powder can be added to smoothies or shakes, or incorporated into other health food products.

Then there's all that cold-pressed oil; many soaps and lotions now incorporate the green liquid into their formulations. It also can substitute for olive oil over salads, although, with its low flash point, it's not good for cooking. Still, the oil packs hefty amounts of Omega-3 fatty acids, just like the hemp hearts.

Birkholz points out a piece of equipment that gives him a leg up over his competition: his oil filter. "There's one other group that I'm aware of that has an oil press," Birkholz says. "[But] they don't have a filter -- so that oil has a lot of particulate in it; I know they can use some settling tanks without the filter. . . . This [machine] gets all of [particulates] out, down to one micron. So there's nothing larger than a micron in our oil."

The shelf life of hemp seed oil is sapped by light, heat, and oxygen. Birkholz stores his hemp products in a walk-in cooler. To preserve the oil being held in a large, 250-gallon storage container, nitrogen is introduced. The heavier gas settles onto the top of the oil, adding an insulating, protective layer from the oxygen above.

Assessing his operation, Birkholz observes, "We're definitely the only group that has a commercial setup of this size."

In addition to wholesaling hemp hearts, seed, and cake, Colorado Hemp Works also processes hemp for outside parties: "Farmers who already have markets, they just need someone to process and package it for them. They'll bring [the seeds] to me, I'll charge them a per-pound price."

In the next year, Birkholz expects his company to grow exponentially, and has plans for additional facilities on the Western Slope and in the San Luis Valley. "So we will have three facilities, but our capacity is going to more than triple," he says. "It might be six times the capacity we have now, collectively across the state."

Colorado's hemp industry is growing by leaps and bounds -- and Birkholz hopes to continue serving its needs. "When you think about it, there's not really another state where there's a need for someone like me, quite yet," says Birkholz.

Challenges: Consumer education, says Birkholz. "The biggest challenge, by far, is misconceptions of what hemp is. That's the biggest obstacle: People still wonder if hemp's going to get them high." Noting that hemp is a high-protein, high-fiber "super-food that's being ignored, because many people think it's marijuana," he adds, "The biggest obstacle, in my mind, is that stigma and that misunderstanding of what hemp is."

Another challenge, says Birkholz, is that there aren't any guidelines or road maps established for the industry: "There's no manual to what we're doing here."

Opportunities: "In my mind, there's so much opportunity," says Birkholz. "It's this brand-new industry to the U.S. that is an industry that's already been proven in the past." He notes that "there's already an established food market, and Canada just supplies it. So, in my mind, that right there is a huge opportunity."

Needs: "Capital is always a need, although we're doing pretty well at this point," says Birkholz. "Next year, we're looking to expand. We're going to triple in size. You know, that's going to take a lot of capital."

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