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Palmetto Harmony

by Eric Peterson on October 24, 2019, 11:38 am MDT

www.palmettoharmony.com

Conway, South Carolina

Founded: 2015

Privately owned

Employees: 38 (27 in S.C.; 11 in Colorado)

Industry: Cannabis & Hemp

Products: Hemp oils, topicals, and other products

Founder and CEO Janel Ralph was a first mover with CBD in the Southeast. Nearly five years in, her manufacturer is seeing "hockey stick" growth.

A veteran of the real estate and restaurant industries, Ralph never expected to go into the hemp business.

Then she gave birth to her daughter, Harmony, in 2009. "Harmony was born with a really rare genetic condition," says Ralph. "With it comes intractable epilepsy, which means modern medicine isn't going to stop the seizures from occurring. At the time, her life expectancy was about four years old. A little after she turned four, we were looking to have to put her on hospice. Her doctors had a lot of their options as far as pharmaceuticals go, and she was still having several hundred seizures a day."

Ralph started researching alternative treatments after pharmaceuticals proved fruitless. All roads seemed to lead Ralph to cannabis and hemp. The hitch: Both were illegal in South Carolina at the time.

In 2014, the state's legislature passed a hemp bill that didn't result in CBD availability. "I didn't realize how useless it was going to be," says Ralph. "If there was demand, I figured there would be supply, like any other business. Unfortunately, that's not really the case in this space. At the time, it was more an avenue for people to get ripped off. I was one of the people who got stolen from and lied to and sold bad products."

The "nightmare" situation led her to look to Kentucky, where state law allowed for hemp cultivation, and she got into the CBD manufacturing business with Palmetto Harmony in 2015. The company's first crop was grown and extracted in Kentucky, with bottling and distribution in South Carolina. "We brought 55-gallon barrels home," says Ralph. "It was legal, but we just couldn't grow it here."

Over the next two years, she successfully lobbied the South Carolina state legislature for a less restrictive hemp policy, and Palmetto Harmony won one of the state's first 20 cultivation permits. The company subsequently moved cultivation and extraction in the Palmetto State.

"Vertical integration was a must," Ralph says of setting up shop in Conway. "There were no options." The company now outsources production of its gel capsules, but otherwise manufactures all products in-house at its 100,000-square-foot facility. Ralph says co-packers are not as reticent to work with CBD as they were in 2016, but it's still a hangup for some potential contract partners.

The company has succeeded without outside investors. "We've been profitable since month four," says Ralph. And ever since then, growth has exceeded expectations. "It's been like a hockey stick -- straight up," she notes. "It's been a little crazy."

While she declines to reveal specific figures, Ralph says Palmetto Harmony is "a multi-million-dollar company."

From the original full spectrum CBD hemp oil, the Palmetto Harmony catalog has expanded to include vape oil, capsules, pet products, and skincare. The original oil remains the top seller, and Cannacense CBD skin cream is second.

Ralphs calls the skincare line "my baby," and notes, "That was for me. That was my little side project that I really wanted to do." Launched in summer 2019, the products have taken off quicker than expected.

Palmetto Harmony also offers private-label manufacturing services for outside brands. The operation is bolstered by USDA Organic and Good Manufacturing Practice (GMP) certifications. Ralph says she expects Palmetto Harmony to apply for NSF certification in fall 2019.

 

 

The certifications involve a lot of "hard work," but Ralph says they are an absolute necessity. "We drove the narrative on third-party lab testing, because all of the shenanigans," she notes. "I think consumers are tired of being jerked around. . . . People are going to need to be transparent."

It's paying off. Case in point: The Center for Food Safety recently issued a scorecard for CBD companies. Only four got an A, and RE and Palmetto were two of them.

In August 2019, Palmetto Harmony merged with RE Botanicals of Boulder, Colorado. Ralph says there are several synergies: RE has a solid retail footprint, whereas Palmetto Harmony has focused on a direct-to-consumer model. The combined company has about 2,000 retail accounts in all, with about 1,400 coming from RE's network. 

Challenges: "I think there's confusion in the consumer space with all these catchphrases companies are coming out with," says Ralph. "We need a really good educational platform base."

An increasingly crowded market is another challenge. Ralph says she's heard reports of 100 CBD companies going into business every week across the U.S.

Then there are the issues specific to hemp manufacturers: "Facebook has censored us repeatedly. We have issues with banking, we have issues with retail. It's a challenging space."

 

 

Opportunities: "We're getting ready to do a complete brand refresh," says Ralph. She says "women-centric" branding aligns nicely with her ownership and operation of the company. "Our customers are women -- the purchasing agents of the household," she says. 

The merger with RE Botanicals offers more opportunity. "Our goal after integration," she says, "[is] we're really going to hit sales hard."

Needs: Talent. "It has been very difficult to hire in this space," says Ralph, noting that a lot of that stems from confusion on the difference between hemp and cannabis, which she terms "a whole different ballgame."

As Palmetto Harmony could come close to doubling its staff in 2020, she says is on the lookout for people with experience in food and supplement manufacturing as well as "real, true farmers." "They understand and are able to tackle the challenges," says Ralph.

While the company has eschewed outside investment to date, that could change. "The more you grow, the more capital you need to support that growth," she says.

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