To say Enviro-Serv Inc. made a change to its business would be a huge understatement.
Until recently, the Florida-based company’s primary business was in pest control and government contracting services in its home city of Tampa. But in February, it announced plans to begin farming industrial hemp in central Wisconsin.
So what does this next incarnation of the company have to do with the work it had been doing for years?
“Nothing,” said Chris Trina, chief executive officer. “This is a brand new endeavor.”
Beginning in May, the company will be starting a hemp farm in Beaver Dam, where it is leasing nearly 30 acres of farmland. The state of Wisconsin’s Department of Agriculture, Trade and Consumer Protection approved Enviro-Serv’s license in early 2019. The company will be farming on 7 to 10 acres to start and is in the process of acquiring the seed needed to get started. Enviro-Serv will be planting to harvest cannabidiol.
Before setting course for Wisconsin, Enviro-Serv was a “micro penny stock.” Shares of the company’s stock were trading at one tenth of a penny, Trina said.
“We were always a multi-diversified company, but primarily tied to pest control and government contracting,” he said. “But we’ve always been a holding company. And basically, anything that can bring my shareholder value up, we were open-minded in looking into it.”
So in October, Trina met with consultants familiar with the 2018 Farm Bill, which included language that legalized hemp at the federal level, removing its classification as a controlled substance (hemp is closely related to marijuana but has none of the effects of the drug that get a person “high”). Trina bet that the bill would get passed and signed into law quickly. He was right. The bill passed Congress with overwhelming bipartisan support on Dec. 12, and President Donald Trump signed it into law on Dec. 21.
The State of Wisconsin had the framework in place to manage this change, since it passed a law in November 2017 allowing people to grow industrial hemp via a pilot program. The 2014 Farm Bill gave states the option to set up a program, and Wisconsin was among more than 30 other states that did so.
However, said Donna Gilson, spokesperson for the DATCP, “the Drug Enforcement Agency at the federal level still had industrial hemp on the controlled substances list. It was considered the same thing as marijuana even though it had very low THC levels. That was creating a lot of legal ambiguities. So, Congress came back in 2018 and with the Farm Bill that passed late last year, they said, ‘OK, industrial hemp is no longer on the controlled substances list,’ which is probably why we got so many more applications this year.”
That they did. The number of licenses to grow industrial hemp issued by the State of Wisconsin grew five-fold, from 247 in 2018 to more than 1,400 in 2019. Those who want to start a cannabis-related business such as selling cannabis-infused brownies may visit this page to get some tips.
“We expected there to be an upswing in interest this year because they had last year to sit back and watch how it went and also because that legal uncertainty was removed,” Gilson said. “We knew there would be an upswing. I don’t think we expected the upswing that we got. We had a really dramatic increase.”
Photo courtesy of DATCP
One of those companies to be approved was Enviro-Serv. Trina said it all happened extremely quickly, even though farming in Wisconsin was not the company’s initial plan.
Enviro-Serv started looking for a place to farm hemp in the city of Homestead, Florida, where it has formed a partnership with a farm and is working with the University of Florida Institute of Food and Agricultural Sciences to advance the project. But Florida is “not as far along as other states” for hemp growing, Trina said, and that effort may take more time. Next, Enviro-Serv went to Michigan, where recreational marijuana became legal in December, but “Michigan is not allowing the general public to get certified for growing hemp, unlike Wisconsin and Minnesota, which are.”
Then, he said, one of the company’s large shareholders contacted him about 29 acres of farmland, and encouraged him look into Wisconsin as a place to farm hemp.
“I called Madison, I went online (to apply for a license), and to my amazement, it was not a difficult process,” he said. “We did get approved, and we got approved within 10 days.”
Trina said there is a great deal still for the company to learn, but it’s jumping in head first.
“We’ve been attending all these hemp expos since October and we’ve learned a truckload of information and made some very serious contacts,” he said. “It is learn-as-you-go. There is an extreme learning curve and mistakes will be made. But it is a business decision. This is a new and explosive industry. The demand for hemp products and demand for hemp CBD oil is out there. There is a viable end user at all levels for hemp.”
Part of what’s changed and makes this so different for companies is the federal recognition in the 2018 Farm Bill that allows companies to transport the seed and product across state lines, which was “an open question before,” Gilson said.
Now, Trina said, “You can transport it, insure it, grow it, harvest it, process it without going to prison. It’s a big deal.”
Enviro-Serv will continue its pest control business, but the company’s hemp farming will be its main focus going forward.
Upon making the formal plans official in mid-March, Trina called it the “biggest most monumental achievement to date at Enviro-Serv,” adding that “the company will have much more to announce about our Wisconsin endeavor and other states, as well, as this is merely the tip of the iceberg.”
