Coleman family turns its attention to hemp in Kansas
Sheldon Coleman, whose family name is synonymous with lanterns and camping equipment, now has a large stake in the burgeoning hemp industry.
Sunnyland Kansas is a family-owned business that incorporated in July 2019 and expects to turn a profit in its second year of operation. Coleman was once the CEO of Wichita’s Coleman Co., the world’s largest manufacturer of outdoor recreational products. He later started a motorcycle company in his east Wichita garage, eventually selling Big Dog Motorcycles around the globe. That company shuttered after the 2006-2008 recession and reopened under new ownership.
Now, the 67-year-old and his wife Kathy Coleman, co-CEOs, and their son, 26-year-old company president Christian Coleman, are making a go in agriculture.
“Our family likes to be busy ... We don’t really like sitting back and investing and doing nothing,” he said, adding his wife has an affinity for nature. “When I started looking at this as a business model, she really liked it.”
Their latest company is headquartered in Wichita and they have a small farm in Andover and a drying facility in Newton. The Newton facility is one of the largest, if not the largest, drying operations in the state after they added a custom dryer last month that is more efficient than anything else in the industry, Christian Coleman said.
The company started with Sheldon and Kathy Coleman wanting to turn a family farm in Oregon into a vineyard. About the same time, the hemp industry started taking off.
After a year of research, they started a small Oregon hemp farm with family members a few years ago. The farm grows what ends up being a high-quality cannabidiol, or CBD, Sheldon Coleman said. CBD oil is prized by many as a wellness aid.
“We have anecdotal connection with Parkinson’s patients, with children with epilepsy, with all of these people. Arthritic people,” he said, “that hemp and CBD has helped immensely.”
Coleman said they’ve also invested in Oregon hemp businesses as well.
Industrial hemp growth and cultivation had its first permitted season in Kansas two years ago. Kansas farmers planted 3,786 acres of hemp this year - roughly 1,000 acres more than last year, according to Kansas Department of Agriculture figures.
He said his wife and son saw the potential for hemp in Kansas and pushed to start Sunnyland Kansas, which also offers educational services and consulting.
“This has been our family’s home,” he said. “We couldn’t have predicted five years ago that we would be here immersed in farming in two states ... It has evolved quickly and is something we all really, really enjoy.”
The Newton facility has dried roughly 500,000 pounds of hemp so far and recently started its biggest order last week: drying a few million pounds of hemp from a 1,000-acre hemp farm in Oklahoma.
Unique facility
Sunnyland Kansas’ custom dryer takes up roughly 1,600 square feet, he said. The dryer was built by Newton-based Industrial Metal Fabrication and the proximity and partnership with the builder is what makes the dryer work, Christian Coleman said.
It’s the most efficient dryer in the industry that he knows of.
Sunnyland Kansas’ smaller dryers, which would be more typically seen in the industry, can dry roughly 1,000 pounds of hemp an hour. The new dryer, which came into production in October, can do between 5,000-7,000 pounds an hour, he said.
“Nothing like this works as well as this does. There are portable dryers. There are rotary dryers … those dryers were used in other conventional commodity crops beforehand, like alfalfa,” Coleman said. “Our temperatures are much, much lower than any other dryer which means we are preserving more of the cannabinoids (like CBD) than any of the other dryers.”
The operation removes the seed, stems and stalks during the process and dries the flower.
“This is theoretically .. a zero waste plant,” he said.
Sheldon Coleman declined to give specifics but said it’s taken a significant investment to start the Kansas operation, with the custom dryer being the single largest expense.
Growing industry
The global hemp market is expected to grow from $4.6 billion in 2019 to $26.6 billion in 2025, according to Research and Markets.
Christian Coleman said the U.S. is the biggest producer of cannabidiol, or CBD, but lags behind in production of other hemp products because of its late adoption of the crop.
The legalization of marijuana led to additional market research about hemp, showing the benefits and usefulness of the plant and leading to an increased demand for it, Coleman said.
Production outside of CBD doesn’t have as high of profit margins but has potential for bigger yields.
Producing for the oil limits the number of plants to 2,000 per acre. The other production, called grain and fiber, allows 50,000 plants per acre, he said.
CBD oil can help with anxiety and pain, he said.
Hemp textiles made the most money worldwide in 2019, according to Grand View Research. Textiles were followed by personal care products, food and beverage and animal care.
Coleman expects the U.S. to catch up with other countries in all types of hemp production.
Future possibilities
The potential of hemp is what led San Diego engineer John Bolton to plant five acres of hemp on an 80-acre plot he owns in Andover. He purchased the seeds through Sunnyland Kansas.
Hemp is a newer market and not as automated as other crops, he said.
“And that’s where I think a lot of the invention needs to come in,” he said.
He designed and built the seed planter that the Colemans used on their Andover family farm and has ideas for other inventions. He’s using Wichita-based Kancanna, which Sunnyland Kansas works with, to have CBD oil extracted from the flower.
Once he has the oil back, he has to try and sell it.
“If we can sell it — that’s the big question in this whole market — are people going to be able to sell their product,” Bolton said. “If we can sell it and make some profit, then yeah, I’ll do it again.”
Bolton said it’s a lot of work: cutting the grass daily around roughly 10,500 plants, then harvesting and hanging the flowers to dry. The flowers were then stripped from the plant and sent to an extraction lab.
“It was a lot of work,” Bolton said. “I would not kid anyone who doesn’t like work.”
Their small operation couldn’t justify the cost of using Sunnyland Kansas to dry the flowers.
Prices for wheat, corn and soybeans — some of Kansas’ major crops — are at a century low when adjusted for inflation, according to the United States Department of Agriculture figures from 1912 to 2018.
Sheldon Coleman said hemp could become a major crop for Kansas farmers. Small farmers would need to use a method similar to Bolton’s but the margins are much higher for CBD than grain and fiber products, he said.
As for Sunnyland Kansas, Sheldon Coleman said he didn’t know what additions the future might hold to its hemp operation. He said the profit margins are higher the further down the line the operation goes, with the finished goods having the best return.
“Vertically integrated could be pretty interesting,” he said.
Hemp in Kansas
U.S. presidents Thomas Jefferson and George Washington both grew hemp centuries ago. It was grown around the world long before that.
Hemp was “caught up in anti-dope legislation” and effectively banned under the 1937 Marihuana Tax Act, according to U.S. Customs and Border Protection.
The 2014 farm bill allowed for some hemp production but the 2018 bill paved the way by eliminating hemp from being a controlled substance. The hemp has to have less than 0.3% of THC, a psychoactive drug, like caffeine and alcohol.
Sheldon Coleman said the 0.3% is an arbitrary number once used by researchers. It would take at least 10 times that to feel any effects, he said.
In 2017, the most popular strains of marijuana found in Colorado dispensaries had between 17-28% THC, according to an article published in Missouri Medicine.
Coleman said the company is pushing at the federal level for hemp to be approved with up to 1% THC.
Kansas monitors and tests hemp for THC before it’s harvested. Crops with too much THC have to be destroyed.
Kansas legislators are considering a bill that would commercialize hemp and reduce restrictions for production, Coleman said.
He said it’s the “final step of legitimizing hemp as a crop.”