WARWICK – Orange County could become a state leader in producing and researching a medically promising hemp chemical, if a local economic development agency has its way.
The Orange County Industrial Development Agency’s Accelerator recently announced plans to create a new $2.1 million branch focused on fostering the production of the hemp compound cannabidiol, or CBD, at the former state prison site in the Town of Warwick.
The Orange County IDA is a nonprofit public benefit corporation that considers tax breaks to stimulate local development. It also operates the Accelerator, which incubates new businesses and speeds up the growth of nascent firms.
The CBD Accelerator will put up $550,000 for the Warwick project. The remaining $1.55 million will come from state development funds distributed years ago to the Warwick Valley Local Development Corporation.
The nonprofit WVLDC is charged with redeveloping the former Mid-Hudson Correctional Facility. The WVLDC and Warwick own different parts of the site and work together to transform it.
The municipal and business leaders behind the WVLDC have been on a hot streak with the prison property, lately, facilitating more than $40 million, including a $36 million medical marijuana manufacturing facility under construction by Citivia Medical, and proposals for a revamped sports academy and a new brewery.
The CBD Accelerator’s leaders hope to secure municipal approvals and sign business and research partners in 2019. But they’re not yet able to project an opening date for a Warwick operation that would go inside the Manor House, the warden’s old office, and in the prison’s former barn.
“I just couldn’t be more pleased” about the CBD Accelerator, said Warwick Supervisor Michael Sweeton, who serves on the WVLDC board. “It’s a perfect fit, not only for providing opportunities to entrepreneurs but for our existing growers.”
Though Warwick’s future Accelerator is the smallest of the projects planned for the prison site, it may have the most lucrative long-term potential.
CBD comes from hemp or cannabis, the same plant as marijuana, but hemp contains 0.3 percent or less of tetrahydrocannabinol, or THC, pot’s high-producing chemical. CBD has shown potential for treating pain, inflammation, psychiatric conditions, alcohol and opiate use disorders and other maladies. But determining its effectiveness, safety and dosing will require more research.
With Congress legalizing hemp in December, federal regulators writing hemp industry rules, and New York lawmakers poised to follow, America’s hemp-CBD market could grow to $2.5 billion or more in 2022 from $820 million in 2017, according to New Frontier Data, a research firm.
“We are getting in on the ground floor of creating a whole CBD industry with a full spectrum of jobs creating everything from food to nutraceuticals, pharmaceuticals, body and health care products,” said Vincent Cozzolino, managing director of the Orange County IDA and its Accelerator.
New Yorkers are already so eager to try CBD that illegal tinctures, foods and other products have become common statewide in recent months, despite the U.S. Food and Drug Administration’s prohibition.
Orange County’s CBD Accelerator will process hemp into CBD-rich oil and teach farmers and entrepreneurs about the hemp and CBD industries, Cozzolino said. The Accelerator’s leaders are on the brink of inking a deal with the New York Hemp Alliance to run the site, said Ed McCauley, the Alliance’s co-founder.
The Accelerator also is currently negotiating with an undisclosed local university to run a CBD Accelerator Research lab at Touro’s Middletown medical school. That’s where the Accelerator already runs another branch nurturing medical device makers. A third Accelerator fosters textile producers in Newburgh and New Windsor.
McCauley, 60, of Campbell Hall, was a Bergen County, N.J., home builder until 2016 when he met former Warwick flower farmer Adam Kurtz, 41, through a mutual friend.
The pair first teamed to launch the New York Hemp Alliance’s sister company, Oregon Fusion LLC. That Oregon firm has fast-developed a reputation for pure, potent, affordable CBD products, with its Fusion CBD line, while teaching others about hemp.
In recent years, McCauley and Kurtz have cultivated 60 acres of hemp in Oregon’s Willamette Valley and another 15 acres in Warwick, while employing 18 employees. They say they’re allowed to produce CBD under a 2014 federal Farm Bill provision permitting limited hemp growth for research.
But, like other CBD makers, the pair are operating in a legal gray area. Federal and state regulators must create hemp rules, following its recent legalization, and the FDA, which tightly regulates CBD as a drug, hasn’t decided to allow its general use.
Warwick’s CBD Accelerator is “an opportunity to revitalize a New York farming industry that’s hurting,” McCauley said. “But we’re all on hold for now as to how much we can scale the business” till regulators act.