While growing hemp has undergone numerous legal twists and turns in the U.S., the rollercoaster of regulations has not deterred Cy Kupersmith, a 2019 graduate of UVM’s Grossman School of Business’ Sustainable Innovation MBA (SI-MBA) program, Sam Bellavance and his family farm, Sunset Lake Farm – a family with Vermont roots stretching back to the 18th century – from diversifying from dairy farming into a new CBD business.
The recent loosening of restrictions in 2014 around growing hemp, reinforced and expanded in the 2018 Farm Bill, has now opened up significant hemp-focused commercial opportunities. With his father Tom’s support (UVM class of ’82), Sam founded Sunset Lake CBD.
Through Sunset Lake Farm's long-standing relationship with Ben & Jerry’s – the farm was a standout pioneer in Ben & Jerry's Caring Dairy Farm program as they supply the iconic ice-cream maker with cream and milk – under Tom’s leadership, the farm has already embraced sustainable innovation techniques including improved land management, cover cropping, biodiversity and ethical labor practices.
For the Bellavance family, Cy Kupersmith, now a partner in Sunset Lake CBD, and third partner farm manager Alex Frei however, the door thrown open by the updated federal regulations that legalized the production of hemp across the country, provided a unique opportunity to build a new CBD brand, based on farming a new crop that complements their existing dairy operation.
Growing awareness and adoption of cannabidiol (CBD) for various health conditions have already resulted in sales in the United States at 4.6 billion dollars in 2020. By 2027, recent reports estimate this market is expected to grow to 16 billion dollars in value.
In Sam Bellavance’s eyes, growing hemp is a nearly seamless operational fit for Vermont’s dairy farms. “Hemp dovetails very well with dairy farming. There are lots of basics when it comes to farming. You need land, tractors, electricity, water and barn space. A large dairy farm has excess capacities that a start-up hemp farm can tap into” he said.
“A large dairy does not use all of its equipment all of the time. We could borrow small tractors, use hay field acreage, improve electrical service from the barn, and bootstrapped a million other things. Long story short, we did not need to build out and set up an entirely new farm. The dairy had most of the basics and we also cannot forget the massive supply of free fertilizer. Fertilizer rich in nutrients that not only feeds the plants but benefits the soil we farm. But growing hemp alone is not a silver bullet crop for Vermont farmers though,” Sam cautioned, as initial market realities hit farmers hard in 2019 as an oversupply of hemp led to a slump in prices.
“Farmers were hoping it wouldn’t be a new gold rush, but a new green rush. Growing hemp is not the issue, it’s what to do with the harvest,” said Alex Frei.
The Sunset Lake Farm pivot to the CBD business and hemp farming allowed Cy Kupersmith to use his UVM SI-MBA education to help mold the operation into one that embodies the philosophy of a profitable, sustainable business that respects the land and resources it uses, while amplifying its profitability and shared economic impact.
“We learned from the pitfalls of our initial wholesale market strategy, and by ditching a commodity-based approach for our owner value-added branded products, telling our story of sustainability both with farming and our social philanthropy, we have quickly established ourselves as one of the successful CBD companies to come out of Vermont,” said Cy.
“We leaned into the ethos of my SI-MBA training and our roots with Ben & Jerry's, to become a vertically integrated hemp farm and CBD ecommerce company. It was critical early on to resolve the ecommerce operational aspects and associated banking services which have plagued some hemp producers, and with Mascoma Bank’s help we were able to do that. They believe in our mission, it gave us credibility and allowed us to quickly scale up our online business. In barely 2 years we have built our CBD brand and fulfilled retail orders to all 50 states, the USVI and Puerto Rico, with 95% of our business coming from outside of Vermont.”
As one of the first land grant universities established under the Morrill Act of 1862, UVM’s involvement with the farm also extends into research. Heather Darby is an agronomic and soils specialist and professor at the University of Vermont Extension, who is focused on sustainable agriculture and promotion of environmental stewardship of the land. She has been working with Sunset Lake CBD to better understand the impact of hemp farming and researching its ecosystem benefits.
“We've been working with Sunset Lake CBD since their inception on both applied research and also education and outreach. Sort of this integrated program where they have hosted research for our team and contributed to that research that builds on itself and helps us develop it further. They have also helped us educate other farmers, and at the same time we've helped educate them. It's a real two-way collaboration, we’re all learning together in a living laboratory about what’s happening in hemp fields,” said Heather.
“The research has evolved and developed with the needs that we've seen coming from other farms and interest that farmers have to become more sustainable. For example using crop rotation and cover cropping practices to protect and maintain soil quality. Hosting beehives to increase biodiversity. Incorporating biological pest control such as parasitic wasps to control corn borers to create an integrated natural pest management defense. We’re shaping the production of hemp, so it has a positive environmental impact from the start, not changing harmful existing practices.
It’s about the management of the production, not the crop itself, and how to minimize the environmental impact while maximizing the productivity of the crop. This will become increasingly important for producers as they try to differentiate themselves, and Sunset Lake’s attention to the environment will help them,” concluded Heather.
The Sunset Lake CBD operation based in South Hero, farms 35 acres growing 17,000 hemp plants, and has already expanded to 8 full-time employees to meet demand with 4 UVM alumni employed in a variety of roles. The farm’s expansion and business growth has allowed several team members who originally came from across the country to study at UVM, to remain in Vermont after graduating and help fulfil that land grant mission.
“Having come from Tennessee to study at UVM this was the perfect job that allowed me to stay here and get hands-on experience to better understand sustainable farming and business practices. I am proud to work for a company that fosters a non-corporate infrastructure and harvests a plant that is the future of sustainability,” said team member Nora Johnson who graduated from UVM in 2020.
While there are numerous challenges of building a brand in a young CBD market, Sam and Cy are bullish about the future of Sunset Lake CBD. Planning is well underway around increasing their product lines, offering employee ownership, developing marketing and communication strategies to reach new markets, accelerating sustainable operational efficiencies such as reducing packaging waste, and incorporating more philanthropic and social responsibility initiatives into their operation to reinforce their shared prosperity approach.
“Consumers discovered us last year, and we’re now selling directly and on a number of other online marketplaces and consumer sites. By continuing to innovate and develop more products that the market is looking for, we’re confident we’ll continue to build our brand and momentum,” said Cy.
Sam Bellavance summed it up this way. “I like to think we are creating high-value, boutique products rooted in Vermont agriculture produced by real stewards of the land. Think craft breweries or organic, pesticide-free, artisanal health and wellness products. This is where we see the future for our CBD business powered by hemp; a new crop that if handled correctly and with the right environmental attention and product development, can provide a prosperous foundation for farmers and entrepreneurs in our state.”