420 Valley announces plans for hemp production facility in Las Cruces

Alicia Keyes, Cabinet Secretary of New Mexico Economic Development speaks at the announcement of 420 Valley, LLC business in Las Cruces on Wednesday, Dec. 4, 2019. (Photo: Nathan J Fish/Sun-New

A new hemp manufacturing company with plans to operate near the intersection of Valley Drive and Amador Avenue hopes to revitalize the area and tap into a burgeoning industry.

Plans for 420 Valley, LLC, were announced Wednesday at a ceremony organized by the Mesilla Valley Economic Development Alliance and attended by New Mexico’s Secretary of Economic Development, Alicia Keyes, and the state’s Secretary of Agriculture, Jeff Witte.

Working plans for the 13,000-square-foot facility, at 420 S. Valley Drive, include an indoor grow area, a retail space for a gift shop, a manufacturing area, a taproom and a café with a drive-through.

The new company, co-founded by Scott Bannister and Rick Morales, will be a CBD products supplier, which will cultivate hemp and then extract and refine the oil into manufactured products — such as CBD oil, pens, edibles and topical ointments.

The business, which is expected to be operational by the summer of 2020, is set to begin hiring employees early next year. Those employees will earn an average of more than $33,000 annually; the company is expected to hire 55 employees — with a payroll of $2 million — in three years.

The idea

“This building is 13,000 square feet, and it’s going to encompass different components, including an indoor grow facility,” Morales said. “We’re going to have a retail shop, where we’ll offer 420 Valley souvenirs and gifts.”

Plans to acquire the building preceded any plans for it, Morales said.

“It just so happens that the address for this facility was perfect for the concept,” he said. “Whenever Scott and I looked to buy the building, we really didn’t know what we were going to do with it. We kept telling people, ‘We’re going to have this building. It’s at 4-2-0 Valley. And one of the farmers that we partner with in Deming looked at us and said, ‘You’re (kidding) me, right?’”

Though it's exact origins are unclear, 420 is a common euphemism for marijuana in the cannabis community.

This year, Morales and Bannister partnered with a farmer in Deming to grow about 100 acres of hemp. The harvest was successful, Bannister told the Sun-News, and an indoor grow facility at the sprawling Valley Drive facility seemed to make sense.

“We plan on having a little café where we’ll sell infused drinks,” Morales said. “We’ll have teas and coffees and other drinks infused with hemp oil. We also want to have a taproom, which I think will draw the locals. We’re in the process right now of reaching out to local microbreweries and seeing if they want to partner with us.”

“I really want this concept to be for locals, by locals,” he added.

A growing industry

Production of hemp in the United States has been strictly controlled by drug enforcement laws banning cultivation of cannabis rich in psychoactive Tetrahydrocannabinol. The legal threshold for THC is 0.3 percent, beyond which the crop is legally defined not as hemp but as a schedule I drug under federal law.

Under the state’s new Hemp Manufacturing Act, signed into law by Gov. Michelle Lujan Grisham following the 2019 legislative session, the New Mexico Department of Agriculture and the New Mexico Environment Department are authorized to regulate hemp research production, from the breeding and cultivation of plants, the manufacturing process, and laboratories and production facilities.

A new rule, passed in September by regents of New Mexico State University, allows NMDA to issue and regulate licensing and inspection of laboratories testing raw hemp and protects plant breeders if their plants become "hot," meaning they exceed the 0.3 percent threshold up to 5 percent THC.

Keyes said the hemp industry — still in its infancy — is rife with opportunity for entrepreneurs.

“Projections for the CBD industry are crazy — billions of dollars in this market, rapid growth, and product ideas generated daily, as we learn more about this plant and its potential. 420 Valley will be working to find its place in this market.”

Witte said that, for hemp growers, these are exciting times in New Mexico.

“We started growing hemp a year ago in the state of New Mexico,” Witte said. “We issued over 400 licenses this year, and had almost 8,000 acres of land put into hemp production. We had about 8 million square feet of indoor growth space licensed in the state of New Mexico. We expected (to issue) 50 licenses; we issued 400-plus. That doesn’t happen unless you have a market.”

Furthermore, Witte estimates that about half of the growers who have obtained a hemp license were not growing anything before growing hemp.

“(People) are coming back into agriculture. That’s what’s happening in the state of New Mexico,” he added.

Plenty of incentives

The state’s Economic Development Department has pledged to invest $400,000 in 420 Valley, which the department says represents a continuing effort by Gov. Michelle Lujan Grisham’s administration to target sustainable agriculture and other economic sectors to help diversify the economy.

“Hemp production and sustainable agriculture are essential components of our mission to expand New Mexico’s economy,” Lujan Grisham stated in a written release.

Morales believes the investment by the state will help the company become an industry-leader in the blossoming extraction industry.

The $400,000 state investment comes from the Local Economic Development Act, a closing fund established by the state Legislature to help spur business growth, relocation and expansion. The city of Las Cruces has also pledged $150,000 for the project.

The announcement is the second major agricultural initiative funded by the Economic Development Department in Doña Ana County. In May, the state pledged up to $2 million in assistance to Rich Global Hemp, which took over a greenhouse business in Mesilla Park.

That project faced a temporary setback after the facility was deemed unsafe for occupancy by county inspectors. It has since resumed operations.

When will it open?

“We need to finalize the concept for this building, which is 13,000 square feet,” Morales said. “Then we need to design and build the layout. We need to go through the permitting and inspection process.”

When that is complete, the company will begin the remodel of the facility, buy all of the necessary equipment for the each of the component concepts, “and then open for business,” Morales said.

The company hopes the entire facility will open shortly after the road construction on Valley Drive is complete, in the summer of 2020.