Editor’s note: Startland News selected 10 Kansas City firms to spotlight for its annual Startups to Watch list. The following is one of 2020’s companies. Click here to view the full, ranked list of Startups to Watch.
United American Hemp is cultivating one of the region’s largest genetics operations just outside Louisburg, but the emerging startup’s competitive advantage comes from a sentiment often derided in the business community: Midwestern nice.
Elevator pitch: United American Hemp collaborates with some of the most respected cultivators and geneticists across the United States to breed a new generation of plants that meet modern agricultural needs.
• Founders: James DeWitt, Michael Wilson
• Founding year: 2019
• Amount raised to date: Bootstrapped
• Noteworthy investors: James DeWitt, Michael Wilson, Jason Mispagel, Josh Hill, Lloyd Hill
• Current employee count: 9
“A lot of people on the East Coast are starting to learn what that means,” said Michael Wilson, co-founder of United American Hemp. “This is an international business based in the Midwest, and while there’s no one really at our scale right now, we have a great potential to continue doing well because we treat each other and customers kindly. It’s not about screwing anybody over.”
With conservative revenue projections of $3 million to $6 million for 2020, the startup is putting finishing touches on two 3,000-square-foot greenhouses for producing hemp seeds and plants, in addition to 34 acres of farmland for growing clones for farmers across the region.
The goal: year-round production to serve customers hungry for access to a new market, said co-founder James DeWitt.
“We want to have a perpetual harvest where we keep moving every five weeks or so,” he said.
“From a farmer’s perspective, one of the biggest complaints is from people who are looking for quality genetics that have a pedigree and are consistent and stable. That was what we sought to solve in Year 1,” added Wilson, referencing the year-long process leading up to the farm build-out. “Now when you look at our catalog of products, we’ve got one strain of genetics for high-yield CBD, and while some people might have 50 strains, they can’t guarantee that all 50 of those actually work.”
Click here to learn more about the road to United American Hemp’s first harvest.
The startup is driven by a strategy informed by experience, the co-founders said. Wilson was the founder of the Niall luxury watches brand. DeWitt is the former COO of a private wealth management firm. Co-owner Jason Mispagel brings knowledge of agriculture technology and equipment. Farmers Josh Hill, Lloyd Hill bought in thanks to their connection to the land and years of hands-on grow-how.
Click here to learn more about United American Hemp’s partnership with Year-Round Garden.
“What we’re doing is just a dramatically different type of startup. Most of the time, you’re thinking tech in the Crossroads, downtown, a coworking space,” Wilson said. You don’t ever think about somewhat suburban guys going out into farmland and getting into agriculture.”
The co-owners form a team of Swiss Army knives with unique dynamic, he said.
“There’s a sense of camaraderie that’s been built,” he said. “That’s something I hadn’t felt in a long time — what it’s like to really build something with somebody else. And it makes the whole business dynamic different when everybody is an owner, not just an investor.”
And despite taking a leap into a new market, the co-owners are quick to de-risk the endeavor as much as possible, they said.
“As we get into other areas of the hemp or cannabis industry — potentially drying technologies and other emerging market segments that actually make sense for us — we’re not going to go out and raise $2 million to try to jump in,” DeWitt said. “We have to think about how are we going to protect ourselves? How are we going to protect our farmers in the long run?”
One way is fueling growth through the profits of the company, not seeking additional investors, Wilson and DeWitt said.
“It’s a slower strategy, and this business could already be a lot bigger if I wasn’t honest and just went out to raise capital. But there are plenty of people who are big today that won’t be around in three or four years because of the actions they’re taking now,” Wilson said. “We’re in a situation where I get to think about building a damn good business, not whether I can cover a loan amount for this month.”
2020 is a year to prove themselves, he acknowledged.
“Last year, we were the little guys with 1,000 square feet. And now we’re looking at being the largest producer of genetics in the general Midwest. Once people start seeing this and understanding the scale of what we’re producing, that puts us in a whole different class,” Wilson said. “But now there are also larger expectations — timelines to be met, products to prove out. And really we prove ourselves in October when all of our farmers have a great harvest. That’s our goal.”