A few days after the 2018 Farm Bill passed allowing Hoosier farmers to grow hemp, Ken Thieneman formed his business plan. Now, the 14,000-square-foot Biodynamic Extraction is ready to open and process 1 million pounds of ground hemp flower a year. Hemp flower is typically used to produce cannabinoid products, such as CBD.
At that rate, Thieneman said BDX is the largest processing facility in the Midwest. To process the high amount of ground hemp flower, BDX uses four CO2 extractors at its facility at 17219 Foundation Pkwy. Through the CO2 extraction process, hemp flower becomes crude oil, which is then winterized. Ethanol is used to purify the product. The then can be made into isolate or broad spectrum. The company also sells the crude oil, the distillate and the full-spectrum product.
“We don’t make the products here. We are the processing before the products,” Thieneman said. “We have an internal white labeling company, and we also sell to brokers who then sell it to a list of contracts.”
BDX receives its ground hemp flower from 26 different farms, 25 of which are in Indiana. Thieneman said BDX controls the genetics of the hemp plant prior to growing it.
For Phase 2 of BDX, Thieneman plans to open a vault within the location to store several months’ worth of hemp. Phase 2 also will see the addition of a 50,000-square-foot BDX facility in Westfield. The Phase 2 timeline depends on the market success of the products.
“We need to grow hemp in the Midwest, process it in the Midwest and consume it in the Midwest,” Thieneman said.
Thieneman, a Westfield resident, chose Westfield as BDX’s home because of its proximity to several nearby interstates. He also wants a skilled labor market and to build in a growing city.
“A lot of people jumping into the hemp industry go to a pole barn or a metal building, but you have to be able to control the product,” Thieneman said. “We wanted to build in a city that was growing and had a bright future.”
A few miles north of BDX, NXT-Labs also processes hemp with CO2 extractors. NXT-Labs has two extractors to process approximately 200,000 pounds of biomass a year.
Co-founder Wes Holcomb originally opened a retail store in Carmel to sell CBD products. Then, he and his father Toby decided to get into the hemp wholesale industry.
NXT-Labs receives its hemp from five Midwest farms.
“We want to help Indiana farmers and give them a location to bring their biomass to be processed,” Toby said.
Marijuana and hemp plants are closely related. If marijuana becomes legal, the Holcombs would consider shifting their business. However, they aren’t necessarily in favor of legalization because if a marijuana field is grown too close to a hemp field, the plants can cross contaminate.
“Hemp can be sold as marijuana on the black market, and there can be cross contamination in plants,” Wes said. “When that pollination goes into a hemp plant, it becomes a hot plant.”
When a hemp plant becomes hot, or when it has more than the 0.3 percent legal amount of THC in its biomass, farmers have to destroy the crop.
However, since the CO2 extractors can be used for many different botanicals, the Holcombs can process biomass other than hemp, such as botanicals for shampoos, essential oils or colognes.
“Say the hemp industry fell apart, we can go into another market,” Toby said. “That was the whole idea to buy these (CO2) machines is because (other machines such as ones using ethanol) are limited in what they can do.”
Selling to food-grade clients
One of the reasons Biodynamic Extraction wanted to build out a facility is because of its goal of being a GMP, or good manufacturing practices, certified facility.
Since it’s GMP-certified, BDX has the opportunity to sell its products to a food-grade client like Frito Lay or Coca-Cola.
“We are waiting on the FDA nationally to say CBD can be a good supplement. When they do and say Coca-Cola wants to make Coca-Cola CBD, we can get that order,” BDX President Ken Thieneman said.