New Stanton area hemp processor CAMO closes, stranding farmers

A company that seemed poised to make Westmoreland County a hemp hub has folded, leaving local growers with nowhere to sell their crops.

Commonwealth Alternative Medicinal Options shut down its 45,000-square-foot CBD processing facility near New Stanton as the price of hemp collapsed.

“The bottom line on it is, we saw over a 75% decrease in prices for the finished products,” CAMO Chief Operating Officer Mike Moody said.

CBD isolate — the purified form of hemp extract CBD — sold for about $6,000 a kilogram in May, according to industry marketplace kush.com. In January, the price had plummeted to about $1,600 a kilogram, according to industry monitor Hemp Benchmarks.

“The supply surged ahead of demand much faster, and demand wasn’t growing as much,” Moody said. “We didn’t move fast enough. The market moved faster than us.”

CAMO founder Matthew Mallory did not respond to a request for comment.

The company employed about 25 people at its peak, Moody said.

“It was tough to let those folks go. A lot of blood, sweat and tears went into it,” he said.

CAMO grew hemp and contracted with local farmers to grow more.

“We got a really good crop, and then that collapsed, and we still have crop that hasn’t been sold,” Moody said. He’s still working to sell off the company’s equipment and leftover product.

One local grower, who asked not to be named, said he had a deal to sell hemp to CAMO. Then the company closed.

“I’m still sitting on my product,” he said. “I have not sold a pound.”

He spent more than $30,000 to start growing hemp and has about 2,000 pounds of unsold plants.

The 2018 federal Farm Bill legalized hemp for the first time since the 1930s. Farmers jumped on the new opportunity, creating a glut of supply that the market couldn’t support.

“It’s not as pretty as it was (in) May of last year,” the Westmoreland County grower said. “It’s just bellied up.”

He’s talking to other processors to try to find ways to sell his 2019 crop. He’s hasn’t decided whether to grow hemp in 2020.

“I’ve got too much investment just to drop this whole project,” he said.

The price crash has had national reverberations. GenCanna, a major hemp processor in Kentucky, filed for bankruptcy this month, according to the Louisville Courier-Journal.

State Rep. Eric Nelson, R-Hempfield, said CAMO’s closure was a major blow for the local hemp industry.

“It hurts us. That was a big resource,” said Nelson, who has been an advocate for hemp production in Westmoreland County.

CAMO did not receive any state or local money, Nelson said.

However, the company did lease land from the Westmoreland County Industrial Development Corp. for $1.

The IDC and local nonprofit Greenforge spent $100,000 on specialized harvesters for hemp farmers. Hemp is a notoriously tough crop to harvest, and the county’s two harvester machines were unable to handle it. They were sidelined during a September harvest, which continued by hand.

IDC officials could not be reached for comment.

Nelson still sees potential in hemp.

The plant’s fibers can be used in textiles and construction materials. There’s not much infrastructure in place yet to create those products, but they could become viable in the next year or two, Nelson said.

However, hemp fiber does not offer the same high profit margins that CBD seemed to promise last year. And it’s unclear whether CBD products will ever approach anything like their former heights.

“There was all this CBD, and the bottom fell out of the industry,” Nelson said.