Irish start-up raises funds to get farmers to grow hemp using drones
Greenheart CBD looking for more farmers domestically and abroad to grow the crop
Greenheart CBD founders Paul Walsh and Mark Canavan: Many farmers find it difficult to obtain financing from banks for hemp production due to its connection with cannabis.
An Irish start-up has just raised $5.3 million (€4.5 million) in financing to provide loans to farmers in Ireland and across the world to encourage them to grow hemp for use in cannabidiol (CBD) products.
Co Meath-based Greenheart CBD, which was founded by Paul Walsh and Mark Canavan two years ago, uses drones and artificial intelligence to help maximise crop cultivation by continually monitoring plant health.
The company, which previously secured a government licence to grow hemp with farmers in Co Wicklow, has developed a number of organic CBD products for consumers that have full traceability “from seed to shelf”.
CBD is the lesser-known compound found in the cannabis sativa plant; its more famous sibling, tetrahydrocannabinol, or THC, is the active ingredient in marijuana.
Having recently signed a major distribution contract with Uniphar to distribute its products, the company is now looking to expand its supply chain. It has managed to grow, in retail terms, $12 million worth of crop so far from 10 acres in Ireland but now wants to secure more hemp, particularly from the developing world.
Despite the growing popularity of CBD products, many farmers find it difficult to obtain financing from banks for hemp production due to its connection with cannabis. Greenheart is therefore stepping in to lend directly to them via smart contracts, which are built on blockchain technology.
Farmers essentially sign up for a package that allows them to start growing hemp immediately. As well as seeds, they get a drone and other smart technology that allows them to produce the purest crop at a decent yield. Greenheart then buys the crop from them.
The drones are used to continually monitor the health of the crop, and they have retractable arms that can remove weeds, pick buds and so on.
“There hasn’t really been an upgrade in terms of technology in agriculture since the introduction of the tractor but I believe that drone technology could change everything,” said Mr Walsh.
A typical loan to a farmer using the company’s lending model could be anywhere between $500 to $50,000 over five years, with interest at 5 per cent. Greenheart estimates that a farmer in the developing world might typically realise $1,500 per annum from existing cash crops but that they could get $2,500 per crop cycle from an acre of CBD cultivation.
According to Mr Walsh, its model could transform the livelihoods of farmers while also giving the company access to the highest-quality hemp, while consumers get full traceability of products that aren’t harmful to the environment.
“Greenheart CBD has committed itself to making a difference in today’s world with a unique and original approach to helping smallholders climb from the poverty trap,” said Liam Robertson, chief executive of Alphabit Fund, which has led the $5.3 million fundraiser.
The company is shortly to publicly launch the Greenheart Punt, a digital token that can be bought and sold. The €5.3 million raised has come from investors buying some of these tokens with others to be made available more widely shortly. One punt is equivalent to $0.10 with 150 million tokens minted in total.
Those who have tokens will be able to use them to access Greenheart products at a significant discount. Money raised via the punt will also help the company finance the purchasing of new land for CBD production, and go towards building a decortication plant to enable an expansion into other product lines, including insulation materials and bio-plastics.
Greenheart is already in profit and has secured over 2,500 customers since it launched in January 2020.