Will The Hemp Industry Revive New York's Economy?

Nestled near the confluence of the Susquehanna and Chenango rivers in Upstate New York, the city of Binghamton and the surrounding county, Broome, was always a hotbed of agriculture and manufacturing. From the rivers to railroads to highways, the area has been at the hub of transportation networks and grew steadily through the 20th century.

Part of New York’s Southern Tier region along the Pennsylvania border, it was the home of the Endicott Johnson Shoe Company, IBM and later, the flight simulator, which was invented and continued to be manufactured in Binghamton. The area boomed through the Cold War era, in part because of its defense-heavy industries, earning it the nickname “The Valley of Opportunity.”

But after the fall of the Soviet Union in the late 1980s, things began to change and both the city and the region experienced a decline in population and money. The shoe factory once employed more than 15,000, but declined and finally closed in 1998. IBM saw its workforce drop from more than 16,000 in the 1980s to a few hundred before it finally sold the plants in 2002.

“You really saw in the late-’80s and through the mid-’90s the manufacturing sector kind of hollowed out,” says current Broome County Executive Jason Garner.

“We’re a manufacturing community that lost its manufacturing base, not unlike Rochester which lost Kodak, or other places that lost major anchors,” agrees Assemblywoman Donna Lupardo, who represents the area in the New York Legislature. “We were the home of IBM and the Endicott Johnson Shoes that collectively employed (thousands of) people that are no longer employed.”

But recently, a new industry has emerged that officials, entrepreneurs and farmers all hope can help bring the area back to its former glory: hemp.

“There’s a lot of excitement,” Garner says. “It’s really been interesting because from the agricultural side in Broome County it’s giving farmers a cash crop they can grow and make some money on but also on the manufacturing side, it’s bringing manufacturing jobs back.”

In addition to fertile ground, infrastructure and distribution capabilities, New York’s Southern Tier has a workforce that is ready for a hemp revival.

NEW VENTURES

Born in the late 1990s and raised in Broome County, Kaelen Castetter missed the region’s heyday, but grew up hearing the stories and can see the area’s potential for once again becoming a major agricultural and manufacturing center.

A graduate of Binghamton University, a major research university that is routinely ranked among the top public colleges in the country and one of the area’s major employers, Castetter sees an opportunity not only for the area, but for himself when it comes to hemp. At 23, he is the CEO of the Castetter Sustainability Group, his second hemp-based business after Sovereign Wines, a hemp-infused wine company. CSG is a consulting and genetic research company and processor focused on developing the hemp industry in New York State.

“We’re trying to continue to make the Southern Tier a hub for hemp,” he says.

This past fall, CSG worked with 15 farmers across the state to help harvest 150,000 hemp plants over 37 days. The plants were brought back to Binghamton, where an old, empty Kmart in a once-bustling shopping center became a drying facility. The company will soon move to an industrial park in Kirkwood, outside Binghamton, with the goal of expanding the business even further.

Castetter sees cannabis as part of the “infrastructure of tomorrow,” but like many in the area, he also sees the region’s infrastructure of the past as a key to making the area a new hotbed for the industry, thanks in part to the many opportunities to repurpose the area’s buildings, particularly those that once held manufacturing. Combined with the area’s location at the center of several transportation networks, Castetter says he can see why the area’s leaders are getting behind the emerging industry.

“Binghamton, especially, and Broome County has a really good opportunity to become a hub for cannabis,” he says.

Being located at the intersection of three important interstates and having quick access to all parts of the state, including New York City (3 ½ hours), Syracuse (1 hour), Albany (2 hours) and Buffalo (3 ½ hours), make it easy to bring in truckloads of hemp and send out refined products. More than 50 million people live within a five-hour drive of the Southern Tier region.

“The location is perfect,” he says.

“We’re uniquely positioned to be able to accommodate large hemp manufacturers from where we are located,” agrees Garner.

BUILDINGS

CSG is not the only player interested in the region’s glut of manufacturing buildings and easy access to highways.

Following the passage of the 2018 Farm Bill that removed hemp from the list of controlled substances and essentially jump-started the U.S. hemp boom, Garner began to get phone calls from major industry players.

“One thing that happened when they legalized hemp is that we had a multibillion-dollar company named Canopy Growth start to look in the Southern Tier area to build a hemp industrial park,” he says.

One of the major players in Canada’s legal cannabis market, Canopy was looking to expand its hemp operations in the United States. With Senator Chuck Schumer’s backing, the company in early 2019 announced plans to invest more than $100 million in the Binghamton area. Garner visited the company’s Smiths Falls, Ontario headquarters and came away impressed with the company and the possibility for his region.

Garner began to see what Lupardo had been preaching for several years.

“I talked to a lot of their higher ups. Together with our industrial development agency we worked to get them to put that industrial park in Broome County,” says Garner

In July of 2019, Canopy unveiled its new location, also in Kirkwood. In addition, more than half of the company’s hemp farming — about 1,000 acres — was planned for New York. And though Canopy recently announced plans to pull its investment from a few hemp farms in New York, construction continues in Kirkwood.

According to Garner, that was just the beginning and what was once seen as a problem — old manufacturing buildings — is now a draw for the region. Two additional hemp companies, Great Eastern Hemp and Southern Tier Hemp, have also set sights on Broome County’s hemp industry.

“What’s happened since Canopy Growth came in is we had two other large processors that bought huge buildings in Broome County to process hemp and turn it into CBD oil,” he says. “In 2019 we saw three major hemp manufacturers close on huge manufacturing buildings in Broome County and there’s other hemp industries that have looked into coming to Broome County.”

Lupardo also points to the area’s history of manufacturing as a major draw, not just in terms of available buildings, but in a workforce that is eager to get back to the manufacturing jobs the area was once famous for.

“We’ve got manufacturing buildings, we’ve got a history of innovation and a willingness to try something new and take a risk,” she says.

AGRICULTURE

Beyond the city limits and off the highways, however, Broome County has one more feature it is looking to leverage as a potential piece of a hemp-based future.

“We have the agriculture that can support it,” Garner says. “A lot of these companies when they came in wanted to know how many acres of farmable land are within a 40-50 miles radius of their processing facility.”

With large swaths of open fields and farms, Lupardo says the area is ready for a new industrial crop, which is why she has been pushing for hemp for the past six years, not only in the Legislature, but with the region’s farm community. She says that for years she carried a hemp bag filled with various products all made from the plant she calls an “industrial workhorse,” to help explain to the region’s conservative-leaning base the difference between marijuana and hemp and that they should consider growing it as a possible cash crop.

“People were really excited about it once they understood it,” she says, adding that much of her job was educating the public about the possibilities. “We weren’t talking about something that had mind-altering effects, that it was something you could do stuff with and manufacture.”

Garner repeatedly credits Lupardo for the work she’s done and says that while most of the manufacturing interest right now is in CBD oil and its uses, he hopes to see other companies also move to Broome County to explore the other manufacturing uses of hemp.

“Whether it’s paper or rope or CBD oil or hundreds of other types of products, there’s a lot of practical uses for it,” he says.

FUTURE

With all the necessary pieces in place, all parties agree that the Binghamton region is poised to become, as Senator Schumer puts it, “the Silicon Valley of Hemp,” and to further cash in on cultivation and manufacturing when the state legalizes recreational cannabis which was expected this year prior to the COVID-19 pandemic forcing the Legislature to alter its plans.

Garner says it is not the be-all, end-all to the area’s economic problems, but his office is making the most of the emerging industry and is willing to offer tax incentives to businesses that will bring jobs to the region, not only through temporary work like construction, but long-term employment possibilities.

However, so far none of the companies that have located in the county have made use of available state grants to do so, primarily because of the depth of resources in the region.

“We don’t have to give out a lot of grants to get people to come here. We have a lot of benefits on what these companies are looking for based on what we have already,” he says. “Having this initial foothold as this industry gets bigger, I think you’re going to see more jobs get created across the county.”

Lupardo is also excited about the possibilities that hemp can bring and says after years of hoping a new IBM or shoe company would come and save the day, residents are also now getting excited at the possibility of new, home-grown industries to help lead an economic resurgence.

“If prominence is a place where people can work hard and make goods they can feel proud of and take care of their family, then definitely,” she says.

Castetter agrees and says the region has a “perfect storm” of political will, an area known for its research and spirit of innovation, low cost of living, easily accessible farmland and buildings and warehouses available for repurposing.

“It’s an exciting time,” he says. “We have the opportunity to make 1,000 millionaires.”