Kim Kovacs is the chief strategy officer at Santa Fe Farms, a leader in the development, production, extraction, manufacturing and distribution of hemp products. She was formerly the CEO and chair for the Arcview Group, a cannabis and hemp financial firm. We we took the opportunity to speak with her about “socially-conscious investment” in the hemp industry.
The Paper.: What drew you to work in the cannabis and hemp industries?
Kovacs: Well, I had my first “a-ha” moment with hemp during an event last year. We did Global Hemp Day. We did this in collaboration with CannaTech out of Israel—I was at Arcview at the time—and what we decided to do is really highlight the hemp industry versus CBD, which a lot of people have been talking about. There was so much going on with CBD, and that was the center of focus. But no one was addressing industrial hemp and all of its uses.
When we did this two-day show, we had probably about 40 different thought leaders from different countries including India, Zimbabwe, China, Canada and Sweden—it really was a Global Hemp Day. They were talking about how industrial hemp that’s grown in local indigenous regions could really transform areas of the world—not just from growing the hemp and sequestering carbon, but from providing feed for humans and animals, providing products that they can now use for textiles or advanced materials.
I had no idea that it had this depth to it, because it had been illegal for so long. It was quite an eye-opening experience for me, and one that really was very transformative for me.
As I started to look at this, at the same time, Arcview was launching a consulting practice and really building on that. We started to really engage companies around hemp, moreso than cannabis, and it was fascinating to me to see how big industries were trying to look at their ESG strategy. They want to reduce carbon. They want to be sustainable. But how do they do that? How do you do that when it’s such a nascent industry and there isn’t enough supplies?
I love the example of LEGOs or Levi’s. They would switch from cotton or plastic immediately if hemp were available in the supply chain, but it’s not.
So when I started to get to know Santa Fe Farms and what they were doing, and how they were approaching the market, saying, “We get why hemp is so incredible. But how do you get there?” How do you put the supply chain together so that big industry can really look at this and say, “We’re gonna make the switch”? That is really what Santa Fe Farms is doing. We’re creating these opportunities for big industries to come in to partner with us early, because it’s going to take investment from all of us. This is the next industrial revolution.
You mentioned ESG. Can you explain what ESG investing is and why hemp is especially suited for it?
So ESG stands for Environmental, Social and Governance. Companies are really getting the memo that we have to change how we do business and what we’re investing in and supporting for the benefit of the planet. Whether you believe that climate change is real or not—what’s real to me is that we’ve got an island as big as Texas in the middle of the ocean that’s filled up with plastic. That’s real. That’s not going away. So we can have the scientific debate on cause and effect, but the reality is is that the plastic island is still sitting there.
ESG is about creating pathways for companies and investors to finally align on programs and opportunities that help the environment, and a lot of that is focused on carbon and how we can reduce our carbon footprint.
So the “E” for hemp is that it not only sequesters carbon, it also regenerates the soil. And it can be turned into products that continue to sequester carbon. So, for example: building materials. You can start to use hemp instead of concrete, or you can use hemp fibers and different parts of the plant to create wood or paper products instead of cutting down trees.
Now the “S” part—this gets really interesting. With cannabis, when a new state comes online, one of the key areas that they’re focused on is social equity, social justice. Right now New Mexico is working on their social equity programs, understanding that we incarcerated a lot of people under the cannabis laws. So there’s a desire for payback there that the cannabis industry believes is important. For the hemp industry—we believe the same thing.
But who was really affected most regarding land use in the United States? Indigenous people. We took all their land. And instead of treating them as slaves or property, we just killed them.
At Santa Fe Farms we’re recreating these hemp industrial programs that embrace the Indigenous land and culture, so that we can grow hemp, and they can monetize. Think about the carbon credits that are now available. Our mission is to bring this plant to these lands as a partner and to work with other industries and with Indigenous tribes to say, “Let’s provide hemp as a solution here.” We now work together symbiotically to create these opportunities, and that’s what we’re all about.
Now we haven’t solved the “G” for hemp yet, but we are working to find a way. I think the “G” is going to come with creating standards and creating measurable results around carbon sequestration and defining how you get a carbon credit from hemp.
As a global citizenship economy, we have to make the decision that we’re going to invest in hemp right now. We’ve got thousands of companies that are trying to tackle this problem, and those little companies aren’t going to be able to make that massive change. We need the big families and the big institutions in the world to say, “We’re in.”
Santa Fe Farms is a hemp company that is involved at every level of the industry, from seed genetics to proprietary cultivation to farm partnerships to extraction and processing to retail and industrial product development. Find out more at santafefarms.com.