A joint venture between a publicly traded hemp- processing firm and a Charleston company that makes cannabidiol oil and other derivatives said Monday they will open a $3.2 million facility in Ridgeville.
United Cannabis Corp. of Golden, Colo., is teaming up with Blue Water Green Bridge LLC on the project at Pine Hill Business Campus in Dorchester County. The CBD processing plant will employ 52 workers. Operations are expected to begin during the first quarter of 2020.
The new business is one of the first in South Carolina to take advantage of the federal 2018 Farm Bill, which legalized industrial hemp crops, and a succeeding hemp-growing program regulated by the state Department of Agriculture.
It's also among the first hemp-related firms in the Palmetto State to seek tax incentives. Dorchester County Council was to vote Monday on a tax break that would effectively reduce Magnolia's tax assessment from 10.5 percent to 6 percent and the state is offering the company tax credits tied to job- creation thresholds.
"South Carolina's hemp farming program has brought enormous opportunity to farmers, and capable, large-scale hemp processing is a key part of future development as the industry grows," said Hugh Weathers, state agriculture commissioner.
The company is leasing about 25,000 square feet of space at Pine Hill, where it will invest in large greenhouses, lab facilities and a site where CBD can be extracted from hemp. Magnolia Botanicals will also conduct research into the cultivation, propagation and selective breeding of industrial hemp.
"Establishing a state-of-the-art processing facility in Dorchester County gives us a competitive advantage in this emerging market," said Richard Mudd, CEO of Blue Water Green Bridge.
While the company's announcement Monday put the investment and employment totals at $3.2 million and 52, respectively, the tax incentive agreement with the county only requires a $2.5 million investment and 10 jobs over a five-year period.
Publicly traded United Cannabis has struggled financially, with losses of $176 million and a working capital deficit of $12.1 million through the first nine months of 2019, according to a filing with the Securities and Exchange Commission. Blue Water Green Bridge is a privately held company.
South Carolina is seen as "a new and emerging market" in Hemp Industry Daily’s report on the best places to do business, which notes the Palmetto State is one of a handful "where conditions are ripe for a thriving hemp industry in the years to come."
Gov. Henry McMaster signed a bill this year that expands the number of permits that can be issued to hemp growers. While 40 were issued prior to the law, 114 farmers have obtained approvals to grow as much of the plant as they want. Previously, they were limited to 40 acres each.
"South Carolina has a rich history in the agribusiness sector, and today’s announcement ... shows that this industry continues to flourish in the Palmetto State," state Commerce Secretary Bobby Hitt said in a prepared statement Monday.