They’re Betting the Family Farm on Weed

Come summer, the warehouse at Hepworth Farms will be filled with Cherokee Purples, Pink Berkeley Tie-Dyes and dozens more of the heirloom tomato varieties produced by this seventh-generation family farm in New York’s Hudson Valley.

But this winter, the space is piled high with something else: cannabis flower.

In January, workers there stood elbow to elbow over stainless steel tables, trimming it by hand. Nearby, thousands more pounds of herb awaited processing in apple crates or sat curing in plastic drums. All of it will find its way into New York State’s newly opened recreational dispensaries as bagged flower, pre-rolls, vapes, blunts, gummies, bubble hash and more, in many cases bearing the venerable Hepworth name.

In the organic vegetable world, Hepworth Farms, in Milton, N.Y., is a regional power player, a name brand in everything from lettuces to leeks, and the rare grower that has managed to combine farmer’s market bona fides with serious scale. Hepworth’s produce graces C.S.A. (community-supported agriculture) boxes and is beloved by the discerning members of the Park Slope Food Coop, in Brooklyn. As grass-roots organic growers go, Hepworth is as pure as they get. But the farm also supplies supermarkets and restaurants all across the Northeast; in peak season, its owners said, Hepworth moves 15,000 cases of produce every day.

Amy Hepworth, who took over the farm in 1982, was once the subject of a glowing New York Magazine profile, calling her a “cult hero” to the city’s locavore set, for transitioning her family’s conventional farm into a nearby source for dozens of varieties of sustainably grown fruits and vegetables. She and her identical sister, Gail Hepworth, run the business together, and this year, in the farm’s 204th growing season, they added marijuana to the mix.

“It is part of a successful multigenerational farm to want to adapt and do new things to keep the model — you know, progressing,” Amy Hepworth said. “To succeed, you have to keep innovating and changing.”

Only 10 of Hepworth’s 500 cultivated acres were devoted to cannabis last fall, but this number belies how much is riding on the success or failure of the undertaking. The Hepworth sisters’ investment in marijuana goes far beyond land; they are not just growing the stuff, they have a license to process it, too.

They have spent almost $8 million on the venture, investing in a state-of-the-art laboratory and a range of processing equipment. They have also hired a chemist, a plant biologist, marketing and sales executives, and a small army of administrators to keep up with the mountain of compliance work cannabis requires.

The payoff, they hope, will be a crop lucrative enough for the farm to continue supporting the family into the next generation, as it has since 1818. “What’s happening here is transformational,” Gail told me, as we watched men in backhoes digging out a foundation for an extension on the warehouse, originally constructed in the 1940s. “You could say that we’re betting the farm on it.”

‘People say you can’t grow it outside’

After a hemp debacle, the sisters double down on cannabis

On an unseasonably warm October day, Amy Hepworth, 62, stood between rows of cannabis plants tall and bushy enough to obscure her almost completely. Outfitted in bluejeans, a straw hat and a yellow Patti Smith T-shirt, she was hand-trimming some of the farm’s 30,000 cannabis plants, a task she found meditative, she said.

Cannabis is a notoriously fussy crop, requiring frequent feeding, trimming, tending and inspection to avoid issues like mildew and pest damage. Across the United States, it is grown primarily indoors, where farmers can control variables like light, temperature, airflow and humidity.

Amy Hepworth finds this arrangement repugnant. The plant “wants to be free,” she said, and it can reach its fullest potential only in natural sun and living soil. “It is a plant, and it belongs in agriculture,” she continued. “People say you can’t grow it outside. Well, I beg to differ.” She held up a fat flower glistening with resin to prove that her plants were thriving without the help of LED lights, which are used indoors and produce harmful emissions, she said.

The sisters’ decision to get in on the marijuana business was the outgrowth of an earlier, slightly disastrous foray into growing hemp: another variety of cannabis, cultivated for its fiber and for cannabidiol, or CBD, which is used to treat anxiety, insomnia, and epilepsy (hemp does not contain the tetrahydrocannabinol, or THC, that gives marijuana its psychoactive properties). The federal government made growing hemp legal in 2018, sparking a nationwide rush among farmers.

Growing the plant was an appealing prospect for the Hepworth sisters, both because CBD oil was fetching handsome prices, and because hemp was known to improve soil health and sequester carbon. So, like many other farmers, they dove headlong into the market, planting 200 acres of hemp in 2019, plus investing extensively in machinery to extract CBD, while producing their own line of Hepworth-branded CBD products.

But the CBD market crashed almost immediately. “When we started the harvest, the price was $35 a pound for hemp biomass,” Gail Hepworth said, “and when we ended, it was 35 cents.” The crop had been overplanted across the country, and demand had not kept up with supply. By 2020, much of the farm’s wealth was sunk into 2,000 liters of CBD concentrate that was only worth a fraction of what the sisters had been counting on.

The evolution of a centuries-old business

A single mother, and then her daughters, reinvent their farm

A family farm, by its nature, is a changeable and ever-changing thing. Fields turn over from one crop to the next; markets evolve; new generations make their mark. Not much is known about the farm’s first 100 years in Milton, but by 1918, the Hepworths were running a roadside stand selling vegetables and fruit juices — and, during Prohibition, fruit mash for making moonshine — to tourists escaping New York City for the Catskills. By 1960, when Amy and Gail were born, the business had transformed into a 900-acre fruit farm, and the Hepworths were making a good living selling apples wholesale to supermarkets all over the country.

Their fortune began to change when Gail and Amy were teenagers. In 1972, their father took off, leaving their mother, Lois — a college music major who longed for a career outside agriculture — with five children and a farm to run. She surprised everyone by making a success of things, scaling back the wholesale apple production as that business became less profitable and focusing instead on the family’s more lucrative retail farm stand. She sold off some farmland, and used the proceeds to help pay for her children to go to college.

Amy Hepworth went to Cornell University’s College of Agriculture and Life Sciences, where she encountered new organic and low-chemical farming methods that inspired her to return to Milton, where she shifted the farm’s focus to more ecologically sustainable practices. She started selling produce to the Park Slope Food Coop in 1984, a relationship that opened doors to other organic produce buyers, and which continues to this day. In 2008, Gail Hepworth rejoined the family business after a career in biomedical engineering. She used her corporate experience to help expand the farm to its current size.

Hepworth now cultivates more than 200 varieties of vegetables across its 500 acres; it is one of the largest organic tomato growers in the Northeast. Whole Foods and FreshDirect are major customers, as well as several other food distributors. But scale has not led to massive profit. “Amy’s way of farming is very expensive,” Gail Hepworth explained. Margins on their vegetables have always been slim, and lately, as costs for everything from transportation to labor to packaging have surged, they have gotten even slimmer.

Grappling with the shrinking profitability of vegetable farming, and in a hole from their hemp foray, last March, the sisters applied for, and received, one of more than 200 conditional cannabis cultivator licenses that New York State handed out to farmers in 2022, a year after the sale of recreational marijuana was legalized in the state. With the right strategy and a little luck, the Hepworths thought, marijuana could be the missing piece of their financial puzzle.

‘We have to hold our own’

As the sisters invest in processing, a partnership is born

Even with their background in hemp — and experience that Amy Hepworth may or may not have growing small amounts of marijuana to give away to friends, dating back to the 1970s — the sisters knew that to be players in the cannabis market, they needed specific expertise.

So last May, they partnered with Pura Industries, a cannabis company run by Jonathan Lasser, a Hudson Valley native. Mr. Lasser and his team, who specialize in so-called ultra-premium or artisan cannabis products, brought to the table decades of experience from the California market and a library of more than 200 cannabis varietals.

Since cannabis hasn’t been widely cultivated outdoors in New York State in many decades, growers are still experimenting with which cultivars do best here. The team selected 16 for Hepworth Pura’s first crop, based on market demand and suitability for the growing conditions; varieties with names like Thin Mint, Gorilla Glue/Purple Punch, and Cookie Dog. “It’s a little bit of a guessing game,” Mr. Lasser said of the process.

The 2022 crop yielded 158,000 pounds of cannabis. Retail brands like Smokiez and Jetty have already claimed some of this product, which was harvested with the help of chromatography analysis, a lab technique that measures cannabinoid levels from samples of plants in the later stages of the growing process, Mr. Lasser said.

Hepworth Pura has invested heavily in machinery to extract THC, the chemical found in vape cartridges and edibles; they are processing not just their own harvest but also those of other growers in the region. Mr. Lasser is developing more than 100 different retail products, some of which will feature the Hepworth and Pura names together and separately, he said. The hope is that Hepworth’s brand in vegetables — which stands for quality and sustainability — will translate to New York’s marijuana buyers.

As the market grows, the sisters hope that farms like theirs will continue to receive growing licenses. At the moment, specialist indoor cannabis growers dominate the medical marijuana marketplace. “We want this crop to be good for the agricultural industry in New York because that industry is at risk,” Gail Hepworth said, adding that farmers’ costs are increasing faster than food prices have risen. “The farmer’s getting squished to an extent where they’re just scratching their heads wondering why are they doing it.”

But cannabis is itself another risk. For one, the plant isn’t easy to grow. “Cannabis is the most labor-intensive plant on our planet,” said Colin Decker, the founder of Sensei Growth Consulting, a New York-based cannabis industry consultancy. “You need skilled labor that understands the nuances of the plant.” It must be regularly pruned and de-leafed, as well as inspected for mold, mildew and insects. Caterpillars can be an issue, Mr. Decker said, as well as aphids and spider mites, all of which seem to love marijuana just as much as humans.

There are other complexities. Because the drug is federally illegal, it cannot cross state lines, meaning cannabis sold here must be grown here, too. New York State’s cannabis regulations are extensive, and still evolving, adding a substantial administrative burden. Because of a shortage of local labor, many farms rely on foreign workers with H-2A visas to tend their crops, but these visa holders are not permitted to handle marijuana. And then there are security needs. Though the state’s requirements are still in development, Hepworth Farms now has 24-hour video surveillance and guards.

Cannabis cultivation exists in a legal gray area, which means many banks will not do business with any farmer that grows the stuff, even if they do so with a license from the state. Growing cannabis has cut Hepworth off from some longtime banking partners, leaving the sisters to rely on family, friends, investors and alternative lenders.

Even after jumping through all those hoops, Gail Hepworth said, it’s possible that the same old pattern that has established itself in food production will emerge in the cannabis market: farmers do all the work while the money goes to larger middlemen. The Hepworth sisters have lived through it with apples, and then vegetables, and then hemp.

This time, with cannabis, they are hoping that their processing license will allow them to assert more power in the long run. They are prepared. “This plant is so abundant, there’s just not the need to be greedy,” Gail said. “People who are greedy will ruin the industry. And believe me, they’re coming, and we have to hold our own.”