It was a significant decision, in retrospect, for humanity to bind its fortunes to plants. The promise of bountiful harvest settled our nomadic ancestors, and as we domesticated crops, crops domesticated us. Yet many of humanity’s great conflicts across history boil down to a fight over plants. Tea. Silk. Poppies. Sugar. Cotton. Today, one such battle is underway to rehabilitate the image of another lucrative plant with an outsized cultural impact: cannabis.
In southern Wisconsin, two sets of friends are prospecting a legal variety of the plant known as hemp. More specifically, they trade in a hemp extract, CBD (cannabidiol). August Battles and Brandon Marhal shrugged off a turbulent adolescence in Milwaukee’s suburbs to found their CBD cigarette company, Vance Global. Two counties away, Rebecca Ramage and Maureen “Mo” Lawrenz sowed the first hemp seeds that would, in time, sustain their business, Lake Country Growers.
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The two companies aren’t alone. It’s taken just a few years for CBD to be everywhere. It’s sold by grocers, drug stores, gas stations, boutiques and even the last remaining video rental stores. It’s available online to anyone over 18, anywhere in the country (but not through Amazon, which bans its sale). The proliferation is thanks, in part, to Congress, which authorized colleges and universities to use hemp for research in 2014 and then legalized it altogether in 2018, firing the starting gun for the CBD gold rush. Last year, the national CBD market grew to $4.1 billion in sales, according to the cannabis market research firm Brightfield Group. That’s huge one-year growth; another research firm, New Frontier Data, put U.S. CBD sales for 2018 at just $390 million. There are signs, though, that the growth will slow in 2020.
People spend money on CBD for widely varying reasons. About 60% use CBD products to unwind, according to New Frontier Data. This number would include Marhal, who smokes CBD to calm an anxious, racing mind. Almost as many users (58%) find in CBD a salve for physical pain. This cohort includes Lawrenz’s husband, who soaks his body in a CBD-infused bathwater. The jury is still out on solid evidence backing up CBD’s efficacy for treating these maladies, but business hums along nevertheless.
The roof of Miller Park looms over the 11,000-square-foot plant in Burnham Park that houses Vance Global, the ne plus ultra of Milwaukee’s CBD businesses.
Co-owners Battles (CEO) and Marhal (COO) consider themselves millionaires by virtue of their claim that Vance Global’s revenue exceeded $3 million in 2019, its first full year of operation. They hit such heights by producing as many as 1.2 million CBD cigarettes a month. These are separated into packs of 10 and sent on to distributors, who in turn deliver them to CBD shops and gas stations from Milwaukee to the West Coast, where they currently retail for up to $18.
Visitors to the locked facility must present themselves to a doorbell camera, and, following admittance, wait in a lobby beside a portable grill and two small money trees, symbols of good fortune in Japan. Office workers are the first to greet guests, if they can beat the owners’ dogs, Francine and Finbarr. At the far end of the office, just beyond a Ping-Pong table, is the door to the manufacturing floor.
Picture a single Marlboro. Imagine that instead of a milky white rolling paper, the wrapper is translucent, exposing the inner contents like a fresh spring roll. In place of a cheddar-colored filter is a black one pulped from wood. Most importantly, dried tobacco is swapped for a mixture of hemp and lavender. This is the major product Vance Global sells. Dubbed “vances,” a term the pair made up that has no special significance, they look like cigarettes, even though the FDA says they most certainly are not because cigarettes contain tobacco. These wrapped-up smokable sticks of hemp are called “prerolls” in the CBD industry.
“We were the first ones in the country to do a high-potency CBD cigarette, which is over 100 milligrams per cigarette,” Marhal says. “We were also the first ones in the country to do a CBD lavender cigarette.”
Marhal is the founder who set upon the big idea that led to Vance Global, a secret far greater than flavor and potency formulas. He studied conventional tobacco cigarette rolling machines and figured out how to adjust them to process the much stickier hemp. This we need to take his word for, as viewing the machines is off-limits to everyone except company employees. So unique are the production capabilities of Vance Global that the company also fills CBD cigarette orders for outside brands. One features a well-known celebrity they also will not reveal. Well, not exactly.
“You would know this guy, 100%,” Marhal teases.
“He’s old and he’s got a ponytail. That’s all I know,” Battles adds.
Lanky and goateed, Marhal resembles a young Adam Driver. He comes across as polite if somewhat standoffish but warms when invited to discuss the ideas popping in his frontal lobe. A sketch of further production line refinements is outlined on a whiteboard. He starts to break it down. Something to do with air pressure.
“I just said we weren’t supposed to talk about it,” Battles interrupts.
“Oh, yeah,” Marhal says.
If Marhal is the mind, Battles is the gut. His cherubic face and soulful eyes are no obstacle to horse-trading with the legions of middlemen it takes to get their vances sold at a location near you. Battles is the one who seduces distributors with Vance Global’s products and then spars with them on pricing.
“A lot of the distributors get excited because they think, ‘We could probably beat these guys down on price.’ It’s what they do for a living,” he says. “We’ve been able to stay strong and hold our ground.”
Battles also convinced his old bosses at Debt Advisors Law Offices, where he worked for six months, to put up the starting capital needed to meet their first major order. The only reason Vance Global sits in this building is because Battles talked the landlord into slashing rent by half.
Both men are 23. They wear blazers over T-shirts, take long lunches at Onesto, and live a dream they’ve shared since junior high school. They won’t say how much they pay themselves, except to confirm its less than six figures. Still, not bad for a couple of Ozaukee County boys barely past drinking age, who by their own admission did not burn the brightest in their teenage years.
“We didn’t start off with any funding, any money, anything like that. We don’t have college education,” Battles says. “We both failed in high school horribly. I was arrested for marijuana when I was 16, and [Brandon] was driving me around. Now I’m selling the thing that would have gotten me arrested no more than two years ago.”
HEMP VS. MARIJUANA
Hemp and marijuana are both varieties of the cannabis plant. The differences lie in their chemistry. Both produce the active ingredients cannabidiol (CBD) and tetrahydrocannabinol (THC), the compound in marijuana that get users high, but hemp flowers are almost completely devoid of THC. The federal government defines hemp as cannabis plants that contain no more than 0.3% THC by dry weight. Any hemp that tests above this threshold is destroyed. Because the amount of THC in hemp is so low, it cannot provoke a psychoactive response, though the trace amounts can appear on drug tests.
In Jefferson County, Ramage and Lawrenz center their operation on rented farmland. Lake Country Growers currently accounts for five of the 14,041 acres of hemp planted around all of Wisconsin’s 72 counties, as of early August. A total of 2,241 entities applied for the 2020 growing season, split between growers and processors. A hemp marketing study by UW-Madison’s Renk Agribusiness Institute estimated Wisconsin’s crop was worth $482 million last year.
Some of the hemp grown here is earmarked for Lake Country Growers’ own prerolls, which resemble a conventional joint. But these are but a single offering in a single category of a very large roster: pouches of loose-leaf hemp flower for smoking; lotions, relief sticks and bath soaks; edible gummies and oils to be dissolved in a liquid and consumed as tinctures, the most popular form of CBD consumption according to New Frontier Data. There are even CBD-laced dog treats.
“Different comfort zones for different people,” Ramage explains. “The gummies are very popular for people because they feel like a daily vitamin they’ve taken before. The tinctures scare some people because they’ve never done anything like this.”
Lake Country Growers’ products are most popular with women between the ages of 35 and 44, which happens to be the demographic of both Ramage and Lawrenz. The founders place their families at the center of all marketing. The unspoken message: CBD isn’t just for bros, it’s for middle-aged moms, too.
“We want our customers to see that our kids are participating and taking the products, and that we’re taking them ourselves,” Ramage says. “We’re helping to debunk the persona of who uses CBD.”
Of their seven children, ages 10 to 24, three use CBD. Ramage’s daughter uses it to calm down in the evenings, and her son uses it to alleviate some symptoms of ADHD. Lawrenz’s youngest child, Eve, asked her grandmother to place a few drops on her tongue during a bout of homesickness. All this despite Ramage being a total square when it comes to CBD’s cousin. “I’ll go on the record: I’ve never even smoked marijuana,” she says.
The seeds for their enterprise were planted a year and a half ago. For Lawrenz, the time was right to trade urban life in Brewers Hill for the rural atmosphere of Watertown. She didn’t know it, but Ramage was looking to the country as well. A farmer’s daughter, Ramage recently learned of her brother’s hemp experiments on the Iowa farm where she grew up. She investigated Wisconsin’s new hemp pilot program and decided she wanted in. Discussing details over New Year’s Day cocktails, Lawrenz realized she wanted in, too.
“My husband always wanted to work on a farm, and we were moving out of Milwaukee after 18 years. I said, ‘I think this would be fun to do it together,’” Lawrenz says.
They began on 10 acres, double the land they now rent thanks to the difficult lessons of that first year. Toiling all summer, the two families coaxed thousands of pounds of hemp from the Wisconsin soil. They secured a processor but found that the market demand wasn’t high enough to merit processing their entire yield.
This year is better. They are averaging three to five hours a week out in the fields this summer, versus 40 hours in 2019. Planting was finished in a single day; last year’s required 11. The lighter schedule is made possible by the experience gained with one agricultural season under their belts. It’s also all the more remarkable since Lake Country Growers shifted from a side gig to a full-time occupation in summer 2019 after Ramage and Lawrenz were abruptly let go from the direct sales company they had worked for the previous nine and twelve years, respectively.
There are no promises in hemp farming, but a good rule of thumb is one pound of flower per plant. If things go as planned, they expect to harvest 5,000 pounds of dry flower. The rest of the plant is useless for CBD purposes but has myriad commercial and industrial applications; Ramage and Lawrenz are eyeing up chicken bedding.
The pair will hire help in a pinch – say, during harvest time, or to quickly weed the rows before an event – but otherwise, it’s only their families out there with the ladybugs they purchased on Amazon. Both women’s husbands have full-time jobs and pitch in during their free time. Their kids are also on farm duty, even if Lawrenz’s children return to boarding school reeking of skunky cannabis.
Time not spent in the field is funneled toward public relations. Despite being completely legal and incapable of altering the mind like marijuana, CBD products, particularly smokables, can carry a stigma. The plants look identical to those found in illegal growing operations, and many CBD smokables have the same smell as marijuana. Lawrenz, who also works part time at a church, wouldn’t tell anyone what she was up to for close to a year.
The well-traveled Ramage didn’t share her partner’s concerns. “I’m in great circles of educated people: doctors, lawyers, health care providers. I meet these wonderful, very respectable people that were all smoking pot,” she says.
Still, the women are currently prohibited from selling their full product line at the Oconomowoc Farmers Market, which only allows CBD topicals. Their strategy in the face of such resistance is consistent education on the differences between CBD and THC. Lawrenz is now prouder and more vocal about her efforts, particularly as working in the hemp field has united her family.
“This is wholesome. There’s nothing wrong with what we’re doing,” she says. “This has been a great project to bring all of our family working together.”
It’s CBD, not marijuana. But would she sell the latter if and when Wisconsin legalizes it? Lawrenz says she’s willing to discuss it, with her ultimate decision determined by her customers.
The Vance Global founders want marijuana legalized yesterday.
“Our logo is essentially a pot leaf with a circle around it,” Battles says.
The government’s say-so is all that’s needed for their facility to switch from hemp to marijuana cigarettes. Marhal is convinced the state Legislature won’t act on legalization, and Battles suggests they are considering moving part of their operations out of Wisconsin if legalization does not happen within the next year.
While they wait, they’ve brought in consultant Dean Matt as an informal advisor. As former CFO of the marijuana cultivation and dispensary business Verano Holdings, Matt helped sell the company to another firm for $850 million in what was then the largest deal in cannabis history, though it was later called off. He wrote a book about the experience, Gone to Pot: Welcome to the Shit Show: 7 Dirty Little Secrets of the Cannabis Industry. “It’s basically an indictment of the cannabis industry – greed intersecting with inexperience,” he says.
Following a tip to check out these guys in Milwaukee, he met Battles and Marhal last fall, and the Vance Global founders opened their books for him. They say he told them Vance Global was worth between $10 million and $15 million.
Matt says those numbers are not formal – “I don’t give valuations” – but he believes Battles and Marhal are legit. And he doesn’t need to reach to see a promising future for Vance Global. “They’ve got distribution in many convenience stores. They’ve got their costs in line,” he says. “These guys have a good chance of doing a nice job.”
The eye-popping figures bring into question how long they plan to keep on going before cashing in, especially as the early CBD boom falls back to Earth. Due to the same oversupply problems that plagued Lake Country Growers’ first year, the CBD market is tanking. Vance Global slashed its 2020 revenue goal of $15 million down to $5 million.
Battles says he spends upwards of 12 hours a day at the office. He keeps toothpaste in his desk and often crashes on a loveseat. He stresses about established tobacco giants wreaking havoc in the CBD marketplace. Marhal also sleeps over, although having a girlfriend means he occasionally needs to focus on life outside the business.
Family time, though, at least for Marhal, isn’t much of a concern. He began experimenting with CBD assembly lines while working for his father, Mark Marhal Jr., himself a CBD entrepreneur. At the time, Marhal Jr. was making a line of CBD products, which crucially did not include a CBD cigarette. When Brandon worked out a way to quickly assemble CBD cigarettes, he says he created “a company within a company” designed to allow him to do his own thing while remaining part of his father’s operations. He struck out independently only after suspecting his father of industrial espionage, which is a big reason why Marhal and Battles are so secretive about their production lines – to the point that they consider applying for a patent too great a risk.
Marhal’s older brother Jason was also employed for a time at Vance Global. A dispute led to his exit and then to Jason’s decision to also start his own company. The business rivalries have understandably strained relationships among the Marhals, and Brandon isn’t keen on discussing it with reporters. “It does more harm than good,” he says. “Had I known my family would be following what we do this closely, I wouldn’t have went into business with them.”
The elder Marhal also owns an online store, Urban Vape & CBD, which had a brick-and-mortar location on North Oakland Avenue until it was damaged in the rioting that erupted amid the protests this summer. The shop never carried Vance Global products. “The CBD shop across the street does, though,” Battles says.
The rift in the Marhal family stands in contrast to the harmony of the families behind Lake Country Growers, and the mutual understanding between its founders. “You can be business partners with anybody, but you have to be able to have a relationship with respect,” Ramage says. “There’s no one I’d ever be in business with besides [Lawrenz].”
In that respect, at least, there is some overlap at Vance Global. Marhal and Battles claim to never argue. Whether that streak holds up against market headwinds is an open question, but it’s fact that they’ve held together through the first battery of tests. And whatever their next step, it’s a good bet it will be done with a middle finger outstretched to authority.
Zach Brooke wrote about the murder of Kelly Dwyer in the January 2019 issue.