Blue Sky Hemp Ventures excels in a niche market
By June 2021 edition of Business in Calgary, and Business in Edmonton 23 June 2021 4 min read
Blue Sky Hemp Ventures envisions a better world through the natural healing and healthful properties available from utilizing the whole hemp plant. To this end, Blue Sky offers hemp products in three value chains:food, CBD and fibre.
Andrew Potter, Co-founder, President & CEO, knows that success means taking things one step at a time.
“One thing we realized in 2017 was that trying to get into three value chains at the same time would be a recipe for disaster,” says Potter. “So, we started with foods and built our dehulling operation in Saskatoon in 2018.”
Shortly after the 2018 launch, Blue Sky Hemp Ventures received its Global Food Security Initiative (GFSI) designation, one of the highest certifications in food production. The GFSI label immediately shows consumers and business partners that the operations are structured, comprehensive, safe, and effective.
The next step came in 2019. Potter explains, “That was the year we started our focus on broad acre farmed biomass and developed our proprietary RFL (Reduced Flower & Leaf) system. This unique system allows us to take bales of hemp or loose chaff, strip out any grain, fibre and also concentrate the CBD to make for more efficient extraction. In 2020 we moved on to include the CBD extraction line of our business. We applied for, and received, our licence from Health Canada in 2020, and can now produce CBD oil, isolate, etc. Blue Sky was pleased to have our first CBD sale in December 2020.”
With the Cannabis Act of 2018 came a rush to the market of many hopefuls looking to excel in Canada’s newest industry. The competition was fierce with some companies pushing forward and others struggling to keep up. Blue Sky took the time, far in advance, to decide how the company would stand out among the competition.
Potter says, “From day one our focus was on whole plant utilization and scaling. If we could have farmers grow for us and we can contract with those farmers for a price per acre, we can take all the biomass off of it. If we can get that at a fair price, the farmer also gets a fair rate of return and that puts us in a low cost/overhead position in each value chain. That is one way in how we are different. Additionally, working with the whole plant goes beyond products. Hemp absorbs large amounts of carbon dioxide. We can sequester it and get into carbon neutral or carbon negative processing.”
Entering into a new market is not without its challenges.
“On the food side, there is a lack of familiarity on how to use hemp. Hemp hearts, oil, and powder are very nutritious products but are still very much a niche ingredient. People know to put them on yogurt or in a smoothie but not necessarily how to use hemp as an everyday item. We help to educate consumers on the virtues of the product and how to use it. With CBD, the challenge is different in that most customers know the product, but the CBD industry itself is very young and there are many players in the game. It takes
time to get your name out there.”
Blue Sky Hemp Ventures selected ATB as its financial partner.
“Part of choosing ATB was the legacy relationship with the institution among our board members,” says Potter, “but a big part of it was that traditional banks just didn’t understand what we are doing. We are in a new industry with a different business model. Our first conversation with ATB showed a great level of understanding about what we were trying to achieve, and about agriculture in general. It was a completely different level of engagement, and they were very supportive. We feel that a lot of banks say they support entrepreneurs, but not everyone backs that up the way ATB does.”
Potter has experienced advice for entrepreneurs, saying, “Don’t give up. No matter how well prepared you are, there will be curveballs. There are days you want to call it quits but stay with it. Be well capitalized going in. Most companies come to realise that sales cycles are longer than anticipated. You need to have the financial resources to follow through on the sales cycle. You don’t want to be desperate for sales, so have your resources in place. Always look at product with an eye towards differentiation. Blue Sky Hemp Ventures went in focused on reasonably well-established products; hemp is niche but familiar. When you are selling the same product as others, you are selling on price and service, so we looked at how to be different and put a twist on what has already been done. That opened a lot of doors for us.”
From the June 2021 edition of Business in Calgary, and Business in Edmonton. Shared with permission.