The State of Kentucky is well known for its smooth, oaky, one-of-a-kind bourbon. But what is less known about the Bluegrass State is its rich history of hemp cultivation that predates the founding of the country. Kentucky even led the nation in hemp production throughout the 19th century, directly contributing to the creation of essential rope, twine, canvas, sailcloth, clothing, and textiles. Of course, when the national prohibition of hemp went into effect in the beginning of the 20th century, the industry disappeared.
When Congress passed the 2018 Farm Bill, it ended nearly a century of hemp prohibition, signaling a renaissance of the American hemp industry. The next year, Kentucky-bred Jim Higdon and his cousin Eric Zipperle started Cornbread Hemp, manufacturing and selling hemp-related products direct to consumers across the country.
For Jim, getting into the hemp industry felt natural. While he never knew for sure if or when hemp production would be legal again, he was well-versed in its history. As a long-time journalist, with a degree from the Columbia University Graduate School of Journalism, he had followed hemp-related policies for decades. He even wrote a book involving Kentucky and hemp called The Cornbread Mafia, which later inspired the name for his company.
The term is a nod to the book, but Jim also believes “cornbread” embodies the rural, down-home Kentucky identity that plays a big role in the hemp his company grows. Jim describes himself as being “somewhere between an historian and an entrepreneur—taking the past and bringing it into the future,” which feels all too relevant to his work in the hemp industry. “I pulled a story out of the mud and then Eric and I turned that story into a brand,” he says.
With Jim’s hemp knowledge and Eric’s business know-how, the two formed a perfect partnership and built Cornbread Hemp into a thriving business.
The business of hemp
Within three years of the Farm Bill’s passing, the hemp boom in America was well underway, with licenses jumping from 3,546 in 2018 to a whopping 21,496 in 2020. The initial industry boom has since settled, and hemp licenses still stand at around 10,000—a respectable number. Yet, with so many competing brands in the U.S. hemp industry, Cornbread has managed to hold its own.
When asked what sets Cornbread Hemp apart from the rest, Jim immediately spoke to the quality of his organic hemp.
“We’re farming land that has not had pesticides on it for three years—verified. We’re using non-GMO seeds, no pesticides, and no synthetic fertilizers. The only fertilizer input we use is chicken litter, and we use that chicken litter from a certified organic chicken farm,” he says proudly.
It’s clear when speaking with Jim that he has a deep passion for his work and a dedication to producing the highest-quality hemp on the market. This combination has helped the company succeed in the market, while also maintaining their family ownership, which has become a rarity as the hemp industry has grown.
Jim explained:
My cousin and I together own the majority of the company still. We have some investors, but we are in the driver’s seat and we’re just very local focused and loyal to home. We’ve got a hundred employees now and we’re paying line workers an average at 26 bucks an hour. We’re doing lots of give back in the community.
Cornbread’s entire operation is in-house. They grow their own hemp on 50 acres, harvest and store the materials and their own products, and ship to consumers around the country.
While they do distribute to brick-and-mortar stores, especially their beverage products, about 85% of their business comes from online direct-to-consumer sales. To ensure that every online sale is done legally, Cornbread has taken great care, using advanced BlueCheck software to verify the age and identity of every customer.
Hemp products might be largely associated with younger adults, but 60% of Cornbread’s clientele are over 66 years old. For these older folks, Cornbread’s hemp products bring much-needed relief from ailments that greatly diminish their quality of life. In fact, the company routinely gets emails and online testimonials from older customers who have had their burdens lessened thanks to Cornbread.
Jim takes pride in being able to help. “Our products are designed to help people with pain, anxiety, and sleep issues, which affect all of us, especially as we age. And it rings loud and true in the customer data,” he says.
While the rebirth of the hemp industry has allowed Cornbread to bring relief to countless, suffering older people, the ghost of prohibition past has come back to haunt the industry, greatly impacting the way Cornbread and others can do business—specifically with Tennessee customers.
A direct ban on direct-to-consumer sales
After alcohol prohibition was repealed in 1933, Tennessee, along with most other states, implemented a strict three-tier system for law enforcement to ensure that the liquor being sold in stores was licensed and legitimate. But Tennessee’s new law extends this system to the hemp industry, putting it under the jurisdiction of the state’s Alcoholic Beverage Commission.
When the law goes into effect in January, any out-of-state hemp company looking to do business in Tennessee must first sell their product to a Tennessee-licensed wholesaler, which then must sell the product to a Tennessee brick-and-mortar retail shop. Only then can customers visit the physical store and make a purchase. Put simply, the law is an outright ban on direct-to-consumer sales in Tennessee.
Cornbread could technically set up their own wholesaler and retail facilities in Tennessee, but this would be both impractical and prohibitively expensive.
The law places an unnecessary burden on Cornbread’s 11,000 Tennessee-based customers by making it harder for them to access the product that has relieved their pain and improved their quality of life. In Tennessee’s many rural areas, finding a licensed store to buy hemp products can be difficult. And even if a customer is able to find a location, they will still have to physically pick it up, which is easier said than done for elderly people with chronic pain or anxiety.
Having this law prevent him from giving his customers the products that help them is gut-wrenching for Jim. “We are positively impacting people all the time, and so the idea of having to abandon them just gives us as much anxiety as anything,” he says.
The law will also create financial burdens for Cornbread. Last year, Tennessee sales accounted for about one million dollars of Cornbread’s sales. Tennessee’s law will surely decrease these sales by making it harder to get the product to the customers. Worse still, the company will also be forced to pay the regulatory costs of the three-tier system, like the wholesaler fees.
And on top of everything else, the law is also blatantly unconstitutional.
Why Tennessee’s hemp law is unconstitutional
In the liquor industry, the three-tier distribution system is allowed because the Twenty-First Amendment specifically gave the states the authority to regulate alcohol. But hemp is not alcohol, and it doesn’t fall under the scope of the Twenty-First Amendment. Like other consumer goods, hemp should fall under the Constitution’s Commerce Clause, which prohibits states from adding excessive burdens to interstate trade.
The Tennessee law discriminates against out-of-state businesses by making interstate commerce harder and more expensive. As Jim puts it, “It’s an antiquated system that locks in a monopoly for the distribution, and that distribution is lucrative work.”
The government should not be in the business of picking winners and losers, and Jim and Eric are partnering with Pacific Legal Foundation to hold the Tennessee Alcoholic Beverage Commission accountable.
Taking on the government is no easy feat, but not one with which Jim is unfamiliar. “It’s just another Thursday for me,” he says. Jim has found himself in legal squabbles with the government before, including the time he was the first journalist to be subpoenaed under the Obama administration.
Jim and Eric’s fight is so much bigger than Tennessee alone. Already, other states have looked at implementing similar policies. If Tennessee gets away with enforcing its unconstitutional laws, it sends a dangerous message to other states.
Jim and Eric aren’t just standing up for the hemp industry—they are standing up for their customers. As Jim puts it, they are filing this lawsuit to “stay connected to 11,000 Tennessee customers who need this. This is fundamentally about making sure that our consumers, our customers in Tennessee remain taken care of and not abandoning them because of some protectionist scheme that someone cooked up.”
He continued:
Fundamentally, this case is about a consumer-first understanding. We are putting ourselves in harm’s way and exposing ourselves to all the legal shenanigans that come with it, for the sake of our customers.
