Colorado Mountain College

Hempric

Colorado Grown Sustainable Fabric

Anastasia Hendren

Social Entrepreneurship SUS-431

Dana Atkins

May 9th, 2016

Table of Contents

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Executive Summary(3)

Business Description & Summary.(4)

Definition of the Market(5-7)

Description of Products & Services(8-9)

Organization & Management..(9-10)

Marketing & Sales Strategy.(9)

Financial Management.(10-11)

Appendices(12)

Works Cited..(13)

Executive Summary

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 Hempric is an environmentally friendly hemp fabric manufacturer located in
Fremont County in the Rockies of Colorado. Founded in 2016, Hempric is a certified B
corporation that has direct philanthropic ties to High Country Conservation Center in
Frisco, Colorado (local, non-profit community supported agriculture center aimed at
education of food sources). All of Hemprics buildings are Gold LEED certified buildings
that are equipped with photovoltaic solar panels and a geothermal system so as to
provide energy to the grid, as well as lower our utility expenses.

Established in May of 2016 by Anastasia Hendren and Jordan Anderson,

Hempric has the goal of being a leader in the industrial shift of mass produced cotton to
sustainably produced hemp fabric. The founders have studied the present worldwide
cotton industry and have had dreams of changing this system through a for-profit
organization located stateside. Our industry buyers and their direct customers will be
our main drivers for this shift in the textile industry. Besides helping our goal, our
customers will know that the product they have purchased is 100% eco-friendly. Along
with their purchase, they will feel good knowing that a portion of their cost is going to a
local non-profit so that more people have access to local, organic food.

The location of Hempric is a huge factor in the success of our company, as well
as spreading the word of hemp as a raw source for many different products. Hemp has
been legal in Colorado since 2013 and recreational marijuana use has been legal since
2012, yet both are still considered illegal at the federal level. By state law, it is legal for
Hempric to produce products made from hemp fiber seeing as how there is no trace of
THC in hemp plants. With the success of Hempric, others will see how beneficial this
plant is, and be empowered to make other innovations through the use of hemp.

The total economic gain for Colorado through Hempric is favorable due to
customers gaining knowledge of environmental crises through industrial production,
customers wanting stateside products, and marijuana centered tourism. Hempric
anticipates great response, and customer devotion as the company grows and hemp
becomes more mainstream.

Fremont County has an average of 260 sunny days a year that will help our
farms of hemp and wildflowers thrive. Through these plants thriving, so will our social
mission, the people helped through HC3, and our gorgeous land.

Business Description & Vision

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 Hempric is an environmentally friendly hemp fabric producer that prides
themselves on sustainable farming and being socially responsible. Our social ties are
directed towards High Country Conservation Center located in Summit County. By
connecting Hempric to this non-profit, it is closing the loop for the business to be a
social and environmental conscious organization.

HC3 is Summit Countys local community supported agriculture (CSA) center

where people can get organic, locally grown food. Hemprics part in donating to HC3 is
to support the growth of the CSA ideology in Summit County, as well as start up a
program at surrounding elementary schools so that students may learn how to grow
their own food.

The mission statement of Hempric is as follows: The goal of Hempric is to

provide a safe, sustainable, eco-friendly fabric to the market that provides a closed loop
in the manufacturing industry. Through the production of our hemp fabric, we will be
contributing to the need of others through supporting a local community supported
agriculture center. We provide a great product with deep social ties each and every
day. Hemprics mission statement embodies that their product will be all that is
promised, and all that is expected of us from our customers.

Through our work with HC3 we will be able to provide them with monetary and
social support so that they may reach more citizens of Summit County. Through our
help if their expansion, we will add in programs at local schools so that we may reach
our next generation on how important it is to know where their food comes from.
Through this type of paradigm change, people will learn to rely less on processed foods
and fall in love with freshly grown food again. By having people expect a higher quality
of food that is locally sourced we will make a positive impact on our environment. By
eating local, there is less environmental harm from the industrial food system as well as
the transportation of our food.

The vision of Hempric as a whole is to spread the word of a green alternative to

industrial cotton that is produced stateside providing local jobs. As well as helping the
local and state economy, Hempric will be giving back to the community of Summit
county through growth and education of local food. To make long lasting change, one
has to start at the base of an issue which is education and knowledge.

Definition of the Market

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 Hempric has an advantage in the textile industry for its location in Colorado, a
state that has legalized hemp, and will be a leading business in the American based
hemp industry. There is currently one other hemp textile leader, EnviroTextiles LLC in
Glenwood Springs, Colorado, and Hempric would be lobbying to partner with them in
order to shift the paradigm of materials used for textiles. If we could work side by side
with EnviroTextlies LLC, then we would reach the mountain towns of the state while they
have the western part of Colorado.

With this future partnership, Hempric would have a leading advantage in Summit
County and the rest of the mountain areas in Colorado. We would be providing
sustainable, locally grown fabric to local artisans and merchants in an effort to close the
loop on our clothing industry.

Comparisons of Hemp & Cotton:

Hemp
* Water Usage: 700 gallons per pound of fiber produced
* Pesticides: N/A Hemp over power the surrounding weeds, therefore no need for
pesticides
* Cost: Fiber- $75 per ton (2.5 acres of crop per ton) & Seed- $237 per ton
* Comfort & Longevity: Fibers are strong, durable, and soft. Will lead to less
manufacturing in the future due to long lifespan.
* Breathability & Wicking: Hemp has anti-bacterial properties that leads to fabrics not
getting mildew or odors.
* Aesthetics: Hemp fibers can naturally be white, black, green, brown, or grey offering a
natural variety of colors. Hemp can also be dyed (Martino).

Cotton
* Water Usage: 1,400 gallons per pound of fiber produced
* Pesticides: Uses 25% of our worlds pesticides
* Cost: Seed- $236 per ton
* Comfort & Longevity: Cotton is incredibly soft, yet the fibers are weak and tend to
break down much faster than hemp.
* Breathability & Wicking: Natural wicking fiber, yet holds moisture for quite some time.
* Aesthetics: Easily dyed,yet knowledge about harmful effects on environment and
human safety is calling for an alternative fiber source (Martino).

Competitive Advantage Breakdown:

The price per ton of seeds is a one $USD more than the price of cotton seeds
per ton. This gives hemp a comparable advantage to cotton. Yet, the biological value of

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hemp versus cotton is what gives hemp the competitive advantage in the fiber industry.
This advantage comes from the resources needed to grow each crop. Hemp plants only
require half of the water that is needed to cotton plants. That saves hemp farmers a lot
of money, while also protecting our water supplies. Hemp plants also have no need for
pesticides as they are considered a weed and will push out other weeds. This is another
advantage seeing as how cotton uses 25% of the worlds pesticide use. Pesticides in
cotton can harm humans by coming in contact with skin through clothing, as well as
contaminating our fresh water supplies. Pesticide usage is also one of the biggest
threats against nature. Here in America our pesticide usage has created a dead zone
in the Gulf of Mexico through the industrial farming runoff via the Mississippi River. This
dead zone makes all marine and plant life impossible (Industrial).

Legal Requirements & Hempric:

Hempric will register and do all necessary requirements to achieve Colorado

industrial hemp certifications. This will include but not limited to the CSGA CO hemp
certification fees per year, commercial industrial hemp certification, and CDA & CSGA
variety certification. These will show that our company is up to date with all of our
certifications, as well as up to date with the local, state, and federal laws.

This company will abide by the regulations stated under the Title 35: Agriculture,
Article 61: Industrial Hemp Regulatory Program, C.R.S. 35-61-109 as well as the
regulations under the Hemp Act of 2015 which is the most current piece of legislation as
of today. If there are any concerns of this matter, contact Duane Sinning the Assistant
Director of the Colorado Department of Agriculture (Industrial).

The employees of Hempric will be covered of all work related injuries and option
for personal insurance through Liberty Mutual Insurance.

The title of Hempric is a trademarked title, and shall not be used for any other
organization that is not affiliated with Hempric. This may only be allowed through proper
approval of the owner of Hempric.

Expected Growth of Hempric & the Hemp Industry:

Textile industries worldwide are becoming aware of their impact on the

environment, as well as customers becoming educated on how these industries
operate. Through this knowledge and education, industries are going to have to make a
shift in their product to please the new customer demands. As for the cotton industry,

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many are demanding sustainable, organic cotton, or a whole new material for the
industry to use. Industrial cotton farming is taking a detrimental toll on our environment
as well as the farmers who produce this cotton. In the next 10 years, organic cotton and
hemp fibers will be the norm for the clothing industries worldwide (Projected).

Hempric will be a leader in this movement along with EnviroTextiles. Their

location in Colorado sets them far above any other competitors due to the legalization of
hemp. Within the upcoming decade, hemp is projected to skyrocket in sales and
popularity, yet not just in the textile industry. Hemp is a universal, sustainable material to
make just about anything that we need, from clothes, to food, to paper, and even
biodegradable plastics. The possibilities of this industry are endless, and we will see this
shift sooner than later.

Hemprics Triple Bottom Line:

Hempric not only has a mission to provide a sustainable fabric for our clothing
industry, but also has deep roots in helping the local community. Through the generation
of our profits, Hempric looks to support High Country Conservation Center through a
quarterly donation of 10%. High Country Conservation is located in Frisco, CO and is
the local CSA in Summit County, local seed bank, and local recycling operator. Hempric
would like its donation to help add more plots for CSAs so that more local people can
grow their own food. Along with this, Hempric would like to help HC3 start a program in
the surrounding elementary schools to teach kids the value of growing their own food,
and to give those families in need a supply of organic, local food.

Through Hemprics farming of hemp we are helping the planet through no use of
pesticides and significantly less water usage. With the help of HC3 through the 10% of
our profits donated, we will be helping the local people of Summit County with access to
locally grown food.

Description of Products & Services

Hempric is a manufacturing company with means of creating sustainable hemp

fabric to sell to clothing manufacturing industries. By working with local farmers here in
Colorado we are setting the pace for locally made products and jobs. Our hemp will go
under scrutinous inspections so as to make sure our product is top of the line. These
inspections will also provide accurate information so as to gain and keep certifications.

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Hempric will strive and achieve certifications such as: Sustainable Biodegradable
Products, USDA Certified Bio-Based Products, and Green America: Certified Business.

Our manufacturing sites will be LEED certified buildings with use of alternative
energy (making our utility costs decrease with each coming year), constructed out of
Beetle-kill Pine, geothermal heating and cooling systems, and our machines will be
bought and refurbished from another company. By buying used equipment we keep our
eco-footprint low by not needing new equipment manufactured. This will also provide
another source of jobs in our company seeing as how we will need consistent and
thorough maintenance on this equipment to keep it running at 100%.

Rates of Fabric for Wholesale:

Un-dyed hemp fabric per yard $8.00

Organic dyed hemp fabric per yard $12.00

Fabric that we dye will be dyed through a process of organically grown

wildflowers and plants that are native to Colorado. These plants are naturally drought
resistant, while also being a natural way to dye fabrics instead of using synthetic dyes
that are harmful for our planet. We will also employ farmers to grow and harvest these
wildflowers and plants for our dyeing needs. They will have sufficient land to farm on, as
well as greenhouses for continued production in winter months. These farms will be
conveniently located near our hemp farms as well as our manufacturing site so as to
reduce our carbon footprint for transportation of our goods from farm to product.

Plants to be Farmed and Harvested:

Arnica or Arnica cordifolia - Yellow dye

Blue mist penstemon or Penstemon virens - Blue/Violet dye

Bush morning glory or Ipomea leptophylla - Magenta/Pink/Red dye

Butterfly Milkweed or Asclepias tuberosa - Orange dye

Rocky Mountain penstemon or Penstemon strictus - Navy dye

Scarlet gilia or Ipomopsis aggregata - Red dye

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 These wildflowers and plants will suffice all of our color needs. We do not need
dyes for grey, brown, black, or green seeing as how different varieties of hemp will
naturally produce these colors. Also, by using these plants as means of dyes, we will
not be putting any harmful toxins into the water we use in the dyeing process. Hempric
will also reuse and recycle the water that we use to dye our fabric. For instance, when
we dye fabric yellow with our Arnica flowers, we will keep the water we use to keep
dying future supplies of fabric yellow (Suggested).

Organization & Management

Hempric will operate as a privately held B corporation and will be owned and
managed by Anastasia Hendren and Jordan Anderson, each partner will have 50%
ownership in the business.

Both owners of Hempric will act as on-site managers until our business grows to
need the addition of further management. Anastasia Hendren will operate and manage
the growing and harvesting of our hemp farm and wildflower farms. She will be the sole
person to order supplies and manage the personnel in that area of the company. Her
employees will include 3 farmers (2 hemp farmers and 1 wildflower farmer) and 2
positions for harvesting and watering. Jordan Anderson will manage Hemprics
manufacturing site and its employees. He will be the manager to 1 office receptionist, 2
maintenance and grounds persons, 1 janitor, and 10 factory workers that will make the
fabric from the fiber as well as dye it.

We will also contract out a daycare provider so that our employees can work the
hours they need to survive, while also having on-site day care services. This will be free
of cost to any of our full-time employees.

Accounting services will be contracted to Net CPAs at 212 Fairview Blvd.

Breckenridge, CO 80424, and legal services will be contracted to the Brewer Law
Offices at 106 N. French St. #230 Breckenridge, CO 80424.

Marketing & Sales Strategy

Hempric is employ an industry centric marketing strategy to attract new company

customers to our product. Aiming focus on our sustainable hemp fabric will be our main
marketing point to gain new customers. Many companies are feeling the pressure of
using an alternative to industrial cotton, and our proper marketing of hemp fabric will
gain us many new and lasting customers. Our second marketing strategy will focus on

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our work with High Country Conservation Center and our impact on social being through
access to locally grown organic food. Lastly, we will advertise that our buildings and
manufacturing processes are as green as possible. We will be transparent about our
inputs and outputs of production which has proved to be a powerful marketing tool.

The marketing process of Hempric will be communicated through multiple

streams of advertisement. We will market through social media, periodical
advertisements, textile markets/conventions, sustainable products conventions, and our
name on items that were made from our fabric. Through these means of advertisement,
Hempric will guide customers to our online site to learn more about our product, share
our page, and find means of contacting us.

Our advertising will be completed by Jordan Anderson who has a degree in

digital media with an emphasis in marketing strategies.

Financial Management

The financial management of Hempric will be conducted by the companies

CEOs, Anastasia Hendren and Jordan Anderson. Both Miss. Hendren and Mr.
Anderson are authorized to execute banking and tax compliance operations in
accordance to local, state, and federal regulations and laws for tax identification
numbers for Hempric.

Anastasia Hendren and Jordan Anderson have equally contributed to the start-up
of Hempric, making each equal partners in the social venture, growth, and profits after
yearly taxes and donations to High Country Conservation Center.

These contributions are as follows. Jordan Anderson is acting as a

shareholder/investor in Hempric, and has loaned $3 million with a maturation of 15
years and 5% interest. Anastasia Hendren has received a business loan of $3 million
with a maturation period of 10 years at 5% interest with a 20% down payment of
$600,000. Hemprics final shareholder/investor is the Knapp family of Knapp Farms and
owners of Bon Appetit and American Architechture publications. The Knapp family has
loaned $3 million to Hempric with a maturation period of 10 years at a 5% interest rate.

The necessary start-up capital of $9,000,000 will fund the following needs:

Purchase of 100 farmable acres in Fremont County = $300,000

Construction of 15,000 sq. ft. manufacturing site at $250 a sq. ft. =
$3,750,000

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 Construction of 2 10,000 sq. ft. hoop-house greenhouses at $150 a sq. ft.
= $3,000,000
Purchasing of used fabric machinery equipment = $1,000,000
Purchasing of soil, nutrients, seeds and additional harvesting equipment =
$500,000
Building permits, licences, insurance, utilities, marketing expenses, and
additional start-up expenses = $450,000

The following pro-forma income statement is Hemprics past, current, and future
projections of income.

Appendices

Pro-Forma Income Statement for Hempric

Revenue 2015 2016 2017 2018

Gross Sales $2,565,000 $3,400,000 $3,725,000 $3,925,000
10% to HC3 285,000 340,000 372,500 392,500
Net Sales $2,565,000 $3,060,000 $3,352,500 $3,532,500

Operating Expenses
Loan Payments $252,000 $252,000 $252,000 $252,000
Shareholder Payments 450,000 450,000 450,000
450,000
Salaries & Wages 550,000 600,000 640,000
660,000

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Advertising 40,000 50,000 55,000 60,000
Depreciation Costs ---- ---- ---- ----
Other ---- ---- ---- ----
Total Operating Costs $1,292,000 $1,352,000 $1,397,000 $1,422,000

Administrative Expenses
Company Insurance $85,000 $93,000 $100,000
$115,000
Employee Insurance & Benefits 48,000 50,000 55,000 58,000
Office Supplies 5,000 5,500 6,000 6,000
Maintenance Costs 65,000 73,000 80,000 83,000
Utilities 45,000 40,000 39,000 39,000
Farming Supplies 90,000 95,000 100,000 100,500
Total Admin. Expenses $338,000 $365,500 $380,000 $401,500

Overall Expenses $1,630,000 $1,708,000 $1,777,000 $1,823,500

Net Income Before Taxes $935,000 $1,315,500 $1,575,500 $1,709,000

Taxes on Income - 13% (121,550) (175,695) (204,815) (222,170)

Net Income $813,450 $1,175,805 $1,370,685 $1,486,830

Works Cited

"Industrial Hemp." Home. Colorado Department of Agriculture, 2016. Web. 02 May

2016.

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Martino, Joe. "Hemp vs Cotton: The Ultimate Showdown." Collective Evolution. N.p., 17

June 2013. Web. 2 May 2016.

Morris, David. "Why Has the Hemp Revolution Bypassed the United States?" Journal of

Industrial Hemp 7.2 (2002): 61-65. USDA. 2002. Web. 2 May 2016.

"Projected Mass Growth Curve on the Rise for Industrial Hemp and Medical Marijuana

Stocks - Hemp Inc." Hemp Inc. N.p., 12 Oct. 2012. Web. 02 May 2016.

"Suggested Native Plants." Suggested Native Plants for Gardening and Landscape Use

on the Front Range of Colorado (2008): 1-10.Colorado Native Plants Society. Apr.

2008. Web. 2 May 2016.

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