HERON LAKE — Dave Stenzel is entering his second harvest of industrial hemp on Stenzel Farms near Heron Lake, and he'd like to expand his operation to include a local processing facility, he told the Nobles Economic Opportunity Network Thursday night.

A sixth-generation farmer, Stenzel recently became interested in producing hemp for the purpose of CBD extraction. CBD is shorthand for cannabidiol, a natural compound found in hemp that is said to ease pain and calm nerves.

CBD doesn't have psychoactive properties that cause a "high" effect. Although its medicinal properties have not been confirmed, it is legal to produce and sell.

"I've never been a proponent of marijuana, nor will I ever be," Stenzel said.

CBD products are growing in popularity nationwide, and the industry stands to deliver economic growth wherever it is established. Stenzel said CBD industrial hemp can sell for up for $650 per pound, and he personally has sold premium, grow-indoor product for $1,200 per pound.

Stenzel has already begun working with branding and marketing firms to use Stenzel Farms product in CBD personal care items. The next step he plans to take is to establish a processing facility locally, rather than shipping his product to another state for processing.

With this strategy in place, he said, "we control (the CBD) all the way to the shelf."

Stenzel is negotiating with a Canadian company that would provide the necessary technology and infrastructure to handle all processing needs right here in southwest Minnesota. The company has toured more than 50 industrial hemp producers and liked the Worthington area best.

The preference is "based on the people, the land, the local work ethic, the availability of labor and the progressive nature of who we are here — so that was quite a compliment to our area," Stenzel said.

This year, Stenzel built three greenhouses and planted 270 acres of hemp — a single acre can yield more than 16 tons of dried hemp leaves. His payroll includes more than 100 people, six full-time and the rest seasonal. Stenzel Farms has its own horticulturist and its own genetics — only female plants that are cross-bred four times to produce a high amount of CBD.

Hemp is a particularly fragile plant, Stenzel explained. New technology is still in the works to help harvest the plant without damaging it or leaving behind essential parts.

Last year, Stenzel had his staff harvest the hemp by hand, which takes 15 minutes per plant. This year, he'll try out a machine that can collect three rows at a time.

Since hemp is so particular, Stenzel said he and his brother "feel like we've stepped back 100 years in farming." But, he added, "We've got some crazy-smart people working on this."

Because Stenzel and others are already growing industrial hemp in southwest Minnesota, "we're poised in this area to have processing come. It's going to happen. We'd like to be the ones to do it," Stenzel said.

Stenzel would prefer processing to happen locally not just because it would save him shipping costs and give him more control over the product, but also because of the economic benefits a processing facility would bring to the community. It would cost an estimated $16 million to construct the building, and the property would spend a significant amount in local taxes.

Additionally, Stenzel plans to hire a local workforce to staff the facility.

He explained that an ideal setup for a processing facility would look similar to the soybean processing plant north of Worthington. It would need highway access in and out, industrial scales, loading docks, storage, dryers and room to grow. All of this requires between 10 and 20 acres of space.

Stenzel has not found an ideal location yet, but would like it to be within a municipality, preferably Worthington itself.