industrial hemp early usesindustrial hemp early uses • industrial hemp was widely cultivated in...

Industrial Hemp Early Uses

• Industrial hemp was widely cultivated in Europe in the mid-16th Century for food (porridge) and for fiber.

• The original use of industrial hemp in North America is attributed to Puritans in New England who applied the fiber to the production of cloth and household fabric.

• Strong demand for cordage and sailcloth in North America during the mid-19th century peaked U.S. production

• World War II prompted the USDA to finance production for seed and fiber.

• In 1943, production increased to 12,450 tons of processed fiber off about 30,000 acres, then dropped to 4,950 tons off about 11,000 acres in 1944.

Industrial Hemp Heydays

• Following WWII, industrial hemp production ceased in the U.S.

• Regulation was transferred to the Drug Enforcement Agency and cultivation of industrial hemp remains illegal in the U.S. today.

• The American Farm Bureau changed its position to supporting research and domestic cultivation of industrial hemp in 1999.

Industrial Hemp Regulation

Industrial Hemp • Industrial hemp and marijuana differ vastly on

the content of THC (psychoactive chemical) Marijuana cultivars typically contain 3-15% THC Industrial hemp contains less than 0.3% THC

Industrial Hemp Advantages

• Very cost effective and environmentally friendly • Pest resistant, requiring little or no pesticides • Natural herbicide smothers weeds when grown at

a high density • Absorbs carbon dioxide 5 times more efficiently

than the same acreage of forest

• China produces about 40% of the world’s fiber supply; and about 80% of the world’s seed supply.

• China plans to increase the current 50,000 acres of production to 1+ million acres.

• This would reduce their textile industry’s dependence on cotton, freeing large areas of cotton-growing land for food production needed to support China’s population.

Industrial Hemp: China

• Currently, 32 countries, including Canada, Great Britain, France and China, allow farmers to grow industrial hemp.

• The primary markets for European produced industrial hemp are: – Specialty pulp bank notes and similar applications

requiring its high tear and wet strengths – Developing composite materials for automotive – Developing construction and thermal insulation – Clothing, body care products and foods

Industrial Hemp Markets

Industrial Hemp Auto Uses

• Numerous auto manufacturers are using industrial hemp in the production of vehicles due to its light weight, strength and recycling capabilities.

• In the U.S., industrial hemp can be utilized to revitalize areas that have lost jobs in tobacco, textiles and furniture manufacturing.

• The North American hemp market is currently estimated to be over $360 million in annual sales with annual sales growing 10% per year.

Industrial Hemp: United States

Industrial Hemp Regulation

• In order for industrial hemp to be grown and produced in the U.S. would require: Congress and President passing a law transferring

industrial hemp regulation from the U.S. Drug Enforcement Administration to the U.S. Department of Agriculture.

Industrial Hemp Resolution

• The following have adopted support resolutions: – Montgomery County Board of Supervisors – New River Valley Economic Development Alliance – New River Valley Planning District Commission – Montgomery County Chamber – Montgomery Regional Economic Development Commission – Town of Blacksburg , VA – City of Charlottesville, VA – Giles County Board of Supervisors – Floyd County Board of Supervisors

Industrial Hemp Resolution

• The following have adopted support resolutions: – VACO Agricultural and Environmental Steering Committee – Approved in VACO Legislative Agenda Recommendation to

Virginia House and Senate – Mathews County Board of Supervisors – Buckingham County Board of Supervisors

Resolutions & Bills

• US House – H.R. 1831 (2012) • Senate - S 3501 (2012) • VA Resolution - HSR94 – (1999) - HSR605– (2001)

Industrial Hemp Support

• The following agencies have shown support by placing in their Policy Manual

• VA Farm Bureau • National Farmers Union

Requested Action • Adopt Resolution to provide opportunities for

farmers, businesses and entrepreneurs to invest in industrial hemp: – Urge the 112th Congress to adopt the Industrial Hemp

Farming Act – Grant States authority to license and regulate the

hemp production as an industrial and agricultural commodity

QUESTIONS?

0H&et county, V/

\

Industrial hemp - Facts

> Industrial hemp was widely cultivated in Europe in the mid-16th Century for food

(porridge), and for fiber. The original use of industrial hemp in North America is

attributed to Puritans in New England who applied the fiber to the production of cloth

and household fabric. Strong demand for cordage and sailcloth in North America

during the mid-19th century peaked U.S. industrial hemp production at about 7,000

tons

> World War II prompted a USDA Commodity Credit Corporation emergency program

(1943 and1944) to finance the production of industrial hemp for seed and fiber.

Under this program, Production increased to 12,450 tons of processed fiber off

about 30,000 acres in 1943 and then declined to 4,950 tons off about 11,000 acres

in 1944.

> Following the war, brought an end to the industrial hemp production in the U.S.

Regulation of Cannabis was transferred to the Drug Enforcement Agency and the

cultivation of industrial hemp remains illegal in the U.S. today. However, the

American Farm Bureau changed its position to supporting research and domestic

cultivation of industrial hemp in 1999.

> The distinction between industrial hemp and marijuana is typically made on the

content of THC (tetrahydrocannabinol), which was first isolated in 1964:

> A level of about 1% THC is considered the threshold for a psychoactive effect

in humans

> Industrial hemp is associated with those cultivars containing less than 0.3%

THC

> Marijuana cultivars typically contain 3-15% THC

> Industrial hemp is a very cost effective and environmentally friendly agricultural

crop. Industrial hemp requires little or no pesticides as it is naturally pest resistant.

Industrial hemp is also a natural herbicide to smother weeds when grown at a

density suitable for producing high-quality bast fiber. Its deep root system is also

very beneficial in preventing erosion, cleaning the ground, providing a disease

break, and helping the soil structure by aerating the soil for future crops when it is

grown in rotation with other crops. Finally, it absorbs carbon dioxide five (5) times

more efficiently than the same acreage of forest

> The industrial hemp market is typically divided into fiber production and seed

production. China produces about 40% of the world's fiber supply; and about 80%

of the world's seed supply. China's objective is to increase China's current 50,000

acres of industrial hemp production to 1+ million acres. This would reduce their

textile industry's dependence on cotton; and in the process, free large areas of

cotton-growing land for food production needed to support China's population.

> Currently, thirty-two countries, including Canada, Great Britain, France and China,

allow farmers to grow industrial hemp. The primary markets for European producedindustrial hemp are:

a Specialty pulp for cigarette paper, bank notes and similar applications that

require its high tear strength and high wet strength

B Developing composite materials market for automotive applications

a Developing construction and thermal insulation applications

B Clothing, body care products, and foods.

> Canada can provide a benchmark for what a U S regulatory system would require.

The Industrial hemp Regulations (IHR) were developed in 1998 as part of Canada's

Controlled Drugs and Substances Act (CDSA) to allow for strict regulation of

industrial hemp production and make a clear distinction between industrial hemp

and other forms of Cannabis. Every person legally cultivating industrial hemp must

submit samples of their crop to a licensed and accredited laboratory to ensure that

the THC level is at or below 0.3%

> Numerous automotive manufacturers are using industrial hemp in the production of

vehicles to industrial hemp's lightweight, strength, and recycling capabilities.

Attached is a chart of auto manufactures utilizing industrial hemp.

> In the United States, industrial hemp can be utilized to revitalize areas of the

country, which have lost jobs due to Tobacco, Textiles, and Furniture Manufacturing.

The North American Hemp market is current estimated to be over $360 Million in

annual sales with annual sales growing 10% per year.

> In order for Industrial Hemp to be grown and subsequently produced in the United

States, Congress and President would have to pass a law transferring industrial

hemp regulation from the. U.S. Drug Enforcement Administration to the U.S.

Department of Agriculture.

124 JOURNAL OF INDUSTRIAL HEMP

TABLE 3. Use of natural fibres for serial parts in the automotive industry

(1997-2001)

Manufacturers/Customers

Audi

BMW

Citroen

DaimlerChrysler

Fiat

Ford

MAN

Mitsubishi

Nissan

Opel

Peugeot

Renault

Rover

Saab

SEAT

Toyota

Volkswagen

Volvo

Model / Application (dependent on model)

TT, A2, A3, A4, A4 Avant (1997), A4 Variant (1997), A6, A8(1997), Roadster, Coupe

Seat back, side and back door

panels, parcel tray, boot lining, rear flap lining, rear storagepanel, spare tire lining

3, 5 and 7 Series and others

Door inserts/door panels, headliner panel, boot lining, seatback

C4(2001)

Door inserts

A-Klasse, C-Klasse, E-Klasse, S-KlasseDoor inserts,

windshield/dashboard, business table, column cover

Punto, Brava, Marea, Alfa Romeo 146,156, Sportwagon

Mondeo CD 162 (1997), Cougar (1998), Mondeo (2000), Focus

Door inserts, B-column cover, parcel tray, in the future alsomotor protection (cover undershield)

Bus (1997)

Headliner panel

Miscellaneous models (since 1997)

Miscellaneous models

Astra, Vectra, Zafira

Headliner panel, door inserts, column cover, instrumentpanel, rear shelf panel

New model 406

Clio, Twingo

Rover 2000 and others

insulation, rear storage panel

Coupe (1998)

Door inserts

Door inserts, seat backs

Miscellaneous models

Golf A4, Golf 4 Variant (1998), Passat Variant, BoraDoor inserts, seat backs , rear flap lining, parcel tray

C70.V70, Coupe (1998)Door inserts, parcel tray

(2,3,4,6,7)

Need to Reassess the U S Market

Onnortunitv for Industrial HemD

^8

Prepared by:

Virginia Tech Business Technology Center

for Montgomery County, VA.

May 2011

Industrial Hemp Market Opportunity in the United States

NEED TO REASSESS THE U S MARKET OPPORTUNITY

FOR INDUSTRIAL HEMP

In 20005 the USDA reviewed the potential market opportunity for industrial hemp in the United

States. With the re-introduction of industrial hemp production in Canada in 1998 and the

development of new markets for industrial hemp globally, a new review of the opportunity forindustrial hemp production in the U S is needed. This new study should assess both the success

of and the lessons learned from the maturing Canadian industry; and the associated regulatory

system to monitor production. It should also assess the opportunities associated with the

developing world market for industrial hemp. Such a study will, therefore, need to includeagencies beyond the USDA.

This paper summarizes the advantages and concerns associated with industrial hemp productionin the U S as well as changes within the hemp industry over the past decade that support the needfor a reassessment of the opportunity associated with U S hemp production.

CURRENT STATUS OF HEMP IN THE U S

Industrial hemp has been grown for millennia throughout the world. In the Western Hemisphere,

it is well suited for cultivation in all regions of the U S, as well as southern Canada, Latin

America, and significant regions of South America. It will also grow in Australia; most regions

of Europe; the mid- and southern regions of Asia; and large regions of northern, southern and

eastern Africa. The primary issue with cultivating industrial hemp in the U S is that it is

considered by the U S Drug Enforcement Administration (DEA) to be indistinguishable in

appearance from marijuana. This is not a universal conclusion; and over 30 industrial countries

do distinguish between industrial hemp and marijuana, and allow the production of industrial

hemp. Since the early 1990s, both the European Union and Canada have reestablished industrialhemp production.

The distinction between hemp and marijuana is typically made on the content of THC(tetrahydrocannabinol), which was first isolated in 1964:

© A level of about 1% THC is considered the threshold for a psychoactive effect inhumans

® Industrial hemp is associated with those cultivars containing less than 0.3% THC

© Marijuana cultivars typically contain 3-15% THC

In addition, growing industrial hemp and marijuana in the same field will detrimentally affect the

yield of both crops. Nevertheless, current DEA policy considers industrial hemp and marijuana

to be indistinguishable. Furthermore, the DEA is adamantly opposed to industrial hempcultivation in the U S. The USDA has been mostly silent on this issue, while the American Farm

Bureau changed its position to supporting research and domestic cultivation of industrial hemp in1999.

Page 2 of 11


U S MARKET OPPORTUNITY FOR HEMP

Hemp is a very cost effective and environmentally friendly agricultural crop. Hemp requires

little or no pesticides as it is naturally pest resistant. Hemp is also a natural herbicide, known for

its ability to smother weeds when grown at a density suitable for producing high-quality bastfiber. Its deep root system is also very beneficial in preventing erosion, cleaning the ground,providing a disease break, and helping the soil structure by aerating the soil for future crops

when it is grown in rotation with other crops. Finally, it absorbs carbon dioxide five (5) timesmore efficiently than the same acreage of forest.

Hemp is also a biodiversity friendly crop when compared to corn and soybeans, as shown in thefigure below.

BIODIVERSITY FRIENDLINESS OF

SELECTED CROPS

-15

Source: S. D. Montford (1996) andE. Small (1997)

Industrial hemp production has experienced a global "renaissance" in the past 1-2 decades. This

has been largely due to increased demand for biodegradable products; and the rapidly increasingglobal demand for annual renewable fiber and high quality health food products.

Page 3 of 11


The industrial hemp market is typically divided into fiber production and seed production. Chinaproduces about 40% of the world's fiber supply; and about 80% of the world's seed supply.China recently announced plans to increase its hemp production in order to provide a major newsource of fiber for the textile industry. This would reduce their textile industry's dependence on

cotton; and in the process, free large areas of cotton-growing land for food production needed to

support China's population. The objective is to increase China's current 50,000 acres of hemp

production to 1+ million acres. However, for this effort to succeed, new technology is needed toremove the lignin that binds hemp fibers and prevents them from being spun.

The primary markets for European produced hemp are:

0 Specialty pulp for cigarette paper, bank notes and similar applications that require itshigh tear strength and high wet strength

0 Developing composite materials market for automotive applications

B Developing construction and thermal insulation applications

Hemp paper costs approximately six times that of wood pulp paper because of the limited supply

of hemp; outdated, high-cost processing equipment; and the additional processing steps required

to separate hemp pulp from hurds. The fact that hemp is only harvested once a year also adds to

its costs as a raw material for paper. Therefore, specialty pulp is only used in applications that

require its high tear and wet strength properties. Whether such markets could be developed inNorth America is questionable.

Hemp was introduced in automotive composites in Europe in 1996. It provides material that is

easy to handle, has low environmental life cycle impact, and offers superior moisture diffusion

and superior sound proofing when compared to fiberglass composites. Even though its cost is

higher than fiberglass, about 19,000 tons of hemp were used within the German automotive

industry in 2005, mainly as press-molded, injection-molded and press flow-molded parts.

Virtually all European car makers and their suppliers are now using these materials for

reinforced door panels, passenger rear decks, truck linings and pillars. This market is expected

to continue to develop; and the possibility of a similar market development in North America is

very good since most automotive supplier companies are global. In 1999-2000, 87% of

European grown industrial hemp was used for specialty pulp and 6% was used for automotive

composites. By 2003, this had shifted to 70-80% for specialty pulp and 15-20% for automotivecomposites.

Hemp hurds, the short fiber inner woody core of the hemp plant, make excellent animal bedding

material, especially for horses that are allergic to straw. The hurds can absorb up to five (5)

times their weight in moisture; this is about 50% higher than wood shavings. They also compost

easily. Hemp processors in Europe depend on the sale of hurds to maintain their company

profitability. A similar market could be developed in North America; as in Europe, itsdevelopment may be essential to industry profitability.

Hemp seeds and hemp oil are also a potentially valuable market opportunity. The seeds have

exceptional nutritional value. They are second only to soybeans as a source of complete

vegetable protein; and hemp seeds contain all 8 essential amino acids in the correct proportions

humans require. Hemp seeds also contain 29-34% oil by weight. Hemp seed oil is

approximately 80% polyunsaturated essential fatty acids. Furthermore, the proportion of these

Page 4 of 11


oils in hemp seeds closely matches the ratios most beneficial to human nutrition. Therefore,

seeds offer another market opportunity for industrial hemp. There is one issue, however: this

high percentage of polyunsaturated fats also makes hemp seed oil somewhat unstable and subject

to fairly rapid rancidity, unless preserved or processed appropriately. Because of its fat

components, hemp oil should not be used for frying.

In 1998, Canada re-established industrial hemp production. It often takes 10-15 years for a new

agricultural industry to mature; and over the past 10+ years Canadian production has suffered

growing pains, as shown in the figure below. But, it is now considered to be maturing; and with

no U S production, it is expected to become a major supplier for U S hemp products.

Hemp Production in

Canada, Acres

60,000

50,000

40,000

30,000

20,000

10,000

Currently, the Canadian hemp market uses seeds from Europe. However, for optimal yield and

to meet the characteristics of developing hemp markets, new cultivars appropriate for the North

America climate and market need to be developed. This is in addition to establishing a cost-

effective processing infrastructure for the industry in North America.

HEMP PRODUCTION ECONOMICS

There are two potentially viable approaches to growing hemp commercially: growing hemp for

fiber or for seed. If hemp is grown for fiber, it is sown very densely (a seed rate of 300-380

lbs/acre is standard). Since hemp grows quickly, at this density it can effectively out compete

with weeds; and herbicides are not needed. If hemp is grown for seed and/or oil, it is grown

much less densely (typically 55-80 lbs/acre); this is not as effective at suppressing weeds, so

herbicides will be required. Hemp seed can be drilled or broadcast, though drilling is

recommended for uniformity. A standard grain drill or modified alfalfa seeder can be used for

sowing.

Page 5 of 11


Pesticides are generally considered unnecessary in the cultivation of hemp; however, hemp does

have significant nutrient demands. Once the seeds are planted, no further husbandry is required

until harvest, thus, minimizing labor costs and energy consumption. Irrigation, however, is

required if precipitation is less than 8 inches over the course of the growing period.

Currently, one of the most significant costs of growing hemp for fiber is the cost of seeds

because there are no domestic sources that ensure seed strains that meet the generally accepted

THC level of <0.3%. Not only are the transportation costs high (over half of the seed cost); but

certified seed demands a substantial premium. As a result, certified seed currently cost $62 -$79

per acre.

Hemp yields can vary radically; and until cultivars are developed for U S conditions, it can only

be stated that there are opportunities to significantly improve existing productivity. Experts also

believe that production costs can be lowered by exploiting hemp as a dual-purpose crop; i.e.,

providing both fiber and seed from the same plant.

From available information, producer returns from raising hemp are expected to be similar to

corn but better than soybeans raised on high productivity farmland: $600 - $1,000 per acre.

Using data available from the University of Illinois Department of Agricultural and Consumer

Economics (see Appendix A), operator return is estimated at $50 - $250 per acre once domestic

seed sources are available.

Although flax processing equipment has been shown to be adequate for processing hemp,

specifically designed equipment would be more effective and less costly. As mentioned earlier,

pressing hemp seed for oil requires special handling to avoid spoilage; but advanced seed oil

companies have already developed proprietary technology using inert gases and vacuums that

provide oil products with a shelf life of over one year.

REGULATORY ISSUES

The most critical issue associated with hemp production is the possibility it could allow covert

growing of marijuana. Indeed, this is the reason hemp cultivation was made illegal in North

America in the mid 20th century. It is now well documented that hemp will contaminatemarijuana plants and significantly lower their THC content; therefore, marijuana growers

generally avoid hemp fields. In addition, hemp is harvested much earlier than field grown

marijuana, making it detrimental for the two plants to share fields. Nevertheless, U S law

enforcement authorities do not believe they can differentiate between hemp and marijuana grown

in fields. In response to this concern, Canada and European Union countries have developed

stringent laws and regulatory procedures to oversee hemp production that ensures that only low

THC plant varieties are approved for agricultural production. U S law enforcement authorities

cite the resulting costs associated with regulating the industry as another reason for prohibiting

hemp production in the U S. Conversely, proponents point to the burgeoning international

industry as an opportunity for U S farmers.

Page 6 of 11


Canada can provide a benchmark for what a U S regulatory system would require. Health

Canada is the agency with primary responsibility for overseeing the regulatory program that was

developed for industrial hemp production by their Office of Controlled Substances. The

Industrial Hemp Regulations (IHR) were developed in 1998 as part of Canada's Controlled

Drugs and Substances Act (CDSA) to allow for strict regulation of industrial hemp production

and make a clear distinction between industrial hemp and other forms of Cannabis. These

regulations and procedures build on those developed within the European Union in the 1990s.

The following are included in the regulations:

0 Importers and exporters of industrial hemp, in the form of seed or viable grain, need to be

licensed; and in addition to holding a license, they are also required to obtain a permit for

each shipment

H The importer must ensure that shipments of viable grain are accompanied by foreign

certification; a list of countries having equivalent controls on the production of viable

grain is maintained and only grain from these countries can be imported

B Seed growers are restricted to minimum plots of one acre and are required to demonstrate

current membership in the Canadian Seed Growers Association; they are also required to

state the number of acres grown in the previous two years as part of their license

application

® Plant breeders must be registered with the Canadian Seed Growers Association and may

only cultivate industrial hemp in accordance with stated regulations

m Growers of fiber or viable grain need a license before they can purchase seeds or

cultivate industrial hemp; they must provide the number of acres grown in the previous

two years as part of their license application, which must also provide Global Positioning

System coordinates for cultivated sites and an accompanying map showing the site

locations in terms of their legal descriptions, a statement that the applicant is the owner of

the land or has rights to use the land, and the address where records required by the

regulations will be maintained

m Only pedigreed seeds of approved varieties may be planted

13 Licenses and audit trails are required for processing activities such as pressing seeds into

oil; only a person resident in Canada can maintain these records

B To obtain any license - be it for importation, exportation, production or sale of industrial

hemp - applicants are required to produce a police security check

03 Authorizations are required for transportation when products leave the control of a

license holder or for testing

m No person is allowed to advertize that a product or a derivative is psychoactive

Page 7 of 11


0 Every person legally cultivating industrial hemp must submit samples of their crop to a

licensed and accredited laboratory to ensure that the THC level is at or below 0.3%

Producers must also ensure that all equipment used to sow or harvest hemp is thoroughly cleaned

after each use to avoid the inadvertent dissemination of industrial hemp. In addition, at the time

of harvesting, all branches, leaves and flowering heads of the plant must be destroyed in a

manner that eliminates their use for any purpose not granted to the license holder. Storage of

hemp must be done in a locked container or locked location to which only authorized persons

have access. Finally, cultivation of industrial hemp within one kilometer of any school grounds

or any other public place frequented by persons under the age of 18 is prohibited.

The Royal Mounted Canadian Police believe that, under these regulations, industrial hemp

production in Canada has not contributed to a rise in marijuana activity or arrests.

If the U S were to adopt similar regulations, one concern is the associated cost, including

required testing. Health Canada personnel have not published annual cost data for maintaining

their regulatory program. However, it is evident from the number of people, laboratories and

hours dedicated to enforcing the regulations that their program requires significant financial

commitment. The Minnesota Department of Agriculture has estimated it would require about

$600,000 annually to provide for basic industrial hemp regulation and THC testing in their state.

These costs do not include any impact the regulations would have on law enforcement activities.

This report wasprepared with the assistance ofthe

Virginia Tech Business Technology Center.

Page 8 of 11


APPENDIX A

Corn and Soybean Returns for 2008, 2009P, and 2010P

Central Illinois - High Productivity Farmland

Source: University ofIllinois Department ofAgricultural and Consumer Economics

Yield/ Acre

Price /Bushel

Crop Revenue

ACRE Revenue

Other Gov't Revenue

Crop Insurance Proceeds

Gross Revenues/Acre

Fertilizer

Pesticides

Drying & Storage

Crop Insurance

Total Direct Costs

Fuel and oil

Machine repair

Machine Depreciation

Tower Power Costs

Hired labor

Insurance

2008

199

$4.5

$806

0

25

22

$853

L2i746.67

30

27

$294

22

17

29

14

$82

1110

2009P

200

$3.25

$650

25

24

20

$719

170

5095

36

27

$378

20

18

30

16

$84

1110

Interest (non-land)

Other

Total Overhead Costs

Operator & Land Return

Cash Rent

Operator Return/Acre

14

17

$52

$425

197

$228

18

16

$55

$202

210

-$8

2010P

192

$3.75

$720

0

24

$744

95

50

100

30:

27

m

10

20

16

$57

$304

210

$94

50

$10.15

$508

0

25

$558

42

28

51

$9.40

$479

024

2010P

55

$10.00

$550

0

24

$507 $574

43

6

18

85

30

52.5

7

17

$302

17

18.]30

16

$81

$137

19

IM

26

11

$70

$192

18

.4

27

11

$70

II

$159

17

14

27

11$69

10

10

13

13

$46

$305

197

$108

10

10

50

30

55

17

755

17

14

27

11

\69

1

10

17

13

$50

$196

-$15

19

13

$52

$294

210

$84

Page 9 of 11


APPENDIX B

References

Industrial Hemp in the United States: Status and Market Potential AGES-ERSAGES001,

January 2000

Hemp - a New Crop with New Usesfor North America, E. Small & D. Marcus, Presented at the

5th National Symposium New Crops and New Uses: Strengths in Diversity, November 2011

American Farm Bureau Drops Opposition to Hemp, Reuters News Service, January 1999

Hemp as an Agricultural Commodity, R. Johnson, Congressional Research Service, December2010

Feasibility ofIndustrial Hemp Production in the United States Pacific Northwest, D.

Ehrensing, Oregon State University, May 1998

Hemp Facts, North American Industry Hemp Council

Industrial Hemp Report, Minnesota Department of Agriculture, December 2010

Comparison ofBiodiversity Friendliness ofCrops with Special Reference to Hemp, S.

Montford and E. Small, Journal of the International Hemp Association, Vol 6(2), December

1999

Commercial Production ofIndustrial Hemp, Health Canada, March 1998

National Industrial Hemp Strategy, Manitoba Agriculture, Food and Rural Initiative,

Agriculture and Agri-Food Canada, March 2008

Growing Industrial Hemp in Ontario - Fact Sheet, W. Baxter & G. Scheifele, Ontario Ministry

of Agriculture, Food and Rural Affairs, August 2009

Industrial Hemp Production in Canada, G. Atkinson, Alberta Agriculture and Rural

Development, February 2011

Performance-Based Industrial Hemp Fiber Will Propel New Technologies in the 21st Century,

P. Nelson, The Vote Hemp Report, 2002/2003

European Hemp Industry: Fiber Demandfor Novel Uses on the Rise, M. Karus, The Vote

Hemp Report, 2002/2003

European Hemp Industry 2001 Till 2004: Cultivation, Raw Materials, Products and Trends,

M. Karus, February 2005

Page 10 of 11


Report on Industrial Hemp, Report on Bio-Based Plastics and Composites, Edition 7 April2010 ' F

European Hemp Fibresfor Diverse Bio-Based Products, European Industrial HempAssociation, 2010

Hemp Seeds andHemp Oil as Food, European Industrial Hemp Association, 2009

Hemp's Future in Chinese Fabrics, Natural Fibers 2009, Food and Agriculture Organization ofthe United Nations, 2009

Environmental Benefits of Using Industrial Hemp, A. Kerr, The Larch Company, 2005

Countries Growing Industrial Hemp Today, 420 Magazine, July 2008

Wikipedia articles on Hemp and Cannabis

Corn and Soybean Returns in 2009 and 2010, Farm Economics Facts & Opinion (FEFO 09-

13), Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, September 2009

Page 11 of 11

—, AT A SPECIAL MEETING OF THE BOARD OF SUPERVISORS OF THE COUNTY OF

MONTGOMERY, VIRGINIA HELD ON THE 3rd DAY OF OCTOBER, 2011 AT 5:30 P.M.

IN THE COUNTY ADMINISTRATION CONFERENCE ROOM, MONTGOMERY COUNTY

GOVERNMENT CENTER, 755 ROANOKE STREET, CHRISTIANSBURG, VIRGINIA:

R-FY-12-31

A RESOLUTION URGING THE 112™ CONGRESSTO ADOPT THE INDUSTRIAL HEMP FARMING ACT

On a motion by Gary D. Creed, seconded by Doug Marrs and carried unanimously,

WHEREAS, The industrial hemp industry has recently experienced a revitalization with

worldwide hemp sales continuing to increase; and

WHEREAS, Faltering agricultural economics in a number ofstates have created pressure to

investigate alternative crops, including industrial hemp; and

WHEREAS, Industrial hemp's three raw materials - fiber, hurds and seeds, can be used in

more than 25,000 products, including textiles, rope, cellulose plastics, resin, particle board, paper

products, shampoo, vitamins and oil; and

WHEREAS, The histories of the United States and Virginia are replete with examples ofthe

utility of and dependence on industrial hemp, which was legally cultivated in Virginia and many

other states until the late 1930's; and

WHEREAS, Although industrial hemp is derived from the Cannabis Sativa plant, it is

distinctive from its better known relative in that it contains less than one percent of the chemical

responsible for its psychoactivc properties; and

WHEREAS, Under the current Untied States drug policy, all Cannabis varieties, including

hemp, are considered Schedule I controlled substances under the Controlled Substances Act and as

such the growing of industrial hemp is controlled and strictly regulated by the U.S. Drug

Enforcement Administration (DEA); and

WHEREAS, The growing of industrial hemp in the United States has been allowed only by a

federal permit issued by the DEA, and the conditions of such a permit are so restrictive as to make

the experimental cultivation of hemp essentially impossible; and

WHEREAS, The Virginia General Assembly has urged the federal government to revise the

necessary regulations so as to permit the controlled experimental cultivation of industrial hemp in

Virginia; and

^^ Industrial Hemp Farming Aci

r Page I of2

WHEREAS, The National Farmers Union (NFU) has urged the President, Attorney General

and Congress to direct the U.S. DEA to differentiate between industrial hemp and marijuana and

adopt a policy to allow American farmers to grow industrial hemp under state law without requiring

DEA licenses; and

WHEREAS, The National Association of State Departments ofAgriculture support revisions

to the federal rules and regulations authorizing commercial production of industrial hemp and has

urged the DEA to develop and adopt an official definition of industrial hemp that comports with

definitions currently used by Countries producing hemp; and

WHEREAS, The Industrial Hemp Farming Act (House Resolution 1831), has been

introduced in Congress with the intention of removing Industrial Hemp as a Schedule 1 controlled

substance under the Controlled Substance Act and allowing the State Legislatures to license and

regulate the commercial production of hemp as an industrial and agricultural commodity; and

WHEREAS, The Montgomery County Board ofSupervisors hereby supports the adoption of

the Industrial Hemp Farming Act by Congress in order to facilitate the commercial cultivation of

industrial hemp by granting the states the necessary' authority to license and regulate the productionof hemp as an industrial and agricultural commodity.

NOW, THEREFORE, BE IT RESOLVED, By the Board of Supervisors of the County of

Montgomery, Virginia that the Board of Supervisors hereby urges the 112th Congress to adopt the

Industrial Hemp Farming Act and grant the States the authority to license and regulate the production

ofhemp as an industrial and agricultural commodity which in turn will open the market for farmers,

businesses and entrepreneurs in the emerging and fast growing hemp industry.

The vote on the forgoing resolution was as follows:

AYE NAY

Gary D. Creed None

Annette S. Perkins

William H. Brown

Mary W. Biggs

Doug Marrs

John A. Muffo

James D. Politis

ATTEST

Industrial Hemp Farming Act

Page 2 of2

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H.R.1831

Latest Title: Industrial Hemp Farming Act of 2011

Sponsor: Rep Paul. Ron [TX-14] (introduced 5/11/2011) Cosponsors (37)Related Bills:S.35Ol

Latest Major Action: 6/1/2011 Referred to House subcommittee. Status: Referred tothe Subcommittee on Crime, Terrorism, and Homeland Security.

Jump to: Summary, Major Actions, All Actions, Titles, Cosponsors, Committees. Related

Bill Details, Amendments

SUMMARY AS OF:

5/11/2011-Introduced.

Industrial Hemp Farming Act of 2011 - Amends the Controlled Substances Act to excludeindustrial hemp from the definition of "marihuana." Defines "industrial hemp" to meanthe plant Cannabis sativa L. and any part of such plant, whether growing or not, with a

delta-nine tetrahydrocannabinol concentration of not more than 0.3 percent on a dryweight basis. Deems Cannabis sativa L. to meet that concentration limit if a person

grows or processes it for purposes of making industrial hemp in accordance with statelaw.

MAJOR ACTIONS:

***NONE***

ALL ACTIONS:

5/11/2011:

Sponsor introductory remarks on measure. (CR E869)5/11/2011:

Referred to the Committee on Energy and Commerce, and in addition to theCommittee on the Judiciary, for a period to be subsequently determined by the

Speaker, in each case for consideration of such provisions as fall within thejurisdiction of the committee concerned.

5/11/2011:

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Referred to House Energy and Commerce

5/13/2011:

Referred to the Subcommittee on Health.

5/11/2011:

Referred to House Judiciary

6/1/2011:

Referred to the Subcommittee on Crime, Terrorism, and Homeland Security.

TITLE(S): (italics indicate a title for a portion of a bill)

• SHORTTITLE(S) AS INTRODUCED:

Industrial Hemp Farming Act of 2011

• OFFICIAL TITLE AS INTRODUCED:

To amend the Controlled Substances Act to exclude industrial hemp from thedefinition of marihuana, and for other purposes.

COSPONSORS(37), ALPHABETICAL [followed by Cosponsors withdrawn]: (Sort:_bydate)

Rep Amash. Justin [MI-3] - 12/17/2012

Rep Baldwin. Tammv [WI-2] - 5/11/2011

Rep Benishek, Dan [MI-1] - 5/23/2011

Rep Blumenauer. Earl [OR-3] - 5/11/2011

Rep Bonamici, Suzanne [OR-1] - 9/11/2012

Rep Campbell. John [CA-48] - 5/13/2011

Rep Clarke, Hansen [MI-13] - 1/31/2012

ReoClav. Wm. l,ary [MO-1] - 5/11/2011

Rep Cohen, Steve [TN-9] - 5/11/2011

Rep DeFazio, Peter A. [OR-4] - 5/11/2011

Rep Ellison, Keith [MN-5] - 5/11/2011

Reo Farr. Sam [CA-17] - 5/11/2011

Rep Filner, Bob [CA-51] - 12/7/2011

Rep Frank. Barnev [MA-4] - 5/11/2011

Rep Griialva, Raul M. [AZ-7] - 5/11/2011

Rep Hanna. Richard L. [NY-24] - 9/18/2012

Rep Hinchey, Maurice D. [NY-22] - 5/11/2011

Rep Honda. Michael M. [CA-15] - 5/12/2011

Rep Johnson, Timothy V. [IL-15] - 11/3/2011

Rep Kucinich. Dennis 3. [OH-10] - 5/11/2011

Rep Massie, Thomas [KY-4] - 11/27/2012

Rep McClintock. Tom [CA-4] - 5/11/2011

Rep McDermott, Jim [WA-7] - 5/11/2011

Rep Miller. George [CA-7] - 5/11/2011

Rep Moran, James P. [VA-8] - 5/11/2011

Rep Nadler. Jerrold [NY-8] - 5/11/2011

Rep Norton, Eleanor Holmes [DC] - 1/6/2012

Rep Peterson, Collin C. [MN-7] - 10/25/2011

Rep Pinqree, Chellie [ME-1] - 5/11/2011

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Rep Polis, Jared [CO-2] - 5/11/2011

Rep Rehbera. Denny [MT] - 7/6/2011

Rep Rohrabacher, Dana [CA-46] - 5/11/2011

Rep Schakowskv, Janice P. [IL-9] - 5/11/2011

Rep Schrader, Kurt [OR-5] - 10/14/2011

Rep Stark. Fortnev Pete [CA-13] - 5/11/2011

Rep Welch, Peter [VT] - 10/11/2011

Rep Woolsey. Lynn C. [CA-6] - 5/11/2011

COMMITTEE(S):

Committee/Subcommittee: Activity:

House Energy and Commerce Referral, In Committee

Subcommittee on Health Referral

House Judiciary Referral, In Committee

Subcommittee on Crimer

Terrorism, and Homeland Referral

Security

RELATED BILL DETAILS: (additional related bills may be indentified in Status)

Bill: Relationship:

S.3501 Related bill identified by CRS

AMENDMENT(S):

***NONE***

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2001 SESSION

ENROLLED

HOUSE JOINT RESOLUTION NO. 605

Requesting the Commission on Rural Prosperity to consider the growth and production of industrial

hemp in Virginia as a means to promote rural prosperity.

Agreed to by the House of Delegates, February 2, 2001

Agreed to by the Senate, February 14, 2001

WHEREAS, although industrial hemp is derived from the Cannabis sativa plant, it is distinctive from

its better known relative, in that it contains less than one percent of the chemical responsible for its

psychoactive properties; and

WHEREAS, similar to jute and flax, industrial hemp's three principal raw materials—fiber, hurds, Hand seeds can be used in more than 25,000 products, including textiles, rope, cellulose plastics, resin, Mparticle board, paper products, shampoo, vitamins and oil; and

WHEREAS, faltering agricultural economies in a number of states have created pressure to

investigate alternative crops, including industrial hemp; and

WHEREAS, the 1996 Farm Bill has reduced and will continue to reduce government subsidies,

pushing farmers to examine alternative cash crops; and

WHEREAS, increased foreign competition in established markets, such as tobacco, as well as

innovative work with industrial hemp by Canada and the European community, have prompted increased

interest in the economic vitality of industrial hemp; and

WHEREAS, the histories of the United States and Virginia are replete with examples of the utility of

and dependence on industrial hemp, which was legally cultivated in Virginia and many other states until

the late 1930s; and

WHEREAS, the industrial hemp industry has recently experienced a revitalization, with worldwide

hemp sales continuing to increase; and

WHEREAS, in 1996 the American Farm Bureau Federation, representing 4.6 million farmers

nationwide, passed a unanimous resolution urging research into the viability and economic potential of

industrial hemp; and

WHEREAS, the growing of industrial hemp in the United States has been allowed only by federal

permit, and the conditions of such a permit are so restrictive as to make the experimental cultivation of

hemp, even under the auspices of a state university with strict controls, essentially impossible; and

WHEREAS, the United States Drug Enforcement Administration correctly states that it has never

turned down an application for the experimental cultivation of hemp, but it is equally true that due to

the excessive restrictions placed on the required permit, only the State of Hawaii is currently authorized

by the federal government to cultivate hemp; and

WHEREAS, during the 1999 Session, the General Assembly passed House Joint Resolution No. 94,

urging the federal government to revise the necessary regulations so as to permit the controlled,

experimental cultivation of industrial hemp in Virginia; and

WHEREAS, the United States Drug Czar and the United States Drug Enforcement Administration

(DEA) raised objections to even the controlled, experimental cultivation of industrial hemp; and

WHEREAS, in May 2000, the State of Maryland enacted legislation to establish a four-year pilot

program to grow industrial hemp on state-owned land under tightly controlled circumstances; and

WHEREAS, legislatures in both North Dakota and Minnesota have recently enacted legislation

allowing farmers statewide to cultivate hemp and the Illinois legislature is likely to reconsider a bill

referred during the last session to allow two state universities to study the feasibility of cultivating

industrial hemp; and

WHEREAS, increased interest by states in the cultivation and production of industrial hemp has

prompted the DEA to review its hard line stance, and expected changes in the administration of the

agency due to the recent election may result in the easing of current restrictions; and

WHEREAS, other states are positioning themselves to produce industrial hemp and the

Commonwealth of Virginia should be prepared to cultivate industrial hemp if the current restrictions are

eased; now, therefore, be it

RESOLVED by the House of Delegates, the Senate concurring, That the Commission on Rural

Prosperity be requested to consider the growth and production of industrial hemp in Virginia as a means

to promote rural prosperity. In its deliberations, the Commission shall confer with the Department of

Agriculture and Consumer Services, the Virginia Economic Development Partnership, the Department of

Environmental Quality, and the Virginia State Police regarding the appropriateness and efficacy of

developing guidelines for cultivating industrial hemp; and, be it

RESOLVED FURTHER, That the Clerk of the House of Delegates transmit copies of this resolution

2 of 2

to the Secretary of Commerce and Trade, the Secretary of Natural Resources, and the Secretary of

Public Safety so that they may be apprised of the sense of the General Assembly on this matter.

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S.3501

Latest Title: Industrial Hemp Farming Act of 2012

Sponsor: Sen Wvden, Ron [OR] (introduced 8/2/2012) Cosponsors (3)

Related Bills:H.R.1831

Latest Major Action: 8/2/2012 Referred to Senate committee. Status: Read twice andreferred to the Committee on the Judiciary.

Jump to: Summary, Maior Actions, All Actions. Titles, Cosoonsors, Committees, Related

Bill Details, Amendments

SUMMARY AS OF:

8/2/2012-Introduced.

Industrial Hemp Farming Act of 2012 - Amends the Controlled Substances Act to exclude

industrial hemp from the definition of "marihuana." Defines "industrial hemp" to mean

the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a

delta-nine tetrahydrocannabinol concentration of not more than 0.3 percent on a dry

weight basis. Deems Cannabis sativa L. to meet that concentration limit if a person

grows or processes it for purposes of making industrial hemp in accordance with statelaw.

MAJOR ACTIONS:

***NONE***

ALL ACTIONS:

8/2/2012:

Read twice and referred to the Committee on the Judiciary.

TITLE(S): (italics indicate a title for a portion of a bill)

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• SHORT TITLE(S) AS INTRODUCED:

Industrial Hemp Farming Act of 2012

• OFFICIAL TITLE AS INTRODUCED:

A bill to amend the Controlled Substances Act to exclude industrial hemp from thedefinition of marihuana, and for other purposes.

COSPONSORS(3), ALPHABETICAL [followed by Cosponsors withdrawn]: (Sort:_bydate)

Sen Merklev, Jeff [OR] - 8/2/2012

Sen Paul. Rand [KY] - 8/2/2012

Sen Sanders, Bernard [VT] - 8/2/2012

COMMITTEE(S):

Committee/Subcommittee: Activity:

Senate Judiciary Referral, In Committee

RELATED BILL DETAILS: (additional related bills may be indentified in Status)

Bill: Relationship:

H.R.1831 Related bill identified by CRS

AMENDMENT(S):

***NONE***

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