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HomeMy WebLinkAboutCOM 0220.008 1996-1998 COMM/7T~~ES OF CORRESPONDE-~~CE, /NC. ..n A/Jiet~ 01 Drop tfrrch /inemeton.r - 24 Adanrr St.. Dames. MA 0 7 8 23-2718 ('508-774-2847) 'Wika A/akar Miyoht' Western states November 1994 ~ Information Network Frank P. Su'a, Jr. HEM P Regional Coordinator Hawaii by wsrN ,Jeanette McDougal MM CCDP Honolulu Pcosecutocs Office Bus:(808)527-6509 + ~ 1060 Richards St.,Rm.10-081 Page 525-0566 Agent,Wayne Roques, DFJ4 Honolulu, Hawaii 96813 Fax: 527-6835 The term "hemp" has, for many centuries, been applied to a number of different fiber bearing plants. These inGude true hemp (Cannabis sativa), thought to have originated in China and brought to North American where it was widely cultivated during colonial times; abaca or Manila hemp (Musa textilis), grown in the Philippines and other Pacific Islands; Suns hemp (Crotalaria juncea), a fiber plant harvested in India and other parts of Asia; Mauritius hemp (Furoraea gigantea) grown in Africa; New Zealand hemp (Phormium tenax); India hemp (Corohorus capsu/aris) also known as "jute;" various forms of sisal (Agave sisalana) grown in Africa and the West Indies; and Cuban or Mexican sisal (Agave fouroroydes). Today all of these fibers are used primarily in the manufacture of rope and twine. True hemp (Cannabis sativa) is still grown for fiber on a limited scale in Russia and some eastern European nations where it is also grown for birdseed (most of which is devitalized and exported to the west). It should be noted that "true hemp" (Cannabis sativa) is the only one of the hemp fibers which contains a psychoactive ingredient (tetrahydrocannabinol or THC). Since hemp production in the U. S. could not compete practically or economically with plant fibers produced in other countries, by 1933 (five years before implementation of the Hemp Taxation Ad) production of true hemp in the United States had diminished to less than 200 acres. Because the Japanese invasion of the Philippine Islands during World War II put a stop to U. S. importation of Manila hemp (used for marine ropes) lt became necessary for the U. S. to once again produce its own hemp, and by 1943, 146,000 acres of hemp were harvested for fiber, most of which was used for military purposes. Source: Prindples or Field Crop Production The Macmillan Company, 1919 After World War II and the discovery and increased availability of nylon and other synthetic fibers, all of which were stronger and more durable than plats fibers, production of hemp again declined and even though avenues for importation of the various plant fibers were open, importation on a large scale was never resumed. American hemp farmers retumed to pre-World War II food crops but third world countries were not so fortunate. In the Yucatan Peninsula of Mexico, for instance, Mexican hemp (Agave founroydes) "once used to make twine and rope that brought great wealth to that part of Mexico..., almost disappeared, driven out by the development of plastics and synthetic rope and cheaper production in Africa and South America." By 1964 the failing Mexican hemp 4.,;trmaL. Di~a.~. Itet. ~t a t ..~SEOC,. tlel. Y~ate... APR ,,,3, tsar COMM/TTFES OF CORRESPONDPJCE, INC. .n Affiliate of Drug Watch Intamationr 24 Adams St, Danvers, MA 01923-2718 (508-774-2641) 'Witte Make,Might' November 1994 HEMP by Sandra S. Bennett, Jeanette McDougal, MM, CCDP and Special Agent,Wayne Rogues, DEA The term "hemp" has, for many centuries, been applied to a number of different fiber bearing plants. These include true hemp (Cannabis sativa), thought to have originated in China and brought to North American where it was widely cultivated during colonial times; abaca or Manila hemp (Musa textills), grown in the Philippines and other Pacific Islands; Sunn hemp (Crotalaria juncea), a fiber plant harvested in India and other parts of Asia; Mauritius hemp (Furcraea gigantea) grown in Africa; New Zealand hemp (Phormium tenax); India hemp (Corchorus capsularis) also known as "jute;" various forms of sisal (Agave sisalana) grown in Africa and the West Indies; and Cuban or Mexican sisal (Agave fourcroydes). Today all of these fibers are used primarily in the manufacture of rope and twine. True hemp (Cannabis sativa) is still grown for fiber on a limited scale in Russia and some eastern European nations where it is also grown for birdseed (most of which is devitalized and exported to the west). It should be noted that "true hemp" (Cannabis sativa) is the only one of the hemp fibers which contains a psychoactive ingredient (tetrahydrocannabinol or THC). Since hemp production in the U. S. could not compete practically or economically with plant fibers produced in other countries, by 1933 (five years before implementation of the Hemp Taxation Act) production of true hemp in the United States had diminished to less than 200 acres. Because the Japanese invasion of the Philippine Islands during World War II put a stop to U. S. importation of Manila hemp (used for marine ropes) it became necessary for the U. S. to once again produce its own hemp, and by 1943, 146,000 acres of hemp were harvested for fiber, most of which was used for military purposes. Source: Principles of Field Crop Production The Macmillan Company, 1949 After World War II and the discovery and increased availability of nylon and other synthetic fibers, all of which were stronger and more durable than plant fibers, production of hemp again declined and even though avenues for importation of the various plant fibers were open, importation on a large scale was never resumed. American hemp farmers returned to pre-World War II food crops but third world countries were not so fortunate. In the Yucatan Peninsula of Mexico, for instance, Mexican hemp (Agave fourcroydes) "once used to make twine and rope that brought great wealth to that part of Mexico..., almost disappeared, driven out by the development of plastics and synthetic rope and cheaper production in Africa and South America." By 1964 the failing Mexican hemp 1 llca N . .�.-...,_�,f W .__� . _ . l.IPP n irci industry had been nationalized and though hemp farmers were heavily subsidized the industry did not survive. Source: New York Times IMematbnal 8/16/1993 While the various forms of plant fibers referred to as "hemp" are still being grown and used in less developed countries, except as a novelty item hemp, for anything other than garden twine or burlap, cannot compete. The recent effoR to "revitalize" the hemp industry in the United States as a panacea for the economic, fuel, dothing, health and fuel problems of the world is unfounded and at best would have a negative impact on struggling hemp industries in many poorer countries. The environmental, agricultural, and other claims for hemp are no more than a .shallow ruse being advanced by those whos believe that revitalizing the hemp industry is a way to legitimize the cultivation and possession of Cannabis cativa (hemp, marijuana, gangs, doge) for use as a drug for getting high. According to pro-drug advocate Eric Sterling„ this is part of the drug cukure's "'leaky bucket' strategy. Legalize it (Cannabis saliva) in one area, and sooner or later it will trickle down into the others." Sounx: Mademoiselle, September 1993 The practical result of permitting farmers to grow marijuana for its fiber properties is well illustrated by the Netherlands experiment where "growers [of high THC content marijuana used for smoking] routinely escape prosecution by claiming their crops are for legitimate agricultural use such, as the production of birdseed or fiber for making rope." Source: Ben Hirschier, Reuter News Service, January 9, 1993 HEMP CLAIMS vs REALITY Drug Culture Definition of hemp: "Hemp means the entire Cannabis saliva plant whether male or female, except for cannabis." Source: (:olorado Hemp Initiative, 1994 13EALIlY: Hemp (true hemp) is Cannabis saliva. Although "hemp" is a term used to describe a number of hard fiber plants, including Cannabis saliva or "true hemp," it is increasingly being used interchangeably with the terms "marijuana; bud, chronic, blunt, dope," etc., by those promoting legalization of drugs. Drug Culture Claim: "Hemp ran save the rain forest." l?F~! !TY: There is no direct link between growing hemp and saving the rain forest(s). Any indirect link is obscure and like saying that "cleaning one's plate will eliminate world hunger." Drug Culture Claim: "Hemp benefds the soil." aEei ITY: °Field crops such as com, sorghum, alfalfa, and many other field crops produce more tonnage per arxe than hemp. In fact, compared to crops like alfalfa, hemp is very inferior in not only yield but in preventing erosion, and does not add nitrogen to the soil. Hemp is an annual crop and production is just as damaging to soil productivity and loss of soil from erosion as most of the common field crops, 2 and more damaging than some. They speak of hemp's strong roots preventing soil erosion but hemp's roots are hardly unusual. Com and other grass crops do a better job in this respect because they have more extensive, fibrous root systems." ~ Drug Culture Claim: "Hemp can save the environment." REALITY: "Hemp is an annual crop. Every year the soil would have to be prepared. It would have to be cultivated and plowed leaving no vegetative cover on the ground to give off oxygen into the atmosphere." ~ "The expenditure of energy to produce an annual hemp crop, whether from gasoline or other fuels, or from the lungs of animals .or humans, would produce and release carbon dioxide into the atmosphere." ~ Drug Culture Claim: "Hemp (Cannabis sativa) has 'hundreds' of therapeutic . benefits." REALITY: In 1982 A Surgeon General's warning was issued against hemp/ marijuana use by then Surgeon General C. Everett Koop. In February of 1994 hemp/marijuana was disallowed as a "medicine" by the U. S. Dept. of Health and Human Services, the National Institutes of Health, and the DEA because it has repeatedly failed to meet any of the criteria used by the FDA for approving a substance as a medicine. Additionally, hemp has a highly allergenic pollen. In a test of 90 patients suffering from allergies, 70% tested skin reactive to marijuana pollen as opposed to 20% for tobacco leaf. Allergy to hemp pollen is common. z "The essential oils found in hemp seeds are vastly inferior in quantity and quality to essential oils found in crops such as flax seed and soy bean." s Drug Culture Claim: "Hemp needs no chemical fertilizers." REALITY: "In countries where hemp is grown commercially pesticides and fertilizers are used similarly as they are with all other commercial crops." ~ "Fertilizer need depends on yield. High yield removes more nutrients from the soil than do low yields." ~ According to U. S. law enforcement officers large caches of high nitrogen fertilizers and rodenticides are found at illegal hemp (marijuana) growing sites. Drug Culture Claim: "Hemp is superior to and more abundant than wood pulp for making paper." RFeL!?'Y: "Nothing can compete with forests for paper pulp as far as saving energy and absorbing carbon dioxide from the atmosphere. Many fast growing trees are being used for this purpose and new ones are being developed. For example, a crop of Minnesota aspen trees harvested about every 15 to 20 years for paper pulp is far more energy efficient and vastly more efficient at removing carbon dioxide from the atmosphere than hemp or any other annual plant. Wdh proper management, aspen forests regenerate themselves and are healthier when mature trees are systematically harvested." ~ 3 - Drug Culture Claim: "Hemp is needed as a substitute for petroleum." REALITY: "The Gaim that hemp is needed to replace petroleum fuel is misleading because com is already meeting market demands for vegetable-based ethanol fuel. Other more economically produced plants such as sorghum, sugar cane, and sugar beets can be and are being used worldwide for that purpose. For replacing petroleum oil in pesticide sprays, oil seed crops such as soybeans, sunflower and flax are already being used." ~ Drug Culture Claim: "Hemp fiber is needed by the textile industry." REALITY: "Cotton is the number one fiber crop of the world because it is the cheapest and most useful. For finer cloths, there is linen from flax." ~ "Although hemp can be grown commercially in Europe and many other areas, it is not a major crop nor a necessity, and while it could be a useful crop for a special market, it is not essential and would complicate enforcement of drug laws. " ~ "...it would make far more sense for U. S. Industry to consider returning to the use of agricultural residues which are grown for other purposes, such as wheat straw, seed grass straw and grain sorghum stalks, rather than attempting to grow a plant just for its fiber content, such as kenaf and hemp." 4 Drug Culture Claim "Hemp would prevent deforestation." REALITY: "(T)o dispel a commonly held myth, the great forests of the U.S., though smaller than in times past, have certainly not disappeared. The nation's forest land base of 731 million acres is still about two-thirds the size it was when European settlement began along the eastern seaboarb in the 1600s." 5 In fact, "the number of trees is greater today - an estimated 230 billion -than at any time since the turn of the century, and timber growth (in cubic feet) exceeds annual harvest by 33 percent." 6 "Some of the world's most productive and best-managed forest lands are located in the United States. We should continue... to manage them responsibly for the benefit of all." 5 Footnotes: 1 Robert G. Robinson, Ph.D., Professor EmeMus, 4. Joseph E. Atchison, Ph.D., International Consultant University of Minnesota Department of Agrononry to the Pulp and Paper Industry and Plant Genetics. (Dr. Robinson grew hemp for crop research purposes for the University of 5. Jim Bowyer, Head, Dept. of Forest Products, Minnesota.) University Of Minnesota, TM Omgonian 11/1193 2. G. L. Freeman, M.D., Western Journal of Medidne, June 1983 138:829-831 6. Figures from U. S. Forest Service. Adapted from 'The TMh Aboul America's Forests,' Evergreen, 3. Professor Bruce J. Holub, Ph.D., Department of 4025 Crater Lake Highway., Medford, Oregon Nutritional Saences, University of Guelph, Guelph, 97405 Ontario, Canada Oecembsr 1994 (Rev. 2) 4 Q rugV1 Position Statement on Hemp (Cannabis Saliva) There is no ernnomically or environmentally sound justification for legalization and reintroduction of hemp cultivation in North Amerin. The pmpaign to reintroduce hemp/mar(juana as a viable agriculture rnmmodity is one of a number of strategies being promoted by the pro-drug lobby to legalize mar(juana. BACKGROUND: The term "hemp" refers to a variety of plants including sisal, jute, kenaf, manila hemp and true hemp. whose stems and leaves can be used for producing hard fibers. True hemp (Cannabis Saliva), commonly referred to as marijuana. was grown in the United States during Revolutionary times priman7y for the manufacture of rope and canvu. However, by 1930 United States hemp production had fallen to less than 200 acres and products comaining hemp wen; imported primarily from the Philippines and Mexico. During World War II the Philippines carne undercontml of the Japanese. and farmers in the United Stasis wore etrcouraged to cultivate hemp for the war effort. However, the discovery and mass production of nylon and other synthetic fibers during the war years rendered hemp products all but obsolete and hemp cultivation in the United States erdsd. Farmers tlten returned to more useful, productive, and profitable crops. in pursuit of legalization, the pn>-dntg lobby has made a wide array of false misleading, and unsubstarttisted claims alleging that marijuana/hanp production can save the rain forests and protect the environment by replacing "fifty-thousand" wood, plastic, or7, food and textile products. The reintroduction of hemp/marijuana as a crop has been proposed for consideration by Canada's Parliament And, in the United States, petitions are being distributed by the pro-drug lobby to place the hemp/marijuana cultivation initiative on election ballots in several states. The hemp/marijuana campaign is particularly aimed at high school and college students who are being actively recruited into the pro-drug ideology. This is evidenced by the dramatic rise in marijusrta/ttemp symbols on youth-oriented products, and pra-t?emp/a?arijttana clubs, and establishments on or hear tollegc campuses. RATIONALE: The claimed advantages of hemp/mar~juana over other raw materials are false. There is no need for products made from Cannabis Saliva (true hemp), as better alternative products exist in every case. Trees: Nothing tar? canpete with forests for pulp as faz as saving energy and using the carbon dioxide in the atmosphere. Contrary to the myth that "we're running out of trees." the U.S. Foust Service reports that timber growth (in cubic feet) exceeds annual hazvests by 33 percent. Tn fact, the number of uses is grsater today, an estimated 230 billion, than at any time since the tutu of the century. Furthermore: forests are healthier if mawre trees are harvested. Other Plants: Many plants such as com, sorghum, and alfalfa produce more totutage per acre, art more soil building than hemp, and are already mating market demartds for alttrnative fuels, such as ethanol fuel. Plastic & Synthetic Fibers: Hemp fiber is inferior for making rope, twine, and other products where durability and strength are important because unlike plastic and synthetics, hemp absorbs water, brx:omcs heavy and rots casIly. Cannabis cultivation has caused serious environmental rnnsequences. The United Nations Drug Control Programme reports that the negative impact of cannabis cultivation upon forest emrirotunents in Colombia and Jamaica has been profound. Besides the extensive use of herbicides and chemical fertilizers which are treed in the process of cannabis cultivation, deforestation and soil erosion have had significant adverse effects on the enviromnent Additionally, hemp/marijuana smoke, like tobacco smoke, rnnwins toxic environmental pollutants inducting grbon monoxide and a high percentage of carcinogens. Cultivation of hemp/marUuana as a commercial field crop would increase the problems of drug use and drug trafficking in marijuana, adding enormously to the world's drug problems. psychoactive properties (THC content): Of the group of plants referred m as "hemp". only Cannabis Sativa contains a psydroactive substance (THC). The level of teuahydrocarurabinol (TH(_7 of a plant cannot be discerned with the naked eye. As a rcsuh, hemp marijuana purportedly grown for legal uses could easily be diverted m the illegal drug market The casts to monitor such a system would be incalculable. The current campaign to reintroduce hemp/marijuana in the United States and Canada as a viable and essential agricultural commodity is a subterfuge being empbyed by the pro-drug lobby to weaken the existing strong public aversion to the legalization and general use of psychoactive and addictive drugs r t t By ,rly 7. Kinard, Educational Consultant R Jeanette „nags!, MM, OCDP • • • Hemp/marijuana is a bast fiber similar to flax, kenaf and jute.' • • • Existing federal law does not differrntiate betwern low-percentage-THC hemp/marijuana (Cannabis saliva) and high-percentage-THC bemp/marijuanar • Federal regulation does allow for the legal ux and distribution of hemp stalks; however, all leaves, buds, and stems arc treated az a controlled substance and therefore must be disposed of according to federal regulations. There are currently no guidelines for agri- business in the disposal of the controlled substance by-products.' • Satisfying the THC criteria in the plants would be extremely costly to a state. Testing processes would have to be developed that would include protocols, schedules and standards.' • No safeguards exist against diversionary plots within approved fields.' • Hemp (Cannabis saliva L, and Cannabis India) is classified az a Schedule I Controlled Substance, regardless of its narcotic content, under the Controlled Substance Act az amended. Regulatory authority is vested in the Office of the U.S. Attorney General and is, cartied out by the Drug Enforcement Administration (DEA). Cannabis permits are restricted to the researchers, police, and analytic laboratories. The DEA is opposed to any consideration of hemp az a legitimate fiber or pulp product' • Federal laws and all states laws except Kentucky exempt the mature stalks and infertile seed." • • • Legal issues currently preclude research into the viability of industrial hemp fibu production in the United States.' • Textiles and paper pulp arc the two markets for which hemp fibers have been considered. Aside from the legal issue, the limited information available suggests that industrial hemp fiber profitability is highly uncertain. Experience in Europe haz not yet provrn economic viability.' .a • Bast fibers tend to have high production costs becaux they arc only a small portion of the plant stem and must be xpara[ed from the rat of the stem before they can be used in textile or paper production.' • The (bast) bark or long fiber portion of the hemp plant is about 1!! the weight of the staB4 and must be separated from the core before the mill will accept it for processing. The core (htrrd) is about ?!3 of the stalls and is of little use for pulp ar papa. Hemp pulp would rtes be considered for mass production grads in competition with wood' • Hemp pulp for paper is presently used only for cigareae paper, tea bags, and currency. It competes with flax, cotton, and used rags for this market.' • Existing mills are not equipped to handle the whole stalk. Major capital invatrnrnt would be necessary to convert the machinery for hemp/marijuana Industry is not willing to risk money on a speculative or theoretical market.' • Hemp/marijuana is a very labor-intensive, annual crop.' • U.S. mills do not currently have the equipment to convert hemp fiber into yam. Also, production costs for hemp textiles appear to be high relative to other fibers.' • • The economics of industrial hemp is uncertain.' • Today there is only a very small market for hemp fiber in the U. S.: about 530,000 of hemp fiber and yam was imported from Europe and Asia in 1994.' • One hundred (100) million tons of wazte straw is available in the U.S. Millions of tons of sorghum, and com and other stalks are available thaz are not presently being utilized.' • Kenaf, like hemp, is a bast fiber plant Two varieties of kenaf grow well in norti[em clirrrata. It has bees extetrsively researched and is subsidized by the USDA to allow farmers to get slatted. Krnaf has none of the THC dmg liabilities of hemp/marijuana' • Using pulping machirres to process hemp/marijuana mixes the fiber lengths and would cause processing problems. The stow drainage of the pulp from the cote material would result in slow drainage of the paper machine, thus slowing the paper machine speed. This would render the use of the whole hemp stalk chemical pulp impractinl.' • Hemp/marijuana averages just over 3 tons per acre. Quotes of ]0 tons per acre are counting wet weight. (fen tons -wet weigh[ - would be 2.4 tons without moisture.' • Tn 1991, Mexico dissolved the hemp subsidy to the Yucatan because, `bo amount of subsidy could keep Yucatan hemp competitive." • "It is my opinion that, if legalized, hemp is unlikely to become mole than a minor agricultural commodity."' • • "Hemp produced for newsprint, fiberboard or other erode fiber uses would be marketed only at rather low prices. At best, such fiber farming would be no more profitable that production of common grain crops."' • All European hemp crops ate subsidized up to 51,24'I per hectare (2.4 acres).' • Although hemp waz grown in the U.S. from Colot[ial times, by 1930 tirere were fewer than 200 acres of hemp under cultivation m the U.S. because American farmers and U.S. manufacmters of hemp products (tope, sacks, etcJ could not compete with hemp fibers from the Philippines and Mexico. The invention of plastic decreazed the need for hemp products.' • Cur[errtiy there are two markets for bast fibers like industrial hemp: specialty textiles and paper. Like linen, hemp fiber for textiles is a niche market Cotton still accounts for 98% of the natural cellulose fibers used for textiles.' • It currently costs about S15/square meter (of urdmown fabric weight) m make high quality hemp fabric while the finest linen textile costs 57.50/square meter. This suggests thaz industrial hemp haz significant competition in the specialty textile market from other natural fibers such az flax.' • The specialty ad recycled paper market is a second possibility for industrial hemp and othu agricultural bazt fibers.' • A 3rd potential market, that of fiber/rain composites, is still largely in the development and early commercialization stage. to combination with various resins -flax. kenaf, jute, hemp, and even wheaz straw can be used to make compost board. These could compete with wood-based fiberboard on the basis of easier processing and superior strcng[h.' • For hemp, crop and fiber yields would have to be increased to bring costs down. Research would be needed [o develop modem hemp fiber harvesting and processing methods.' • Hemp fibers are generally quite labor intensive in the harvesting and processing state. Hemp fiber is now produced in China, Hungary, Rumania, and Spain where labor costs are low.' • Uses for co-products would have to be explored under American processing conditions.' • While production, Processing, and marketing methods arc well developed for cotton, wool, and synthetic fibers, significant investmert would be needed to make industrial hemp competitive in the textile, papu, and wmposite markets.' • • • The estimated rcmm per acre for industrial hemp ranges froth negative to positive (from -5200 pu acre ro +5450 per acre). Industrial hemp...profitabiGryrompared with other crops is highly uncertain, given available informatiao.' • ~a • "In my judgement the environmental benefits of substituting hemp fiber for tree fibu have been widely misrepresented. The net environmental impact could, in fact, be slightly negative."' ~ • • i • I • There are two types of marijuana (cannabis saliva), drug type and fiber type. The fiber type is the low THC type (0.1 - .6%; maybe up ro 1.0%). The drug type would be rho 1.0% and up.' • THC content is calculated by percrnt of THC by dry weight' • A person cannot tell the difference (visually) between fiber type and dmg type marijuana plants.' • The main factor in affecting THC content of plants would be the geneda of the seed stock.' • Special harvesting techniques could alter THC content such az focusing on the buds. The THC of the fiber type could be increased by selecting mainly buds excluding large leaves.10 • Fiber hemp with a THC content of 0.1 to 0.3% dry weight would have significant potential for any narcotic applications.10 • Select plant components such az 'buds" would have a higher THC than fiber hemp material with a THC contrnt of 0.1 to 0.3%THC. This could be several folds higher.10 • It would be feasible to extract THC from fiber hemp without sophisticated laborazory facilities, such az by alcohol extraction and evapomtion.10 • No threshold THC concentration has bern detemuned below which Cannabis would have no significant psychoactive properties. ).ow potency material of 0.25% could prodttce psychological effects to a naivefutexperienad person and nothing in a habitual usu.'a io • Marijuana health harards due to smoke itself differ between low THC to high THC but trot significantly. Although lowu percent marijuana haz less THC it has more of other cannabinoids (of which there arc at least 61).' • For many years the THC content of marijuana waz approximately at the same low level (az that for commercial hemp). It was the ill effect of this low-THC marijuana which waz the reason for outlawing the cultivation of hemp." • Even with low-THC marijuana high concentrations of THC may be produced inside some organs when it is used frequently because "hemp/marijuana is soluble in fat rather than in water" • Dr. Charles Ksir of the University of Wyoming points out that the marijuana sold on the struts in the 19ti0's and 1970's contained the proposed allowabk THC level for "comtttercial hemp". Dro¢s. Society and Human Behavior by Oakley Ray and Charles Ksir, fourth edition, Times Mirror/Moseby pub., 1987, p. 301. was foomoted.'r ' A follow-up study of respiraWry [unction in hemp workers demonstrated that wodc in Qle hemp industry, particularly in small poorly regulated milk, continues to have dekterious effects on respiratory functions (from a study of 38 women and 28 men textile workers employed in a soft hemp processing mill.).'' • • Canada: • license can be granted for research purposes but the crop must not be sold. The seeds cmno[ be included. Those who had hemp licenses in 1995 had to give their hemp away." • The normal sizes of plots for hemp cultivation are 10 to 20 sera." • One researcher in Canada had his crop invaded by Bertha Army Worms. The damage done was enough to discourage him from any further involvement." • The Canadian government presently haz no definitive market research concerning the demand for hemp. Canadian researchers are still trying to determine if there is a market for hemp.'' ~rar.g h _ MINNESOTA M AlTiliue Of I)sui Watch In[emat[orul FOOTNOTES ~ US. Dept Of Apiadaw, Omx d Faap~, A Summery of Nfarroerim m me "Kmtudcy Govwa's Hoop ad Rtlsmd Rho Corps Task Faw Report" (5 pate). Sem Fdnury 22. 1996 m BeveAy Kinrd. DRUG WA7CH Cobrdo. ' Memo Kara: Canty ShaiRs d Calwado. RE Score Ba 96-067 - m: Seo~tr lacy, mirrna4 Seo[e Appsapiadaos ad a0 ahr Searm a the Apprapriadaas Comrtiaee. February 27. 1996. ' (avrt fsuro: Joseph E Mchiwn. Ph.D.. President lorph E Archism Caemtram, lee. - m: Sea McNulty. Kmordry Governor's Hwp ad RdrN libr Corps Trk Fan. Aupw I/, 1993 ' leaer Oam: Jaaph E Arahuon. Ph.D.. Pasidm.laeph E Autism n.,e.r,,,,. lac, • m: Mr. Tan Pall, Special A{em. DFA Startle was6iopao, Sepwober 9. 1993. ' PaMdt Gimard. SurainWie Fumioi, Fai 1991. pi.16. • AMOnY DtAime, b • Warta d PWdu, Yneran Sedo a Plea. Nnr Yak Ton Aupw 26. 1993. p2. AI. Lena horn: Prorusor M. Scaa Smk4 PhD.. Uavadty d Kenordry CoOete d Apimhsoe. Ayaoaoy - m: B<vedy Kinard, DRUG WATCH Cobrado. FeNury 20. 1993. pi. 210. • Hapldm.lF.. A His[ay d hoop itlu0y io KKmoorrty. tsaie{raa: Uaiwsky d Kmdy Piro, 1931. • Ietr ftwo: C3vb PMdm, minor, ladmP F®Se o Acooo. Saraia Oaaio • rx Dc Mahmad E1aNy. Uorwsity d M RremrU Momae d Phamamrid Sdmaa. Mreh 29. 1991. leoet dwply horn Kars fovea. A6oioimadve CaoNieser, NIDA Madjuaoa lsrojut. April 25, 1991 • esc CLrb PeA®s. "!coat form: Dr. M. Sma Sroi04 Profarar ad may d Apmomy. Univrsiy dKemr3y - m: NmA Mrijuoo Rojat Umvrsiry d Mississippi, May 19. 1993. Itaer d reply 6m : Mahmad A. E]Sahly, PhD.. Project Duec[a. 61mA Madjurr Pmjat Umwsvy d Mississippi 1995 - m: Dr. M. Sinn Smki " Isrr 6wn: KF. Gemini. MA Presiders. lJOddiilt Camim Dori Pretvre. Drich Nadoad Boord d Dori Preveaaaa. Ramdro. Mq 10. 1991- m: Mr. Sandy Birth. Clerk. Camtimee Ssudyiei Bib C07, Om~ Oetocio, Caeeda ° I<eQ hao: PNtip W. P1mry. Specid Atest a mrar, US. Dept Of ludw, Droi Fsfaament Adntinistvar. Rocky Mamtm Divi:ia0. PoMany 16. 1993 • m: the Hmaabk Dm Amear,.Cheirmeo. AQicviaw. Ndmd Rmrtm aed ~ Cannot- Smre, Smte d Cahndo. Zusti4 E. Mumjbetovie, l., 5 Ql. PWimr+m mdv d rearrrYaY heerim in bent vrwkers. Huhh Reapaubiliry 3YSrcm, hre.. Ardcb m: 91334193. "Liner has mmlw Pertinf, Chainm, Bard d Dirmors, IJrobme Frnilias m Action. Sarnia Onmri0. Camda - m: Bevery Kinard. DRUG WATCN Cdwado, March 11, 1996. ° Ierer hwo: Chrks Perldos. Cheirmae, Board d Direcmn. larrhroe rsmtlia ie Acorn. Sarnia. Owrm, Cando - m: Scores F]ir lacry. Site d Cokndo, March 1. 1996. "Isaa form: Diane Madeat Mimosa dNauard Heakh and WeUra Canada • b: mrlw Peridm. Chauman• lambtm Frriliu is Acam (a Drui FArrouoe, Inc.. Sarnia Orrin Caada July 10, 1993. FBp Thou Matarioe. Ask FQ FA RareathLL March 1993. pi. 79. [iii I~Ioo2 ~~~~~~~~~~'~a~~ J po R.Ogs s~~~~1 a ~ e d-~• e Q e4~~3~3 ~~@,~~ ~~vs ~~$B Q~~ A,~~6 s gg $R ~ ~ ~ 5Q ~ ~ B ~~~a ~~o~ gag'~% ~ ~ ° 1 ~ W w~.a ~ ~~.Q r= 8 v .a~~~~~~~~ ~ ~S ~ n ~ ~ ~ ~ ~ ~ u ~Pii O. a n ~~~~~~~~§~g~~~~sg ~ a3 Q$em~~yC~~~ eaop~o~'7~ ~ rc~ x1 F' ~i a T ~s. s gg' ~ s ~e~~~ ~gg a Q ~~~~a~ ~~~~~a ~ ~R ~ ~ t ~z ~6 ~S• INDUSTRIAL HEMP: GLOBAL MARKETS AND PRICES Valerie I.. Vautteese January 1997 1~~g19~2/~ - ^~6 ~ ~g 1991 ~ rpFCEtJ~EM ~ EY p~ctON ~ti Ms. Vantreese is an economist with the Department of Agricultural Economics, College of Agriculture, University of Kentucky. She can be reached at Valerie L. Vantreese 406 Agricultural Engineering Building Department of Agricultural Economics University of Kentucky Lexington, KY 40546-0276 (606) 257-7272 Ext. 259 vvantree@ca.uky.edu w~U~~. INDUSTRIAL HEMP: GLOBAL MARKETS AND PRICES Valerie L. Vaatreese I. INTRODUCTION There continues to be considerable discussion regarding the viability of industrial hemp as a supplemental production alternative. Many assume that both the economic (lack of sustained profitability) and the political environment will effectively fitrstrate renewed hemp production in the US. Others believe that the industrial hemp indusry can be revitalized in the US. Alternative crop enterprises must be thoroughly evaluated. Although industrial hemp production is illegal in the US, the world market can provide useful insights into the direction this market is moving. However, both misinformation and lack of information persists regarding hemp. It is not the author's intent to project normative comments, but to provide factual market intelligence. II. EXECUTIVE SUMMARY Industrial grade hemp can be produced without the psychoactive properties of marijuana. Agronomically, hemp can easily be grown around the world and competitive advantage may depend more on local processing capacity. Although hemp possesses some superior qualities for fiber and oil uses, processing remains relatively expensive as compared to other alternatives. Industrial hemp production has remained legal throughout most of the world and the private sector has been free to invest in production research and processing facilities. Nonetheless, the world industrial hemp market continues to contract and is dominated by many low-cost producers. Hemp fiber production is only one-fourth the volume of the early 1960s (India, China and the Fortner Soviet Union produce about 70% of world supply) and hempseed production has fallen by half during this time period (China alone produces 70% of world supply). Although the hemp industry is subsidized in the European Union, production there remains negligible. Similarly, world hemp fiber exports have fallen from more than $14 mil in the early 1960s to currently less than $5 mil. In 1995, the US imported $697,000 of hemp and hemp products. Of that amount, nearly all ($669,000) was value-added hemp goods (woven fabrics and yarn). The political environment remains mixed in the US. Only Vermont and the Navajo Indian Reservation have legalized the cultivation of industrial hemp for experimental purposes. Nationally, American Farm Bureau has endorsed further hemp research, while the Drug Enforcement Agency remains adamantly opposed to industrial hemp production World prices are highly variable and might not provide a realistic picture if production was legalized in the United States, given the sensitivity of prices to changes in production levels. While current projected break-even prices for hemp fiber and seed production appear to lie below world prices, the US possesses a small domestic market and no hemp processing industry. Thus, US farmers would compete, at least initially, with low-cost producers and subsidized production from the EU, in supplying raw product to the world market 1 Table of Contents I. Introduction ................................................................................................Pagc 1 II. Executive Summary ..................................................................................Page 1 III. List of Figures ..........................................................................................Page 3 N. Industrial Hemp .......................................................................................Page 4 a Definition b. Varietal Issues c. Cultivation V. Processing .................................................................................................Page 6 a Fiber b. Hurds c. Seeds and Oil d. Constraints to Processing VI. World Situation .......................................................................................Page 8 a World Production b. World Trade c. US Imports VII. Political Environment ...........................................................................Page 16 a. International b. United States 1. State Efforts 2. USDA Wbite Paper 3. American Farm Bureau 4. Drug Enforcement Agency c. Kentucky 1. Governor's Task Force on Hemp and Related Fibers 2. Kentucky Attitudinal Survey 3. Lexington Herald-Leader 4. Louisville Courier-Journal 5. First Annual Industrial Hemp Conference VIII. Costs of Production and Price Data ......................................................Page 20 a Production Cost Estimates b. World Prices c. Profitability of Hemp Versus Other Crops IX. Conclusions .............................................................................................Page 30 2 III. List of Figures Page World Hemp Fibre and Tow Yield (select years; 1970-95) 5 Worid Market Share: Hemp Fibre and Tow Production (1996) 8 Worid Hemp Fibre and Tow Production (1961-96) 8 World Hempseed Production (1961-96) 10 World Market Share: Hempseed Production (1996) ]0 World Hemp Fibre and Tow Major Exporters (1995) 11 World Hemp Fibre and Tow Exports (1961-95) 11 World Hemp Fibre and Tow Major Importers (1995) 12 World Hemp Seed Exports (1961-95) 12 World Hemp Seed Major Exporters (1995) 13 World Hemp Seed Major Importers (1995) 13 Woven Fabrics of Other Vegetable Fibers (True Hemp): 1995 US Import Market Share 14 True Hemp, Raw or Processed But Not Spun: US Imports 1993-96e 15 Yams of Other Vegetable Textile Fibers (True Hemp): US Imports 1993-96e 15 Price Required for Farm Gate Break-Even: Hemp Fiber 21 Price Required for Farm Gate Break-Even: Hemp Seed 21 Break-Even Price for Stalk When Growing Seed and Fiber 22 Average Hemp Fibre and Tow Export Prices for Major World Suppliers (1995) 23 World Hemp Fibre and Tow Export Prices (1981-95) 24 Average Hemp Seed Export Prices for Major World Suppliers (1995) 25 World Hemp Seed Export Prices (1981-95) 25 Estimated Hemp Prices and Revenue from Various Sources 26 Expected Profitability of Hemp for Seed and Stalk vs. Other Crops 29 Estimates of Net Returns per Acre for Kentucky Crops 30 Authors Note: All world production and trade data presented in this paper was gathered from the Food and Agriculture Organization of the United Nations. Trade statistics for fire US were gathered from the US Bureau of Census. Both sources should be acknowledged. 3 N. INDUSTRIAL HEMP DeSnition Cannabis saliva 1. includes both industrial hemp and marijuana. Cannabis is a bast or long fiber plant containing variable concentrations of tetrahydracannibol ('THC), the psychoactive ingredient. Industrial hemp is a term which commonly refers to cannabis grown for fiber. Most cultivated hemp is reported to contain less than I% THC. Cannabis produced for drug use is most commonly termed marijuana. Since 1980, THC levels of confiscated marijuana in the US have averaged between 3~%; other sources claim marijuana has an average potency of S-IS% THC. The concentration of THC in cannabis is dependent on both environmental and genetic factors. Fields of cannabis grown for hemp fiber are easily distinguished from those grown for marijuana because of plant spacing. Industrial hemp is planted extremely closely to encourage fiber production and discourage leaf production. Conversely, hemp grown for seed is planted further apart. Yet, individual seeds or plants of hemp are difficult to distinguish from marijuana. While industrial hemp would have little or no value as a psychoactive product, sources disagree about the possible impacts of hemp cultivation on law enforcement efforts to control marijuana. Varietal Issues Most developed countries that permit industrial hemp cultivation limit production to those varieties with less than 0.3% THC. Industrial hemp growers in the European Union use only EU- registered varieties, most of which are owned by a French Cooperative and aU containing less than 0.3% THC (consistent with EU regulation). Some have suggested that that limit be increased to less than 1 % THC (still well-below the narcotic level) to take advantage of the Chinese and Eastern European varieties available and their genetic properties. Conversely, the French have recently advocated lowering the limit to 0% THC (amidst assertions that the French have made firrther breakthroughs in sped genetics that might appease hemp opponents and allow the French to firrther comer the certified hempsced market). Ongoing varietal research is also conducted by the Iatematioaal Hemp Association. The IHA (based in Amsterdam, Holland) and the Vavilov Research Institute (St Petersburg, Russia) have preserved nearly 400 types of cannabis sends. This cooperative project supports continued hemp production to provide seed for long-term storage and for research distribution. Other collaborators include Ukraine and Italy. The VIR/IHA Cannabis Germphism Preservation project is seeking additional finding to maintain an active collection. While there are many varieties of hemp with very low THC concentration levels, there is some evidence that those varieties with higher THC concentrations could have agricultural benefits over the Tower THC varieties. This is particularly true for those varieties grown for their oil. This was confirmed by the Centre for Plant Breeding and Reproductions Research, though they agreed that "hemp can be a usefirl crop even if it is legally constrained to varieties low in THC". The United States (USDA) has abandoned all hempseed stock collections. 4 Cultivation Industrial hemp has the capacity to grow in a multitude of different climates, altitudes, soils and weather conditions. Kentucky does not appear to have any unique advantage in growing hemp, despite our history of production. Hemp is sown during April or May and typically planted densely in rows (at least 150 plants per square meter to maximize fiber production and about one-fifth that density if grown for seed production). Drilling is recommended for unifomvty, using a standard grain drill or a modified alfalfa seeder. It is also recommended that the ground be non-compacted and well-drained, using only light cultivation. Small amounts of herbicides may be required, although pesticide use would probably not be necessary, and nitrogen fertilizer should be applied in the spring, with similar application rates to that of com Very little else is required until harvest (with the exception of irrigation if precipitation is less than 200mm over the course of the growing period). Most fiber varieties reach 10 to 12 fcet tall in 3 to 4 months time (with a full range of 6-16 feet}, with very tittle foliage produced. In late summer the plants are harvested and the foliage is returned to the soil. Over the last 35 years, hemp fiber and tow yields have slowly increased from about 5500 hg/ha in the 1960s to 7800 hg/ha in 1996 (or, from 491 pounds per acre to 696 pounds per acre). (Tow refers to the short broken fibers used for yarn, twine and stuffing.) As expected, some yield variability exists across countries: over the last five years hemp fiber and tow yields have averaged 1,1031bs/ac in China; Russian Federation 7881bs/ac; France 570 lbs/ac; and India 5321bs/ac. Yields are lower in France since most French production is for the seedstock industry. World Hemp Fibre and Tow Yield n,«,sands ro e B - ~ - ~ 4 _ _ - _ Z _ _ _ _ _ 0 70 75 !0 05 BO Y5 These minimal planting requirements suggest that from an agronomic perspective hemp could be widely grown in many countries. Consequently, competitive advantage may depend more on local processing capacity, due to the bulkiness of the raw commodity. As one farmer said, "harvesting is when the problems start° and initial estimates of harvesting and processing costs are frequently only one-fourth of actual costs. Harvesting can be done with 5 existing baling machinery, but can be very rough on equipment because it easily wraps azound the cylinder since most machinery is not customized to harvesting hemp. Harvesting hemp can also produce large amounts of dust and workers should wear protection such as facial masks. Baled, industrial hemp can be left in the field for long periods of time, depending on the end-use. V. PROCESSING Industrial hemp is grown for its fiber (outer bark), hurls {woody inner core of the stalk) and seeds (primarily for oil). The fiber length and cellulose and lignin content are key quality parameters. Fiber Hemp stalk averages around 20-30% bast fiber (the strong woody fiber obtained chiefly from the phloem of plants). The basic markets for bast fibers include specialty textiles, papers (including specialty and recycled papers) and cordage (such as rope}. Specialty papers include teabag paper, cigarette paper, carbon tissues and condensing tissues. However, bast fibers are only a small part of the plant stem and separation tends to lead to high production costs. This is somewhat offset by the inherent superior strength of hemp fiber. In recent years, several European countries, such as the Netherlands and Germany, have conducted research on industrial hemp as a possible fiber for textile and,paper production. Dutch research suggests that industrial hemp is not competitive in the specialty paper market, but may be used as a fiber supplement to recycled paper pulp. The growing market for recycled pulp and paper (due to rising wood prices and regulatory practices) may increase the demand for agricultural fibers to strengthen recycled paper. Small pulp mills for processing flax, hemp and other specialty fibers have arisen in Britain, Spain and Eastern Europe. Purportedly, no US mills have the capability to convert hemp fiber into yam and production costs are quite high (around SIS/square meter according to one New Jersey importer). Significant competition exists in the specialty textile market (for example, from linen and flax) and cotton, which accounts for 98% of the natural cellulose textile fiber market. Although hemp clothing has surged in popularity, specialty fiber markets tend to be cyclical. Another market for bast fibers, fiber resin composites, is used to make composite board. Again, industrial hemp fibers are desirable, dire to their length and strength, and research continues in this area. Despite optimism for future uses of hemp fiber, increased competition from synthetic fibers has reduced the use of hemp fiber by the textile industry. It has also been shown that kenaf has many economic advantages over hemp as non-wood fiber for the paper industry. Further, special grades of paper are limited to less than 5% of the nom~ral demand of other major grades of paper, such as newsprint. 6 Hurls Approximately 70-80% of the stalls is composed of hurls or the woody inner portion. Essentially, hurls are the by-products of extracting the bast fibers from the stalk. Hurls are 50. 70% cellulose, lending itself to paper, particle board, biodegradable plastics, and animal bedding (most of the hemp grown in the United Kingdom is for the horse industry) uses. Seeds and Oil Similar to soybeans, pressed hemp seeds are comprised of seed oil and seed cake (or meal). The seed is approximately 30-35% oil by weight and can be used for: food (the oil is over 70% polyunsaturated or cholesterol-fighting essential fatty acids and contains all 8 essential amino acids}; fuel (mixed with 15% methanol for fue170% cleaner than petroleum diesel}; and paints and varnishes. The seed cake contains 25% protein and can be used as a supplement to wheat flour. The whole seeds can be eaten (20% high-quality digestible complete protein) by humans and used for bird seed. However, due to the high content of polyunsaturated oils, hemp seed oil is fairly unstable and becomes rancid rather quickly unless preserved. Despite the quality of hempseed oil, average oil yields (kg/ha) are tower than for any other major oilseed crop, with the exception of cottonseed (which is a dual purpose crop in that the seed is almost a by-product). A group of German researchers has also developed a laundry detergent and an industrial cleaner produced from hemp oil and yeast. Various sources have reported 20.25,000 different uses for industrial hemp fiber, oil and seeds. Not to be deprecating, figures such as these can be easily exaggerated or matched by other products (for example, corn). Constraints to Processing Industrial hemp fibers cannot be easily separated into fibers of consistent quality without specialized machinery. Pulping hemp fibers can use either traditional mechanical or chemical pulping techniques or a combination of both. The latest Dutch research shows that a chemi- mechanical P~P~B P~~ ~Y Prove to be the most cost-effective for hemp pulp. The Germans have introduced other innovative methods of fiber separation using steam explosion and ultrasonic waves. According to the Dutch Institute for Agrotechnolgical Endeavors, the average hemp pulp and paper mill produces about 5,000 tons per year, compared to a minimum of 250,000 tons for a wood fiber pulp mill. There is some evidence that the higher fixed costs of the hemp mill necessitates higher prices received for hemp paper products, such as specialty papers (including cigarette paper, coffee filters, and insulating and grease proof papers). 7 VI. WORLD SITiJATTON World Production In 1996, world hemp fiber production was about 103,400 metric tons, with India, China, Russia and Korea as the lead producers (none of these countries has ever made industrial hemp cultivation illegal). These four countries produce more than four-fifths of total world supply. China, Russia, Ukraine, Romania and the European Union all subsidize hemp production. Although more publicity has been given to revitalized hemp production in the European Union and Canada, these countries remain negligible producers. Notably, world hemp production has been on the decline, falling from over 400,000 metric tons in the early 1960's to one-fourth that level today. Although some have argued that there has been a resurgence in interest in industriai hemp (due to the growing world demand for natural fibers, the drop in flax prices and the adoption of more advanced cultivation and processing techniques) production statistics do not bear that out as of yet. World Market Share: Hemp Fibre and Tow Production (1996) kWia 36-996 -Other 7.0% Turkey 2-996 rants 3.796 China 19.4 Chile 3.9% \Koraa l7P 11.69(0 Russian Fed 14.696 - World Hemp Fibre and Tow Production Thousands soo 400 - aoo - - 200 too - - - 0 a16s 7o rs 76 n 7e 79 eo e1 e2 tp e4 es es a7 ea e99o 919z 9s 9~ 9s+ae 8 The European Union subsidizes the cultivation of renewable crops (such as hemp and kenaf) primarily for research purposes. Industrial hemp production has been subsidized in the European Union since at least 1988 and is cultivated on over 24,000 acres in France, Spain, Austria, the Netherlands and England. Hemp production has been legally grown in France without interruption. Although the European Union offers subsidies to growers, not all EU countries participate due to individual country growing restrictions. The subsidy is equivalent to about US$100 per ton or about US$1,022 per ha ($414 per acre). Currently, French hemp fiber sells for about US$200 per ton, including the subsidy. Growers must obtain permits and crops are subject to inspection and, as noted previously, the THC content of hemp grown in the European Union cannot exceed 0.3%. Although it is uncertain whether these subsidies will end anytime soon, the subsidies do keep hemp prices artificially high in the EU. Since 1982, all cultivation of hemp had been outlawed in West Germany, with the exception of the use of hemp as a pollen insulator is the commercial breeding of beets (supposedly no other plant provides such an impermeable barrier to outside pollination). However, due to significant pressure from farmers, Germany lifted the ban on growing low-THC hemp in late 1995. A large hemp contractor in the United Kingdom also receives a government grant as part of an effort to stimulate rural labor employment. Hemcore, a large private company in Britain, has contracted for 1600 hectares (their fourth crop) last year. Switzerland also pemrits hemp cultivation with some restrictions. In addition to the production subsidies given to European Union producers, the Romanian government also subsidies SO% of the cost of hemp planting seeds. US private investment already exists in the Hungarian hemp processing industry. In Poland, approximately 3000 ha of industrial hemp is being grown commercially, with another 2500 ha planned for cellulose production. Current research has shown the advantages that hemp has in reclaiming soil that has been contaminated with heavy metals. Industrial hemp does not appear to be affected under such growing conditions. Hemp production in the Ukraine has fallen by over iS0,000 ha since the 19S0's and was about 4000 ha in 1994. The Institute of Bast Crops has been researching hemp genetics and agronomics for over 60 years and currently maintains about 300 varieties. Although hemp production remains illegal in Australia, field trials did begin last year under strict licensing requiremerts. Similar conditions exist in South Wales and Tasmania. Interestingly, opium poppies are cultivated in Tasmania, so the infiastructrrte already exists to monitor the production of governmentally regulated crops (essentially paving the way for industrial hemp production). in 1994 Canada produced it's first hemp crop after 50 years of prohibition. Industrial hemp (again, less than 0.3% THC content} can be grown in Canada, under licence from the Minister of Health and only for research purposes. In addition to providing a detailed research plea, no parts 9 of the plants can be sold and monitoring expenses must be paid by the fanners. In 1995, seven groups were granted licenses, including joint efforts between private industry, academia and the government. Historically, US hemp production virtually stopped at the end of the 19th century due to foreign competition (particulazly from Manila hemp, which is not cannabis) and the demise of sailing ships (which utilized hemp for rope and sailcloth). Perhaps the final death knell for US hemp production was the 1937 Marijuana Tax Act which levied a transfer tax of $].00 per ounce on all hemp transactions. Production restrictions were cased during World War II after supplies of Manila hemp from the Phillippines were cut-off. Production languished until the 1950s, when once again hemp production was outlawed. Currently, it is illegal to produce any variety of. cannabis saliva 1. except under certain permitted scientific conditions (discussed later). World hempseed production has fallen by half since the early 1960s and appears to have stabilized at azound 36,000 metric tons per year. Part of this production is for oil and part for seedstock. China was responsible for the production surge in the late 1980s and has dominated this market for years, with over 70% world mazket share. France (which dominates low-THC seedstock production) and Pakistan are also significant producers. World Hempseed Production ThoueanOs ~zD goo 60 _ - - - ~o za - 0 61 65 70 75 76 77 76 79 80 81 82 Q:i M 85 86 87 88 89 90 B1 B2 93 W 95 96 World Market Share: Hempseed Production (1996) Chine 70.5% OOrcr 3bX 2.8% 3.1% ek4ten 9.3% ~Fnrnoe 10.8% 10 World Trade The principal suppliers of hemp to the world include China (where hemp cultivation has never been illegal and tabor costs are low for both harvesting and processing) and Europe (primarily Switzerland, Belgium-Luxembourg, Romania and Germany). Similar to production trends, world hemp exports have declined over the years, falling from over US$14 mil in the early 1960s to slightly less than US$S mil in 1995 (after accounting for inflation, a very large drop in real terms}. However, the last three years have demonstrated some export growth potential. Surprisingly, the US exported about $449,000 of hemp fibre and tow in 1995 (mostly to Japan, India, Honduras, and EI Salvador). Processed, but not spun, hemp exports to Japan accounted for $250,000 of total US exports last year and thus far is an anomaly. This compares with only $156,000 in total US hemp exports to the world in 1994. Given that industrial hemp production is essentially banned in the US, this must be re-exports. World Hemp Fibre and Tow Major Exporters (1995) (51.000) SwAZedand 17.0°k China 18.3% (5820) (5881) Other 12.096 (5581) Be!-Lac 15.2% (5733) a PolarW 3.6% (5176) . USA 9.3% Romanis 13.0% (5449) Germany 11.696 (5560) World Hemp Fibre and Tow Exports Million USS 18 16 - _ 14 - _ _ 8 - - _ - - 8 4 2 0 a+azaaeswowaronnni°nnnn»wnaw~aaswowwwa~uaaw 11 On the import side, major world buyers include the United Kingdom, Germany, Italy and Belgium-Luxembourg. Given the growth in the hemp processing industry, the members of the EU (with a 70% world import market sharz), appear to be importing taw hemp from Eastern Europe and the FSU for further processing in western Europe. (Note: Unlike exports, import statistics are measun-d using CIF (cost of the goods, insurance and freight) values of the product when it arrives at the port of entry. Thus, transportation costs can be a sigrtificant portion of import values, particularly for bulky products.) World Hemp Fibre and Tow Major Importers {1995) ($1,000) Germany 11.9% (E1041) UK 26.0% ($2279) Rely 11.1% (x972) Bel-lux 7.9% r". (5689) - Hungary 7.7% (5672) OCrer 30.7% Spain 4.8% (5417) The world hempseed market has been somewhat volatile over the last ten years, particularly in the late 1980s as world exports surged in quantity and (to a lesser extent) value. Significantly, as world production swelled in 1986 (again, due to production in China), export volume increased and prices per metric ton fell dramatically. As world export prices dropped from about 56 cents/kg to 34 cents/kg, it wasn't until 1989 that production fell significantly (assumedly in response to lower world prices), followed by a fall in world exports in 1992 (as can be seen below}. World Hemp Seed Exports 25 MII USS ThouWW MT ZD ~ 15 13 10 10 5 S 0 0 NggMtlqQ r~A1~T111H)f l~tl l~I~OggOM gY~IMgqh ggMM t~1 12 In 1995, world hempseed exports totaled 6,594 metric tons. This compares with over 43 million metric tons of total oilseed trade last year, which is dominated by soybean, palm, rape and sunflower seed. Major world hempseed exporters include the European Union (in particular the Netherlands, with a 50% market share, France, Belgium-Luxembourg and Austria) and Chile. As noted earlier, France is the primary supplier of low-THC industrial hempseed varieties to the world market. Importers also include the European Union (again, the Netherlands with dominant market share). While hemp production in the Netherlands is negligible, the Dutch have long been renowned for their role in global trade and logistics management, thus their dominant position in hempseed trade. World Hemp Seed Major Exporters (1995) ($1,000) Netlurlands (53321) 50.4% {5104) 1.6% rry (5149) 23% (5182) 2.5% Austria (5602) 9.1% France (51233) 18.7% BeELrac (51023) 15.5% World Hemp Seed Major Importers (1995) (sl,ooo> Nethatlands 31.1% _ (54802) Other 17.1% (52643) L~el-Lrnc 13.6 (52110) Sweden 5.1% Spain 8.1% (5793) ,`~gpY 5.2% (51251)UK 6.8% 6.8%JaPan 8.~ oY (51053) (57019) (5985) 13 US Imports It is legal to import industrial hemp into the United States. In general, US hemp imports have grown significantly in percentage terms over the last few years, but remain negligible in absolute value. In 1995, the US imported a total of $697,000 in hemp and hemp products, including woven fabrics made of hemp ($645,000); raw or processed hemp ($28,000); and yam ($24,000). {All US trade statistics are reported at customs value.) In 1993 and 1994, woven hemp imports were non-existent (or, the hemp content was minimal)• Importantly, the world UN/FAO data previously discussed does not included woven fabrics; but instead focuses on raw and semi- processed fiber and seed. For this discussion, we will also examine US hemp fabric imports. For the first 10 months of 1996, total hemp and hemp product imports were up by 215% in value, reaching approximately $1.3 mil last year. Almost three-fourths of all US imported hemp fabric in 1996 came from China, with Romania and Hungary also important suppliers. Many woven hemp products imported into the US (such as hats, clothing and shoos) are actually a blend of many fibers including flax, cotton and linen. The recent increase in woven hemp imports reflects a current fad by US (particularly young) consumers. Although US hemp fabric imports have grown significantly larger in percentage terms, they are still very small in absolute value. Woven Fabrics of Other Vegetable Textile Fibers: True Hemp 1995 US Import Market Share ($1,000) China (5428) 65.9% !Other (54) 0.6% Oland (525) 3.9% b (530) 4.6% EI Salvador (549) 7.B% Romania (557) 7.9% Hungary (562) 9.6% Total 7995 US Imports: 5645,000 China and the Philippines are the largest suppliers of raw or processed hemp (not spun) to the US, with over 80% of the market. Other players include Belgium, Switzerland and otlter parts of the European Union. Although US raw hemp imports are small they have grown significantly percentage-wise over the past few years. Preliminary 1996 statistics indicate raw hemp imports will reach approximately $65,000 in 1996, up from$28,000 in 1995. 14 True Hemp, Raw or Processed But Not Spun US Imports 1993-1996e Thousands S ~o _ ~OUiar ~ OPhilippines r~ Ogthla ~ ~ ~ ~ T 20 10 L/ ' 0 1993 1994 1985 1996e Annual US hemp yam imports have averaged $21,000 the last three years, with only $9,000 of imports reported through October 1996. Major suppliers include Poland, China, Hungary and parts of the European Union. M 1995, raw Hungarian hemp supplies may have been diverted to the EU for processing, before being re-exported to the US.) Yam of other Vegetable Textile Fibers: True Hemp: US Imports 1993-1996e TYlousarxls S 25 20 - - - - 10 - 5 0 1993 1994 1995 1998e Poland China Hungary Other Small amounts of hempseed and oil are imported into the US, but these amounts are lumped together with other minor seed sources and are not reported separately. 15 VII. POLITICAL ENVIRONMENT International International treaties signed by the US state that hemp with less than 0.3% THC shall be considered industrial hemp and not marijuana. However, current US !aw does not distinguish between industrial hemp and marijuana. Both NAFTA and GATT trade agreements recognize hemp as a `valid agricultural crop". United States State Efforts Four US state legislatures debated hemp bills last year, with Vermont the only state to enact law enabling industrial hemp to be grown for researoh purposes. Given that this year is a non- election year, some hemp proponents are optimistic for more success at the state level. Political activity regarding industrial hemp production in Kentucky will be discussed subsequently. Vermont has passed legislation in 19961egalizing the cultivation of industrial hemp for experimental purposes. After passing both the House (by a margin of 108 to 33) and the Senate, the Governor chose to ignore the bill and by default it passed into law. Supporters in Colorado have been some of the most vigorous in promoting ibeustrial hemp production. Hemp production has been endorsed by the Colorado Farm Bureau and the University of Colorado is exploring the possibility of industrial hemp production research. Several companies (such as International Paper, IViasonite and Inland Container Corporation) have expressed interest in hemp as an alternative Sber sotuce. The state also has an active grassroots support group, the Colorado Hemp Initiative Project (CO-HIP), which supports a web site with extensive hemp information. In the spring of 1996, the Industrial Hemp Production Act was introduced into the Colorado state legislature, which would allow for the regulated cultivation of industrial (low-THC) hemp by Colorado farmers. In 1996, production would be limited to 40 acres for agricultural, commercial and scientific research, with that amount increacittg in subsequent years. Despite wide-spread support, the legislation failed. After passing the Colorado Senate by a margin of 18 to 15, the bill failed in the House of Representatives after heavy lobbying by 12 state and federal police agencies including the Drug Enforcement Agency. The Navajo Indian Reservation worked with the Coalition for Hemp Awareness to coordinate the first planting of an industrial hemp crop on their reservation in northern Arizona. Last spring, a Justice of the Peace for the Arizona State Court of Appeals and the president of the Wide Ruins Community Chapter, planted 80 pounds of seeds on 2 hectares. Although current tribal law bans 16 THC, the nation's fiill tribal council met last July to ascertain whether tribal law should be modified to pemvt the cultivation of industrial hemp. This is a very interesting case in that Indian nations are semi-sovereign in the US. USDA White Pacer In 1995 the US Department of Agriculture released a 3.5 page white paper Industrial Hemp and Other Alternatives for Small~cale Tobacco Producers, jointly produced by the Agricultural Research Service and Economic Research Service for the Under Secretary for Research, Education and Economics. The paper acknowledges that there are few alternative crops that can provide high returns comparable to tobacco. The paper also notes that European research has not established the profitability of commercial industrial hemp production, but acknowledges that "few estimates are available for modem production and processing costs and the market potential is uncertain". The paper indicates several constraints to industrial hemp production in the US: • Crop and fiber yields must increase to bring down costs • Research is needed to develop modern hemp fiber harvesting and processing methods • Uses for co-products need to be found to make processing operations profitable • "Any effort to legalize hemp production for paper or specialty textiles could encounter stiff Congressional and Administration opposition." • All hemp production is strictly regulated and "DEA's interpretation of these matters discourages any attempt to conduct field trails at a reasonable cost...it would be virtually impossible to collect useful, realistic agronomic oc economic information about hemp production". • Unless economic viability is proven, "hemp fabrics and paper uses will likely remain a very small niche market which is satisfied by imports". (An interesting side note: In 1994, USDA permitted 16,000 hemp plants be grown for research purposes in southern California on USDA land. Four months later USDA rescinded and ordered the crop seized and be plowed under by California law enforcement officials.) American Fans Bureau In January 1996, at their annual convention, the American Farm Bureau »*+p~imously passed a resolution which read: "We recommend that American Farm Bureau Federation encourage research into the viability and economic potential of industrial hemp production in the United States. We finther recommend that such research includes planting test plots in the United States using modem agricultural techniques.^ 17 Industrial hemp production has also been endorsed by the Kentucky Farm Bureau and the Colorado Farm Bureau. It was thought by many hemp proponents that this endorsement would assist state efforts in legalizing research efforts and add credibility to the industrial hemp movement. It is not clear what, if any, impact these resolutions have had, thus far. Drue Enforcement A¢encv The DEA is adamantly opposed to industrial hemp production for the following reasons: • It is too difficult to distinguish "legitimate" industrial hemp from illicit cannabis with higher narcotic concentration. • It has been suggested that industrial hemp advocates have a hidden agenda of favoring the legalization of marijuana. Cannabis saliva 1. (including cannabis indica) is classified as a schedule 1. Controlled Substance (regardless of it's narcotic or THC content) and all hemp production in the US is strictly regulated (as vested in the Attorney General and carried out by DEA). Permits to grow cannabis are restricted to researchers and police analytical laboratories and permit holders must maintain strict security requirements (including complete fencing, 24hour guards, an alarm system and limited, controlled access) and detailed records concerning stored or cultivated cannabis. Kentucky Governor's Task Force on HemQand Related Fibers in 1994, then-Governor Brereton Jones appointed a task force to look into the viability of industrial hemp as a cash crop. The task fot+ce, comprised of government officials (including the Kentucky Department of Agriculture and the Drug Enforcement Agency), university representatives, Kentucky Farm Bureau and private farmers, disbanded after two meetings. Findings of the Task Force include: • Most analysts predict long-term growth in world demand for fibrous materials. • Although Kentucky has a history of hemp productioq this advantage has diminished. For hemp to become a large scale crop, significant research must be done in varietal selectioq crop management practices, harvesting technology and other agronomic aspects. • Significant investment is needed for research and development of harvesting and processing technology. • The current market for hemp is limited to specialty uses, although paper applications and use as building materials could create a "very large but relatively low value market. Crop prices above S60hon would probably be requited to interest most producers; this price might preclude extensive competition in this market" 18 • Legal issues remain the greatest obstacle to industrial hemp productioq both at the state and at the federal level. Further progress on agronomic research, infrastructure needs and marketing is moot until the legal issues ate resolved. The Final Repoli also included some price and profitability projections for hemp as compared with other crops. This information is included in a subsequent section of this report. Kentuckv Attitudinal Survev In Spring 1995, the Kentucky Hemp Growers Cooperative Associating Inc. contracted with the University of Kentucky Survey Research Center to conduct a survey of Kentucky residents' current opinions towards industrial hemp in general and their position regarding possible legislation to license Kentucky farmers to grow hemp as a cash crop. Over three-fourths (77%) of the respondents favored legislation to license Kentucky farmers to grow industrial hemp as a cash crop. In terms of a profile of those who support such legislating only three characteristics were statistically significant: 1) Those who understand the difference between industrial hemp and marijuana; 2) Those who feel positive about the condition of Kentucky's economy; and 3) Men slightly favored the suggested legislation over women (80% to 74%). Interestingly, other factors such as religious preference, educating race, income, and political identity were not statistically significant as to whether a respondent supported such legislation or not. The survey center also suggested that an educational program would be necessary to inform all citizens of the difference between industrial hemp and narcotic varieties, to support such legislation if it were actually proposed. A similar survey conducted in Vermont in May of 1996 by the Center for Rural Studies, University of Vermont, had very similar Endings. Of those surveyed, 77% of Vermonters support changing laws so that farmers can grow hemp. Lexington Herald-Leader The Lexington-Herald Leader has followed the hemp "debate" fitirly closely. In an editotal dated April 15, 1996, the LH-L encouraged Governor Patton "to resurrect the Hemp and Related Fibers Task Force, name members who have at least some vision of the future and open minds to new crop development, and ask them to report to him before the 1998 legislature convenes". Louisville Courier-Journal In an editorial dated July 11, 1996, The Louisville Courier-Journal editorial board nominated "researchers at the University of Kentucky's College of Agriculture to take logical steps that the task force should have suggested: Find varieties of hemp that would thrive here. Determine what the crop yield would be. Poll the fiber industry to see whether the companies would be willing to buy hemp. Gather hard statistics on the sale of hemp elsewhere in the world." 19 First Annual Industrial Hemp Conference The conference, aninvitation-only affair, was held in Lexington, KY on May 31, 1996 and attracted about 120 people, including hemp growers and processors from seven countries. Speakers addressed a variety of cultivation, processing and legal issues sunrounding industrial hemp. (The designation "First° has been debated.) Kentuckv Protwsed Le¢islation Kentucky State Senator Metcalf has proposed legislation that would require the University of Kentucky to conduct agronomic and marketing research into industrial hemp. This legislation has not gone to the House Agriculture committee as of yet. VIII. Costs of Production and Price Data Industrial hemp production must be profitable from an economic standpoint, regazdless of the political environment, to truly be a viable alternative crop. Hemp must compete with other agricultural crops and with other fiber and oil substitutes (such as wood, cotton, flax, and other seed oils). There exists some fairly good production cost data for other countries, but less than complete profit data. Given that tbe US lacks both adequate production test sites and a commercial processing market, other country's experiences become germaine. This leads to a certain degree of variability in both cost and profit estimates. It is reasonable to assert that production costs should be approximately similar across geographic regions (given the minimal agronomic conditions and chemical applications that are required). However, the lack of processing facilities and other infrasttucture necessary for a viable commercial hemp market in the US makes demand and profit projections extremely speculative. Factors such as the availability of government production and processing subsidies; the relative profitability of other production alternatives; the costs of transportation to processing centers; and legal constraints maybe more influential in determining production location advantage. US producers are at a disadvantage in each of these areas. Currently, hemp growers must compete with substantial production subsidies in the Eraopean Union (approximately half the value of the crop) and in parts of Eastern Europe. Labor costs for both harvesting and processing are significantly lower in many regions outside of the US. Harvested hemp is very bulky and minimirng transport distance between processing centers (at least fast stage) is advantageous. If growing licenses or permits are required, there may be additional costs associated with production and/or processing. Security and THC-testing costs must also be acknowledged. Hempseed crushing facilities and oil producing equipment are rare. Many have suggested that significant amounts of investment is required (for example, by some of the large paper companies) to upgrade the harvesting and processing technology to truly revitalize not only the US hemp market but the world market as well. Despite these caveats, production costs estimates and world price data are presented below as a starting point to evaluate the economic feasibility of producing industrial hemp in the US. 20 Production Cost Estimates Production cost estimates vary considerably depending on a complex array of factors: producing seed and/or fiber, seed cost; seed varietal selection and yield estimates; transportation costs and access to processing facilities; and licensing and/or security costs. A researcher in Canada has estimated break-even prices for industrial hemp fiber and seed production and the following section relies heavily on his work (D. Marcus). The choice of raising industrial hemp for seed and/or for fiber impacts seed varietal selection, planting density, and yield. Certified seed, the most expensive production cost item, imported into Canada costs about US$1971 pcr ton, of which roughly half is transportation costs from Europe (viable seeds are not currently available in Canada or the US and most certified seed containing 0.3%THC or less comes from France). It is reasonable to assume that this cost estimate would also apply to US producers. Further, since no varieties have bcen specifically adapted to North American production, yields may be slightly less than average, particularly during early years of commercial production. The following chart indicates break-even prices for hemp fiber production, covering all costs of production (fixed and variable). Price Required for Farm Gate Break Even: Hemp Fiber (whole stalk) (for various expected yields per acre) 2.5 t/ac 3 t/ac 3.5 t/ac 4 t/ac Seeding rate @55 kg/ha $78.28 /ton 565.23 /ton $55.91 hon $48.91 /ton Seeding rate @70 kg/lta $83.21 /ton $69.34 /ton 559.44 /ton $52.01 /ton Note: Prices are in US$ per ton and are break-even at the farm gate (thus, do not include any transportation costs). Melds estimates vary due to ranges in_dry mass yield per acre and bast fiber yield per ton. After a few years of cultivation experience and the development of seed varieties adapted for North America, yields may increase. Licensing fees and security costs such as fencing, additional recording keeping and THC-level testing fees are not included. Production cost estimates for industrial hempseed production were similarly calculated: Price Required for Farm Gate Break Even: Hemp Seed (US$/bu) (for various expected yields per acre) 14.3 bu/ac 19 bu/ac 23.8 bu/ac Sceding rate @15 kg/ha $12.21 /bu $9.19 /bu $7.35 /bu 21 Note: All prices are in US$ per bushel and are break-even at the farm gate (thus, do not include any transportation costs). Yields estimates vary due to ranges in seed yields as well as oil content. Jeyasingam reports average yields of 19.24 bu/ac. After a few years of cultivation experience and the development of seed varieties for North America, yields may increase. Licensing fees and security costs such as fencing, additional recording keeping and THC-level testing costs are not included. Break-even prices have also been calculated for the simultaneous production of both hempseed and fiber. Marcus asserts that this production choice is essential: "If hemp were grown only for seed OR whole stalk, it would likely generate negative returns even in best case scenarios." This is refuted by some agronomists who claim that varieties that are designed for optimal fiber production are not the same as those bred for their oil producing capacity and quality; production of both seed and fiber from the same plant results in inferior production of each. Consequently, economic and agronomic production decisions may not meet the same objectives. Assuming the following range of prices received for hempseed (using comparables from flaxseed and canola), break-even prices are given below for "?eRover" stalk assuming varying seed and stalk yields: Break-Even Price for Stack When Growing Seed and Fiber (LTS$/ton) Price/bushel Low/Low: Low/Med: Med/I.ow: Med/Med: (for hempseed) 14.3bul2.St 14.3bu/3.Ot 19bu/Z.St 19bu/3.Ot $3.67 $48.82/t $40.68/t $41.91h $34.93h $4.41 $44.62/t $37.18/t $36.32/t $30.27h $5.15 $40.41h $33.68/t $30.74/t $25.61h $5.88 $36.21h $30.17/t $25.15/t $20.96h Note: All prices are in USS per ton. Yields reflect bushels (seed) and tons (bast fiber). Given that the assumed market price for hempseed is below the break-even price noted in the table above, additional stalk revenue is required to reach the break~ven point. It may also be difficult to reach these yields given that the planting density for growing fiber (55-70 kg/ha) is significantly greater than the density needed for seed production (15 kg/ha). Also, differences in quality in both oil and fiber must be compensated for through price. Gordon Reichert, of the Market Analysis Division of Agriculture & Agri-Food Canada, also claims hempseed runs about CN$2,700/ton (US$1971/ton) and fertilizer costs are comparable to spring wheat ($35-40/ac, with generally no pesticides or herbicides required). He fiuther notes that half the cost of importing certified seed is transportation costs from Europe. The existence of a certified hempseed industry in North America would significantly alter this scenario. 2z Australian farmers estimate that it costs US5240/ton to grow and harvest hemp, including imgation and storage costs. The following section looks more closely at market prices, to follow the link to purported profitability. World Prices Several people have attempted to calculate the market price for various hemp products (such as bast fibers for textiles and paper, oils, biomass, building materials and so forth) as an indicator of profitability for hemp farmers. It is this authors contention that such infomrntation is faulty since: • Price information becomes anecdotal, and heavily relies on local processing and buying conditions. • Farmers will most likely be raw commodity suppliers and wholesale and retail prices are more a function of processing costs and not raw commodity procurement costs. • The US hemp processing market is currently non-existent. Short-tens production decisions must be made on the basis of world prices for raw products. Thus, this paper only discusses world prices for raw hemp fiber and seed. The average price of hemp fiber and tow (the by-products of fiber separation) traded on the world market was $1882/mt or $1.88/kg in 1995. However, substantial variation exists amongst countries. For the major suppliers, average export prices are as follows: Average Hemp Fiber and Tow Ezport Prices (1995, US$) Country Pricellb Pricelkg Price/mt Switzerland 58.09 517.83 517,826 Germany 56.87 S15.14 S15,135 Italy 53.40 57.50 S7,500 Belgium-Luxembourg 52.58 55.68 55,682 China 51.58 53.48 53,482 United States 50.67 $1.49 51,487 Poland 50.42 50.92 5917 Romania $0.32 50.70 5695 Croatia 50.15 50.33 5334 Hungary 50.07 50.15 5148 World Average 50.85 51.88 51,882 23 All countries are instructed to supply trade statistics using similar procedures. Prices are FOB (free-on-board), and only include the price of the commodity and transportation costs to move the commodity from the point of production to the point of exit firm the country. Reported import prices include insurance and freight, thus are not utilized here. However, the variation in export prices appears to reflect more than just transportation costs to the port and quality differentials. One obvious explanation could be that prices are also reflecting differences in partial processing the hemp fiber has undergone. Notably, world export prices have grown considerably in the last six years, presumedly due to the growth in consumer demand for finished hemp products. Although these export prices do include transportation costs to the point of exit from the country, hemp prices have clearly grown faster than the rate of inflation. It is another question as to whether these prices can be sustained These higher prices may have spurred the recent growth in hemp fiber exports observed in the first half of the 1990s. World Hemp Fare and Tow Export Prices 1987.1995 UFdAD 7 oa o.a o.a o~ _ 0 ei ex a w es ee sr w ea >b ai 9¢ ~ w as Potential US hemp producers must also compete with imported hemp. The US import price for industrial hemp (raw or processed but not spun, "customs value's was $4.71/kg or $4,710/mt in 1994; $4.26/kg in 1995; and 3.89/kg the first 8 months of 1996. (Customs values are best to compare with world export prices.) Consequently, US import prices are significantly higher than average world export prices. Using Cff values (which includes the price of the good, dripping costs and insurance to deliver the product to a US port of entry), imported hemp prices averaged $5.07/kg is I994 and $5.12/kg in 1995. (Cff import values are best for evaluating what US farmers would have to compete for the domestic market.) World hempseed export prices have been somewhat volatile over the last 10 years as discussed earlier. Average prices have ranged from 30 cents/kg in 1991 to 90 cents/kg in 1995. It would be very difficult for many farmers to weather this kind of price fluctuation Again, much of the downward pressure on price appeared to be a result of excess world production from 1986-1990. This may have important implications for significant increases in world production in the future. Prices per bushel in the following table were converted using an average of 46 pounds of hempseed per bushel. 24 Average Hemp Seed Export Prices :for Major World Suppliers (1995 Country Price/bu Price/Ib PriceJkg Price/mt Netherlands $16.10 $0.35 50.78 $783 Belgium-Luxembourg 517.02 $0.37 $0.81 $811 France $22.08 $0.48 $1.05 $1,046 Germany $11.04 $0.24 $OS3 $534 World Average $18.86 $0.41 $0.90 $898 The volatility in hemp seed export prices can be seen in the graph below. China entered the world hemp seed market in 1986, tripling world trade and depressing world prices by half. In , 1991, China ceased exporting hempseed and prices nearly doubled in 1992. In 1995, world export volume fell by 13%, while seed export prices almost doubled from 23 cts/Ib in 1994 to 41 cts/lb last year. It is very possible that the surge in interest in industrial hemp has increased the demand for seed stock for planting purposes, thereby raising export values (rather than an increase in world hempseed demand for crushing purposes.) World Hemp Seed ExpoR Prices 1981-1995 USEBb 0.5 0.4 _ - China begins e.portinp see° in 1986. world trace 0.3 35: unt8 China ceases exporarg n t991 02 - - - - - - - - - 0.1 0 81 ffi B3 84 85 88 87 88 q 90 91 8? 93 94 95 In addition to UN/FAO data, other sources have reported observed hemp prices. In an attempt to summarize reported prices, the following table was compiled. Average world price does include some degree of storage, assemblage, transportation and perhaps grading costs to move the raw product from the point of production to the point of exit from the country. Given the bulkiness of hemp fiber, transportation costs are significant and extreme variability persists in country- specific export prices. Many western European countries do some partial-processing prior to export to minimize transportation costs, hence their higher export values. Prices for EU producers include a government subsidy of approximately US$100hon for hemp. 25 Estimated Hemp Prices and Revenue from Various Sources (US$) ~L' Commodity USS/unit Est Yield Est. Revenue Notes Source Fiber 51137 /ton Avg. World Price - `94 8 S1882 Ron `95 Whole Stalk $49-78 Ron 2.5-4 ton/ac 5123-312 /ac break-even price; bast fiber 7 yield Raw Stalk $44-55 Ron 2.8-6 ton/ac 5124331 /ac defoliated chopped stalk 6 Whole stalks $200 Ron Air-dry, min. price 1 Fiber Hemp $100 Ron 8 tons/ac $800/ac 2 Dry Stems $125 Ron 16% moist; 1994 4 Raw Fibers $566-647 .36-1 Uac 5204673/ac textile and cordage 6 Ron Dry Fibers $800 Ron l.1-1.4 t/ac 20% moist; 94/5• 5 Bast Fibers $630 Ron Air~ry, min. price 1 Hurls $44-55 Ron 2.8-4.8 t/ac $124265 /ac pulp and paper, `94 6 Dry Hurls 540 /ton 4.2-5.7 t/ac 5168-228 /ac 20% moist; 94/5• 5 Seed 23 cts/Ib Avg. World Price - `94 8 41 cts/Ib ~ - ~ ~ ~ ` `95 Seed $272-331 .16-.38 t/ac 544-126 /ac oil and feed 6 Ron (353-838 (12-15 Ibs/ac) cts/Ib) Seed 16-27 cts/Ib 658-1095 5105-296/ac break-even price; seeding 7 Ibs/ac 15kg/ac Seed 40 cents/Ib 200016s/ac 5800 /ac seedingrate l Okg/ac 2 Seed 43 cents/Ib 20001bs/ac S860 /ac 3 Seed(certified) 55 cents/Ib 557 Ibs/ac 5306 /sc French yield and export 8 )mce Seed(certified) 60 cents/Ib 2000 Ibs/ac S1200/ac seeding nrte 1 Okg/ac 2 26 Source: 1/Dutch research (probably includes 5100 /ton CAP subsidy) 2/ Kentucky Hemp Growers Association 3/ KY Task Force Marketing Committee 4/ Jeyasingam 5/ Hemp Textiles International (based on availability and use of an in-field decoritator to separate the bast fibers from the bards) 6/ Agriculture and Agri-Food Canada, Policy Branch 7/ D. Marcus (Marcus' break~ven price for seed using an average of 4616s of hempseed per bu.) 8/ Food and Agriculture Organizatioq United Nations Despite these yield estimates and the wide-variety of reported price and revenue informatioq a cleaz consensus on industrial hemp profitability in the US is difficult to obtain: • Costand yield data is unavailable for US hemp production. Crop estimates, particularly yield assumptions, may vary according to the stage of legalization. That is, yields in the US may be lower initially until varietal selecting farmer know-how and seedstock quality and availability increase. The development of a domestic hemp seedstock industry (which produced certified seed well-adapted to the US) would significantly reduce production costs and possibly improve yields (although this is not a certainty). • 7&e cost of legalimtion and regulation is di,(JScult to incorporate into the production cost and profit estimates. None of the estimates above include costs associated with regulation, crop security, and THC-testing (some or all of which may be required). • Variations in hemp value-added processing makes direct price comparisons extremely d~cult (eg., price differences for raw stalls versus fiber versus pulp). It is not clear how much value-adding should be done in the field versus at local processing centers. • The US lacks any sign cant hemp processingjacilities, leading to low and uncertain prices for raw hemp. Obviously, potential hemp manufacturers would be hesitant to invest in domestic hemp processing facilities unless a large and reliable supply of local hemp was available. In the near-term, US farmers may have to sell raw fiber and seed on the world market until domestic processing facilities are established. • Very little has been done i» the way of consumer studies to project hemp sales iruo the future. Total wholesale and retail revenues from manufactured hemp products was expected to reach a little over 520 mil last year. Although this is a large increase percentage-wise, it is not clear if this merely reflects a fad or indicates some longer-term purchasing power. ('The 520 mil estimate seems high to the author, given near non- existent domestic production and processing capacity and imports of less than 51 mil last Y~•) 27 • !t is near impossible to estimate future hemp demand from the paper, wood products, and building indusdies. It is important to note that in countries where hemp production is (and in some cases has always been) legal, these sectors have not developed on their own. If these industries are critically examining alternative sources, they do not appear to be putting "much stock° into hemp as measured by their investment dollars. Of course, relative prices, thus profitability, finquently changes over time. Industrial hemp could become increasingly attractive to companies as a renewable resource in the future. • The hempseed market is less clearly defined in terms of end-uses and relative profitability compared to other oilseed crops. Again, the US does not have any oil cnrshing facilities designed for hempseed, although current facilities could be altered if the demand warranted such investment. The relative costs of hempseed oil has not encouraged the development of very many other specially-adapted crushing facilities around the world. • Price uncertainty and variability increase in thin markets where the volume of trading is relatively low (particularly in relationship to substitutes). As noted earlier, the world market for hemp fiber and seed has continued to contract and is relatively small in absolute terms. Direct contracting may be an attractive alternative to guarantee both price and quantity for both parties. • How much of a production increase can the market bear, without significontly depressing world prices? Perhaps the greatest area of price uncertainty is the effect that legalization of industrial hemp production in the US would have on prices. That is, what would happen to hemp prices if, for example, hemp production was legalized in the US? One angle to approach this question is to look at the impact of Chinese production on world prices. China is the largest producer of hempseed (with over 70'/0 of world production), and one of the largest hemp fiber producers (sharing that role with India in recent years). In 1984-86, China doubled her hempseed production. For the next six years, world prices averaged 5334/mt, compered with 5564/mt over the previous 6 year period. Although less dramatic, similar world price impacts were felt in the hemp fiber market during this same time period. . The current US hemp import market is a little more than S 1 mil and three-fourths of that is valuo- added hemp products. Despite the current fad for products made from hemp, legalized hemp production in the US would very likely depress US hemp prices, particularly in the short-run, and may even have a dampening effect on world prices, given the current state of world hemp processing technology and capacity. The slight upturn in world prices last year may be signaling excess demand or room for production expansion. This is viewed by some as the classic chicken and egg argument of the need for a cheap reliable supply of raw material before a processing industry is developed and vice-versa Any price, thus profit projections, for future industrial hemp production must take into accoum the effect of changes in both production and demand on world prices. 28 0 Profitability of Hemp Versus Other Crops There have been some attempts to calculate the profitability of hemp versus other crops. It is not surprising that those entities that strongly favor IegaliTation of industrial hemp production have, in general, the most favorable profit margins and multipliers effects. The following table is from Marcus' research. Although these estimates were for Canada, they should reflect similar conditions in the US: Ezpected Profitability of Hemp for Seed and Sulk vs. Other Crops (USS) Canola Grain Spring Low P/Y Average High P/Y (Ontario) Corn• Wheat' Hemp Hemp Hemp Avg Yield 33 109 41 14.3bu/ac; 196u/ac; 23.8bu/ac: (bu/ac) (105) (40) +2.5 t/ac +2.75 t/ac +3 t/ac Avg Price $4.63 52.10 $2.64 $5.51/bu; $6.16/bu; $6.80/bu; ($/bu) ($2.44) ($3.82) $40.44ft $45.96h 551.47/[ Total 152.21 229.22 108.23 179.96 248.13 316.29 Revenue (256.20) (152.80) Total Costs 122.46 204.26 103.23 174.63 174.63 174.63 (145+80) (110+65) Return 30.40 24.96 5.00 533 73.49 141.65 ($/ac) (136-56) (60-39) • The numbers in parentheses reflect expected profitability estimates for grain corn and soR red winter wheat production in Kentucky (all other estimates are form Marcus' Canadian research). Average prices reflect the 1990-95 marketing years. Total costs reflect cash costs and land costs (for example, total cash costs of grain production are $145 per acre; land costs are $80 per acre). (It is assumed that the Canadian estimates include Iand costs, given that it is a component of fixed costs, although land costs were not specifically mentioned.) Returns per acre reflect the difference between including lead costs or not and a US government deficiency payment of $25/ac for corn and S17/ac for wheat. Deficiency payments are subject to change in the futtue. Again, profitability estimates do not take into account licensing or growing fees and costs of providing security for the crop (all of which would lower the return per acre). However, returns could also be greater in subsequent years as seed costs come down (assuming certified seed no longer had to be imported) tmd varietal selection improved. It is extremely important to note that Marcus assumes that the grower would raise hemp for both fiber and seed simultaneously and that "If hemp were grown only for seed or stalls, it would likely generate negative returns even in best case scenarios". However, as discussed earlier, seeding rates (thus costs) vary significantly for fiber versus seed production and the production of 29 one will diminish the quality and production of the other. Obviously, this is not sufficient information to draw definitive conclusions regarding hemp profitability in North America. Other US sources provide estimates of mums to hemp production, although no explicit production costs and price information is provided. Production returns provided in the Governor's (Kentucky) Task Force on Hemp and Related Fibers are shown below: Estimates of Net Returns per Acre for Ky Crops Tobacco $1,050 Tomatoes for Processing 775 Wheat (+Def Payment) and Soybeans' 175 Soybeans 100 Average of Existing Crops 175 Corn (+Def Payment) 75 Hay and Silage 100 Fiber Hemp -low fiber price /yield -200 Fiber Hemp -high fiber price /yield 500 ' double cropping Relative profitability is an extremely important concept in comparing production alternatives. Further, expected profitability over time is germaine and price stability is a key factor in defining risk. Finally, supply expansion in a contracting market will depress price as was discussed earlier in relation to Chinese overproduction in the 1980s. IX. CONCLUSIONS Industrial hemp can be grown with little or none of the psychoactive properties of marijuana by utilizing low-THC varieties. However, most seedstock in the world has been bred for European and Asian production. The development of a US-based industrial hemp seedstock industry may improve yields (if varieties were engineered for North American production) and lower seed costs. However, this is not guaranteed. Many have argued the merits of hemp fiber and oil -superior fiber length and strength, excellent oil quality for both industrial and feed uses, and a myriad of other applications. Despite these claims, world production has steadily fallen; dtamatically since the early 1980s. Declines in production may be signaling that hemp profits are also on the decline -tither absolutely and/or relative to other production alternatives. Industrial hemp faces significant competition from 30 other natural fiber; (cotton comprises 98% of the natural cellulose textile fiber market), oils (particularly soy) and a multitude of synthetics. Specialty pulp fibers are limited to less than 5% of normal demand of other major grades of paper. Hemp processing technology remains antiquated. However, new innovative Sber separation techniques are being tested, particularly in western Europe. Given that US hemp production is essentially non-existent, if production was legalized, farmers would be limited to selling bulk production until (and if) a US hemp processing industry was established. The domestic market for hemp is relatively small ($28,000 of raw or processed hemp) and is comprised primarily of value-added products ($669,000 of hemp fabrics and products in 1995). The lack of processing facilities and other infrastructure necessary for a viable commercial hemp market in the US makes demand and profit projections extremely speculative. If legal constraints were lifted today, growers would primarily be bulk suppliers for the export market, at least in the short-run. Potential US industrial hemp growers would compete with many low-cost producers (India, China and the FSU) where labor costs remain minimal. The European Union continues to subsidize industrial hemp at the rate of $100/ton (approximately half the market price). Despite these subsidies, hemp production in France (which has always been legal) has not grown in recent years, and newly legalized production in the Netherlands, England and Germany remains negligible. Canada and Australia have both recently authorized limited commercial hemp production. It is not reasonable to believe that the US would subsidize hemp production. Further, many of the multinationals purportedly interested in hemp production (VJeyerhauser, Masonite, International Paper and Inland Container Corporation) are not confined to the US for investment opportunities. Multinationals have the capacity to invest in production and processing facilities all around the world. Nonexistent US industrial hemp production does not impede thew investment elsewhere. It is notable that foreign investment in hemp processing facilities in India, China and the FSU has been small. It is logical to assume that these decisions were based on prudent business sense. US hemp farmers would face considerable world price variability. When world hempseed production surged in the 1980s, prices fell below the break-even price required for production (as estimated from Canadian research). US hemp fiber import prices averaged 54.26/kg in 1995 (which includes some processing which would reduce farm-level prices), also well below the break-even price projected by Canadian research. If the profit margin collapses, or remains risky, alternative crops are increasingly attractive. If industrial hemp production was permitted in the US, it is reasonable to assume that production would be relatively low in early years (the EU experience bears this out). Commodity prices can be more volatile in thin (low volume) markets, cresting more market risk than US farmers might be willing to bear. Contract production would alleviate some of that risk. Arty price, thus profrt projections, for industrial hemp production must take into account the effect of changes in both production and demand on world price. 31 SELECTED RESOURCES "Alternative Agricultural Strategies in Vermont: The Case of Industrial Hemp". Halbrendt, Catherine Chan; Wang, Qingbin; and Matthew C. Mole. Paper presented at the Vermont Agricultural Economic Development Conference, Dec. 16, 1996. Bioresource Hemp Symposium 1995. Proceedings from the 1995 conference held in Frankfurt, Germany, February 1995. Colorado Hemp Initiative Project (CO-HIP) World Wide Web Site: http://www.welcomehome.org/cohip Commercial Hemp Cultivation in Canada: An Economic Justification. David Marcus. An independent study project Masters of Business Administration, Ivey Business School, University of Western Ontario. Food and Agriculture Organi~ation/United Nations. Various statistical databases. Growing Hemp ss a Fiber Material in Kentucky. Jay T. Jeyasingam. International Consultant. May 1995. Hemp (Cannabis sativa). Agriculture and Agri-Food Canada, Policy Branch. Bi-Weekly Bulletin. Vol 7. No. 23. December 1994. "Hemp: Income, Market Questions Remain "Agri-View, December 1, 1995. Wisconsin. "Hemp: Papermakers should take it with a pinch of salt" Manfred Judt Pulp Paper International. October 1994. Industrial Hemp and Other Alternative Crops for Small-Scale Tobacco Producers. USDA/ARS and ERS. 1995. - Industrial Hemp as a Cash Crop for Colorado Farmers. Boulder Hemp hvtiativc Project 1994. Report on the Legaliution of Industrial Hemp. Survey Research Center. University of Kentucky. September 1995. Report to the Governor's Hemp and Related Fiber Crops Task Forces Commonwealth of Kentucky. June 1995. US Bureau of Census. Various international trade databases. World Web Site http://ecolution.com 32 64i E71/ 195' 15: 1 i b12-Y55-El E+4J - ,itA!;S i : t Ft~. LUUuAL r.,u- ~c e Drug Research Update rock bands In Atlanta, the NORML acnequen-grown regally to Thvd rally grew from 2.000 participants in World counvie:. 1991 to 60.000 in 1992. In Africa, the Philippines and The argument Cor marijuana- Mexico, the market far These crops MarkOting Marijuana hemp Icgaluation is filled with was ruined by the development of to a New Generaoon fallacies, especially since many legal <.l.nthetic ilxrs. Rebuilding Ne plants can be used for economic and market for legal hemp would do By KeithSchuclard,PhD ecological purposes. much to relieve the recurring Gamines PR1DECo-Fourtder The marijuana plant can be used ar~d ecological duasters [liar haunt to produce methanol Cuels. but to un many vulnerable countries. Since the implementauon of a other nomdrug containing plane. While marijuana mttrketeers u7 svong national anti-druj: policy in Some companies produce methanol m exploit the environmental idr~lism 1980, marijuana use among teenagers Crom corn, fpr use in high-perfor• of the young, Ney also target the has declined steadily. manta racing engtnw. religious values that aze a major However, use remains high Companies like Kenncmetal deterrent to illegal drug use. The among adults in their lots 30s who are Laboratories wam that methanol is "Busineu Alliance fur Hemp" products of the 1970s dnrg culture. highly combustible and difficuh to maintains a from organization known Many of Neu adults continue to store; they consider methanol a a;c the "F:unily Council for Drug proselydze for marijuana use, hazardous, impractical, expensive Awareness." (Both organizations use especially through the pcpulaz media, Cuel for the uses NOR ML recom,y~' p,O, Box 71093, Los Angeles, entertainment and fashioi industries. mends. California 90071.) Determined to regain their most Use of marijuana-hemp sulks for The council distributes a flier profiuble customer-the afflueni fabric, rope or fiberboard is also titled "Marijuana and Christianity: middle-class white teenager- unnecessary. because many other What Does the Bible Tell Us To marijuana marketeeri developed a hemp plank can be used. Dot" Using a kind of hallucinated new propaganda strategy designed to If NORML really cares about exegesis of the Suipwres, the !tier exploit the environments; concerns ecology and the economy, it should argaes that everything from the "Tree and religious values of idealistic promote the use of natural plant of Life" to the "herb yielding seed" young people. products-such as sisal, abaca and refers to marijuana. Culling nc~rnxclves etc "8usinesr Law enforcement officers will be Alliance for Hemp," marijuana interested to know that the COUncil promoters distribute videos and brochures that present marijuana as a says ]esus "warned us about seizure botanical wonder plant-"the world's and forfeiture laws." Arguing that most valuable and versatile Natural Je::us would free the prisoners (dnrg Resource." The legalization of criminals), the !liar concludes, "!t was God who created hemp, He govt marijuana, they argue, will preserve + + r us free will and inswcted mankind to the rain forest, save the family farm Damtedre usr. 'every green herb' on Earth." and prevent pevoleum wa'T. Cagabarepmrnrion As the Federal government and By marketing marijuana as a rbroupheducarron drug agencies remain relatively Silent Certile plant raNer than a mind' about the health and safety harards of altering drug, the Hemp campoigners TAe Hurt Building, Suite 210 mtijusna, Nis new ecological and hope to tap into t,'te ecological SO Hurt Plaza, religious approach is making real activism of welbeduwted high school gdanu, Georgia 30303 ittrouds among middle•class students. and college students, In azr especially (a04) 37~,a500 Caznpus newspapers at respected cynical recycling of the'6t]s Culture, 1.900.983•PRlDE colleges have reprinted the Hemp these aging hippie-yuppies (huppies?) arguments almost verbatim. recognize that marijuana made initial Thomas J. Gleason, Jr., Ed.D., It isuonic that medical journals inroads among privileged lnhabiunts ~ president and Co-Founder conu,in reports on the cancer and of affluent subtvbia end elite schools. Marsha Manatt Schuchard, Ph.D., leukemia risks of marijuana- Many patents report that their Co-Founder classifying the drug ss to environ- children have received the Hemp menu! toxin-while NORML and a brochures. puticularly a fv'ORA•Q. Ad mricles may bt repnnred and lazge Segment of the popular media rallies Nat attract large cr0wds Of distributed. Pltast credit PRJDE promote marijuana as "Hemp: Friend young people Dy featuring ;wpular and the writer, ~ to Mtn and the Ecology." 2 PR[DE Quarterly, Sumrner 199: 'T' p, ~ 4 V ~ 7 ~a " f. i i~R 1 N ~ " 1 x ~ ~ A ti ~ ^ Y ~ k ~ ^ ~ .7. ~ b 'f' a W ~ O~ T n G y A^ 7 d w 7 Z L y~` j G~ 7 u S p b y t ~ y ~3 eaX3~~'" ~ sc~ %aa y ~c'~'~ sYa'$7~ j d ao. n ~ N a ~ a~ 7 ' ~ ~ r - of 3 n - in a ~ a ~ n; r H .7 ..'.~C H ~ H Spa = ~ ~~.a 77{~ N b r ~ ` ~ ~ M n ~ S ~ D Y ~ a T ~ Q ~ .1 ~ a app w O^ yn faa~.p S~ 'j0 •Ta ~~:7 ~~a 3 b b ~ v r. 'a C Y ^ .j r` w C ~ j' ^ ~ ~ ~ ~ d w u~~ w 7 O y ~ x ~ ~ A O a u _~'b-=-x~ ~F~ w a g a ~ ? - r i a C 7~ a O n^ ^ rJ. Y Q r y '.e~ N ~ ^ O. Q d ~ ~ G rPC1~~PPP000 ~ N ' .M.r a s A N~ i I ~ - ~c oa~=.a l~iS a^ _ C p ~ b b ^ ' ~ ~ t~ I ~~~~§?~~;'~~2~7Y HBO ^3 ~wi=~~~~+~` Na ice. ~w "1 ~ a 7'' ~ ;'r~~ ~ NY ~r 7C~ 'O ~ w ~ ~a `w '1'.. ,.e, . T'L rat . w' }yi b r.~ a~~ X O 64/t71il4yl 13: J2 bi_-L~3-i~[,JU J:-,H1=i It b1,, i~L~l~u::L r,aa USA TODAY • MONDAY, FEHRUAHV 10. 193 F • 3F, • Chemist is USA's ardi~n of gu gra~~s Professor Mahmoud IISohly is in charge of growing and storing the federal government', marijuana stash, for research and for a handful of patients. HY Tom Curley -...1 USA TODAY x. i OXFORD, Mitt. - In winter whh tw . h I crop In n1e Geld, It's easy to tnerlaok Nq palm of fallow, scritity earth a[ the ~ end of a gravel TOad. But Ne lwrbed•wve tent!, guard ~4x towers and monotwetivafetl elamts 1 surrounding the Deld Inmmte that - - ~ " something other tnan spyberw b pbnt• _ ' ~ ed Here. ~ ' Mahmoud ElSOhly, Sl, grows rturi• _ luw for a Dving on Nb'7icre sim at " ldf,.•,i' lee Umventp~ of ML%ibtppl. It b Ne • ~ f only farm In Ne country where pot b r+: IC®ltly grown. - And the tedetel fpvemtnent pays . him W do IC ~ , It's Bke growing coin or wDsC" 7 sayer F1Sohly, vrh0ee lnWnea card hu / 6 ~ , • the faint imprt~lan of n ttkirlJuw ~ 'O~ ' teal. "We juA hpve Oetgr security." ~ 'r RaaaareA: Tecrrvc~an Yi Ben welglkc Mort of the firm's trorlJuw gos b tmdlgd and government tesaarchers. maretjuana samples to he eesred Bu[ a scroll amount of the erop wl>unaa the gbylt&ntnt't ODOQOVeraW "cdm- ' ~ Hut even wiNout o crop in the aeld. pasalonate ux" project Under eoutt a• NeK b no shortage of work. The Urug der. thatproJetx provides metlJuaor for .,.s ~ F.ntoroemem Agency annually sends 1,000 samples of seised marijuana to eight cnronlralJ,y In patlena accts the country woo tale It to alive a variety of the firm's laboratory, This eWdence h run through numerous teas, Including ailmenq, from AIDS W gWutxntta cheeks to measure potency and expo Now nut tnanJuana Has bem ~ arc m tlo6flcldes. iced for medial putpws In t.ahtortna When truryuana is growing, the term antl AIYr01f0. the farm b en enmpki Of Geld b guanled around the clock. how tmrlJuenn might tr grown era cu4 Thera bas treeu oNy one oreak•in, un n uveted Dy Ne govemmant for se)e to foggy night years ago when someone Ne general public, though that's ter[ cut through the fence. Modon sensors Ilkety to luppen anynttte stern. have state been imtelicb. In November, C~llfomb and Aziwn Employees, even seawnal pickers voter approve0 rofercmutru legeliang e.rwa~",.r, hire0 !tin tM harvest art wbKCt to marlpuna for rtudlUnal Here. Recently, llpgtq Iqr YM goterterlarR Mahfroud EISOMF tksp~ays a benN of maAjuarsa M er background checks. The harvested the editor of The New Englartd Journal viWhwhate a'e lt0/ad. The drurta w bheW Jnmaxan, Maximo, Calomtian a Thal. crop b kept fn en aircondlupned vault of Mediciro rattle out In hvor of allows so the cut pbnb stay Irceh. ing drxtots u presctlDe pot. aMr the smoked 4narlJuana, TM,, farm b known In qw• Bartab the vue of troth inns are Clinton edminbtretlon said It would an0 none of the here ernment shortnar.d, sudted m the "aul6 where the aroma proaacute Baton who did so. etas. In pUl form s O~pHJ began et Ne unlvenl• of merlJuw le overpowerina. The Hut tae man who b aryuably Ne N• A enembDy prates ~ I fy in 190e to study a Drownlmr[ebere 181,c1ed by plont vnrl- uon'a leading agpeR on mulJuade b sor, EISDe1y rtw the suss. - 20 eomPlex plant that ery: Jamaican, ]Teri, Mexlmn and Co neR in a comer of Ole Ms qulatly terra from a after!! of w4 ~ ha0 DavrtK a culbtnl kanbian. tending the govrmtnenia film Dce In the Medliinal ~ ~ phenomenon. The rctereneutm that pawed in Calls EL"DAIy "ktl0waumuch atsout maA• Plan! Bullding,atlrab, ~ Ns I Matljaana is not foroie end Amm~e legalize the use of jueM u anyone In the COUfIVy," Jaya fingle•story Drlck ~ JIWtn ~ planted every your. tfmriJlWW wins a doctor's prea[ripdon. Allen St Plana Ot the NatlotW OrHani• DuBdit~g On the Oub I ~ ~ Tne last atop was But Nere's Do phertnaSy In the nation radon fur the Relutm ut Marihuoa dtlrti Di the spiawling pgttg0 in 1BY5. 'ihe nut sacker Ne drug. Laws, which advocaeea IegalWnon. 01! Mlaa wmpu? The L~ NatlorW ItWtute on OtAord may seem a ruNral suppner ELRoD~v says he hr lurvaatad tturi• building b unmarked sr. Drug Ahute1~ ~whleh to doctors or phlttttlaCiSCi in lhox tap )uw, rnlsha0 eWtlJuaN and nQue0ed w urfrarlaraebM. v:„~„ oveneea the rirtr4 da• sage, bus the laden! government b ua tnariJuana. He fin even developed a Compared wIW Ne rldea each spzing Ilkllympermlt that rtlartJuw•Daaed suppaitory. Bu[ De colufnned ntatniotq found elsewhere at whether to plant deJxnding upon hlnv ADd are governmenr b keeping iq pot has never smoked 1L the uaivenity, tDe hullding hu all Ne much rnarihuna b in tmok avalluMe faint under F1e^"IY's iruated mre. MQ for Na tttcgy, haY a)Jpipu look and appeal of a douDlawld! lrlo- mr researoheta "i have had this material here for so smoking nurijuarp a tnedluee, lie Dlle name. ElSohly will ge[ word M a few wreln many yen;' EISohIY myc, "and It nr~~- saya peuenq inn get the WMgq Ot The "M•PraJucc" u the ntarlJuane whether w plant fhb year. er oaurred to me to even try it" ~ o~ ~ ~ ~ a~~~ ~ ~ ~ ~ s, w ~ ~ a ~ A A ~ a n ~ ei. ~ ~ y ~ ~ 6a ~ N ~ a ' ~ e.~" ~ wN~. U91 Ul: lUU. LJ: ~U :,1: C'JJ C~.~C J~::f;~l ,L M~_ L'UU~..:.~ u- Pa a Tlttre~ March 26 1 ~IEi!! g 9 H{~IL1,4I1IFI-DRUG widely noticed (anj probably not rel- m = GIVE WAY TO THE WST fOR PROFIR egued w the opinion page). associate G~ t*t cd'norul p¦ge editor Stsve Dornfeld errs ~ takes note of the :-.vie sirnilanues r P between the current debate and ~ ~ `/.mp an another public It:silovt of a Carl ~ Pohlad enterprise--[he mttro arei s O bw~ ystem. The 157C acgmtsnon of i ro whi~was then Twin City Lines, ~ p Dornfeld writes, 'enabled (Pohlad ~ and asseutaeul to avoid bsnkruptc ~ and +m+rge with s fie[ full of esa = C thatnoprrvatebuyerwouldmrhave rn C~ ~ a9 offered." By the [ime it was Duet, Dornfeld goes o;t, 'the uxpavcn ~ ended up payin` 31.9 million fora ~ PQVFI~ II hemp ¢ very low s:. THC, the pay- bus company with an outdated, urve- Ip come muck avanyor than the alliance choactive component of muijuana liable fleet declining ridershipp; and a Z eoalccing wound the legalisation of It's also a great induunal fibeq and, huge unfunded pension habiliry.' ~ N hemp, And now the movement which according to some analysu, one of the None of this ume about by acct- ~ count: among its supporters the morcpromisingwaysfnrthewuatry's dent TwinCiryL r,amraedaprofi[ C ~ 8 American Farm Bureau and the tobacco farmers to diversify as for most of the1960s.Butinsteadof = m ~1tlatinnalOrpnir~tionfortheReform cigorettes come under greater ahd upgrx~ngg~ utcient cases smd Wising O ~ < r of Marijuana Laws (NORML), is get- greater fire. dnver solar ies, the nonry went into ~ ~ Z [mg a boost us the Minnero[a But the profit potrntiai obviously 'dive»ifiudon" u parent company N G7 Legislature owing to the nrppor: of isn't limited m present or forrter MEl loc., of which Pohlad wu ¦ big y ~ state Serrax majonry leadrr Roger Mix tob¦cco pproducers. Althougah no state shueholder and wf~ officer, acquired a r•7 ~ (DFI: Erskine). has yeaallnwed largrscalc hemp pro- proptttia like th _`Iotel Tropicana in ep Lu Vegas. a In 1 %9, after the s:ompany's drivers „r went oh s[rike, the Legislature gave Z the bletropolitan Trutsit Commission C power to acquire A4EI by cnndemna- N eon. Pohlad said he'll xll for about SI S ~ ~ million; the publics a[torntys argued saidthebuseompanywasworchclox i..~ > to ttro. The final Feiee tag cam 57.9 hl t- million. Md [hat rnoncy, Dornfeld S noes, enabled Pohlad to build MEI rn into an tn[erpnse the[ would net hrm, S by 1986, :personal profit utimatcd a[ SILO m,ll+un. ra "Wars IF A TREE FALlS», 70 jfwtlastwwk,aMocapavtsorcdbill dueeion, 10 state have fneroduted LITTLEALF[ElSaaekontheehop- C tolicenaehempgrawenmblwwoo industnal hemp bills, some of [hem ping block Logging at the Superior a > passed the state's Agricultural sponsored by prominent conserva- Nauo»alForentrrawa+smpesededin Z Committee. Moe bails the p4nt as an uve 4wmakers. In January, Vermont December sherensirorunearalisu efts- >s "agricultural Rip Van VPinkle` thu ppassed a bill rn rnnducr ¦ hmmp mar. rnvere[I that the I J 5. Forest Servitt could be a boon m a uttered farm leering studyy, and other sew, such u fwd aoc done the regvind environ- irsdtrstryaodasotrrceofjobsttacewide. Hawaii andColondo,ue:lsolook- menulmcsstnentlxforexllirsgthe i-fti4opointaout(ashempp dvocaw ingh:rd.'Thcyhaveo'tkstenedtous 300-year-old red ~tnd white pines have always liked to do) chi the US. over the Iut ?S yens," says NURML, ('The Lore of the Isines; 1/29). Now Constituuon was iuslf drafted on state coordinatorTim Davit, "but thesrnvioeftasarmorrncediatillwann hemp paper, and that our fist pest- obviously d+cy ll Laren m big business the harvest w go ahud. A prelimi• dent grew the plant Needless to say, ~ and industry, because [Ihilr) need the nary analyst: prepared by [he Lacroix Moe tales pwas to poin[ out that ht money. ['ve been doing thu too long Ranger Disura norcs, as had prevo- ramaim adamantly opposed to the to be persuaded thae politicians do ous documents, tltu `a continuous legalisatioo of po[ and ocher drugs- things for reasons other than that' timber source supply u very tropes. prer:rtely the mgma [hat's dogged the rant to the loci and rtgiotul econo- Dots-mrtunon hemp plant fo ~ a couple E/Rl ~ONL~'f p~ YU my,` and that big,'fawumber" rite of generations now. YET ANOTHER STADIUM swop art'upecially in dersund in the local The difference between pot and from the Pioneer Press: In a pie« use.' Public comnvmq on the docu• ` hemp is largely a rnateer of pomnty; that should have boon much more mentwJl6etakmuntilApri114. Q `O~~' ~~~aAal . Gl, GJ ~-LIb~1 ~1 JtnV:_~ It PP_ LJJariL r^qL ~ ~lil1 Th e University of Mississippi Rvsaarch lnatttute of Pharmaceutical Sciences IitNth Sciences Rasearttt Division School of Pharmecv o ~ Ths U niversin~ o(Ivlisihsippr I e Univenly, M7i 3167 Feb~usry 17, ' 997 160U 232.5925 F,~X (601)232.1?b: 8, C. Baker, Capgln Training Division Administrativa Servicaa 9urosu Missouri stets Highway Pouo1 1510 East Elm .street P,O, 8ors 668 Jatlerson City, MO 85102.0588 Den CeDtain 8oksr: <J Thia is in response to your letter dstfd Fsbrwry 14, 1987, In which you posatl soma quettions for me to answer. My anewsrs batow srs given in rho aama order ss your questions. t , damp plMts do contan THC, although the level is not vary high. ''he amount of TMC nquind to effuse Impairment It s funatien of the individual's own tolerenca Isval to the drug. Therefore. the amount neaasasry to impair ~ naive parson might not bs even enough to hN any affect for someone who is an habitusl uasr of the drug. CertNnly, plant material with .591 to 191 contains suftfoisnt THC to produce a high and possibly eaua• Impairment. 2. TMC can Ira extracted from Kamp laavaa Md, obviously, the conoentrstion of TMC in Lfia estrect will ba aeva?al•leld higher than that in tht plant material. r i~. 3, please refer t0 the answer In Question 1, above. 4. II that was Mr. Gain's tesitmeny, thin ha must hsvs totelly mieunasrstood ma. My position has slways been that rlthough the production of hemp might repruant an aoonomic opportunity Fn tsrma e/ the production of fiber, bird seeds, etc.. my concern has arwaya barn the posaiblllty of dlvaraion of th~a IsH malarial end the possibility of growing other vsriatias of Cannabis ether than hemp which have higher tronoantrstton of TMC. Tharafera, aoms maaturea mrght Head to bt implemented to monitor the procaaa to guard against these sltuetions. S. Plaasa refer to tM prwfpus enswars. Should you hove 1VRMt gVeatlena, pllaa0 let m0 know. II SinGarely, MsnmOud A. ElSohly, PhA., ~CFE. BCFM ` i ~~11 AeaOerch Prefasaor I - _ w..+~ rN RP4FARCN 64/61.''1997 15:41 bl~-29-U64U JEi:Ntl It P4~: LLU~uA~ ~:.u:. u. ©7/oi/1996 o9:'•i0 954a382055 WJk' AND JT :ENi pY; XERCx ;cleCSG~e' rL'1';. 1-IYill ~ 7rrk [ucaclwo~•, P~+E O1 VV•1V V~YV•~ Appendix 9: MARIJUANA POTENCY pATA; 1974 to 1896 COMPAR180N OF NON•NORMALIZED OEITA•9 TMC CONCENTRATIONS" IN COMMERCIAL AND OINBEMILL4 SAMPLER 0Y YEAQ CONt•fSCATEC YEAR COMMERCIAL•• 81NOEMILIA TOTAL CANNABIO POTENCY POTENCY S4M?f,EO 107e .06 113 t 978 .06 160 197tl 1.e1 210 1077 1.06 3, 20 231 t8%8 1,61 0.28 132 1978 _ 1.80 ].88 i~" 221 1980 t BI 8.33 ~ 193 1881 1.00 6.38 260 1882 ].tl9 7.10 487 w~ 1983 ] 87 7.4T 1,128 1884 3.R8 , 8.87 1,114 :985 ] 71 7.20 i,tl13 1889 3.3a 6.43 1,664 1887 3.46 7.93 1.093 1999 9,02 7.OZ 1,822 1899 3.at 8.es 1,272 199o S.eo +0.10 1.103 t p91 3, 20 10, 63 2,606 t 882 ]•OS 8 67 a,aa0 139] a.18 8.46 3.332 1994 a.otl T,z9 3.273 1886 3.68 7 43 4,210 188tl 6.01 10,49 181 igur• prvan p cent by rV we p 1. • • Th4 Cal~pory InoluCa kilo brleks, IooN plant matorlal, rind pudrr. ' NOTE: Th4 I+rpb~st TNC Andy:~d to datc 4 10.O6K fCoppar Csnar, AK, 1893). SOURCE: \1ARIJUANA POTENCY MONITORINC3 PROJECT through 6r30/08 UNIVERSITY OF MISSISSIPPI as 64!01/:557 15:4~ b1U-15~-Uh40 JE:;I~c7lE M~. LUUu:,L r.,ac u. l,urvnnri,-,d/- ' ..epartmerit of Public Safety ".rrrJin•J.a~r.e? \~ISSOURI ST4TE HIGH~'~'.~,1' PATROL Carnaha++ Colonel Fred ~4. ~4i115. Superi ntandent Crr~Y IR (II' 1510 East I:hn Svicet Gan- It. Fcmpkrr P03t OfGee Box 5GS Dlserrro ]efftrson City. At0 6510?•0565 Phone:1573)751J;t)•F,AX (57i)75l•9419 V/TDD: (S 73) 7i i •3313 Februor) 14, 1997 Dr. Snahmoud A. ElSohly. Ph.D. Projtet Director, NIDA The Univen ity of Hisslssippi ' University, NS 38677 Daar Dr• ElSohly, Ph.D.: Pursuant, to your telephone conversation with Seraaant Motes. we would like to confirm sem{ iR>'pinl}pion chat you diseuased;!•'ith him. Please answer the followinC quastlons: 1. Can hemp plants bs used to become impaired and at what level of THC would be sufficiantt 2. Can THC be e?tracted from Damp marihuana plants to a higher tNC levelt 3. Is THC in a hemp marijuana cigarette sufficient for marijuana impairn+ant? 4. Jeff' Gain said in his testimony before our Senate committee that you taiQ under 1:: THC would 6e no proDlsm and chrte was no fear of the crop being converted for criminal behavior. Is this aecurateT S. Our contention in law enforcement is that at bee:e theta might be a marEinal crop for hemp marijuana (or novelty market), but due to the difficulty in control:.int the diversion to an ilietal market and the desensititinL of the eonenrn++ about the harm of marijuana, ws feel compelled to oppose this le~islat:ion. A brief observation on this would ba appreciated. I[ you have any questions or need clarification, pleaes contact See;sent Ed Moses, :571/526-3273 or +t the above addresa• If you could fs>; your reply back by Duainesa day Monday, February 17, as we have a hearing on this laaua that night. Our fax number is 5)31751-6b27 or 5711751-9913. Thank you vary much for your heap in this area of concern. Sincerely. DALI S. BUSCS~tA`tN Adminis':0rativt Services Bureau ~~~1 B. C, Bake:. Captain TsaininC Division From Z~ ~ Noa2 m ~ , ~r Date: 97.03.09 t5:23:38~E§T NORML urges its mernbers and other iraerested parties to inform the national office of additional pending marijuana legislation. For up to date information, please check out NORML's website http://www.norml.org under the heading: "Pending State Legislation.' Industrial Hemo Legislation In 1996, four states introduced legislation to allow for the domestic cultivation of industrial hemp. NORML anticipates this number to double in ?997. Missouri I In December, Missouri State Sen. Jerry Howard (D-Dexter) pre-filed legislation (S.e. 79) that will establish a permit process for the production of industrial hemp. The bill, entitled the Missouri Hemp Production Act of 1997, also permits the appropriation of up to $50,000 to be used io conduct research on the commercial uses and economic viability of domestic hemp. Woward introduced similar legislation late test spring and received a favorable response from the Senate AgricuRure Committee. Contacts: V Sen. Jerry Hovrartl Missouri State Capitol Jefferson City, MO 65101" p: (573) 751-3301 , Missouri NORtvIL Attorney. Dan viers p: (573) a43.6N66 e•maic putzot Gi'mail.coin.misSC7uri pdu Oxford Hemp ~zchange 121 Sputh BroAdwey k32 Poplar Bluff, MO 63901 p: (573) 7135.6711 e-mail: oxhempriDpbmo.net° Hawaii In Hawaii, legislation allo~a-ing for industrial hemp to be cultivated by the University of Hawaii for research purposes will be debated before the legislature (or the second ye+lr in a row. Last year, the House Agriculture Committee decided to postpone voting on the measure: huwever, the legislature did pass a revised resolution endorsing a commissioned Study On industrial hemp' s potential economic benefits. This years legislation, introduced by Rep. Cynthia Thielen (R- Kairau Kameohe), once again presses the legislature to allcw Hawaii to become the first American state to domestically cultivate hemp. "The state o1 Hawaii needs to act now and plant test plats of industrial cannabis hemp so that it and not its +:ompelitors will be in the position io establish important business t;es with the manufacturer;; of hemp-based fiber, pulp, paper, oil, paints, sealants, fuel, and loon. and~with the buyers and sailers of industrial cann~is hemp seeds," states the proposed legislation (H.B. 284). Contacts: Hawaii Hemp Council , Roger Chn:aie p: (BOB) 96 ~ -0488 Rep Cynthi9 Thielen House of Representatives State Capitc•I, Room 443 415 S. Serp.Tania St. Honolulu, HI 96813 p: (BOB) 58fi •6480 of rado J Newry elected Colorado State Sen. Kay Alexander (R-Montrose) is ready and willing to continue where retired senator and hemp proponent Lloyd Casey left o}( and has re-introduced a bit! regarding industrial hemp (HB 1274). Her bill would create a commission to oversee research on industrial hemp and two other fiber crops. The bill also authorizes Colorado Srate University. in cooperation tivith the commissioner of agriculture. to grow test plots cf industrial hemp for research purposrs>. A Similar hemp bill introduced last year bill hed strong support from Colorado's agriculture community, including researchers at Colorado State Uriversity. The Senate approved the tilt on an 18-15 vote but it died in the blouse. (Please sea Ungo~ng Beefing, May 1996, for full details.) Local hemp proponent:> CO-HIP ~oiarade Hemp Indiatrve Protect) are expected to lobby ^.ard m favor of the legislation. Presehtly. CC-HIP i5 encouraging hemp businesses to draft letters to the legislature supporting hempls market di?mand One ur the bigger[ mrsconcep- tions held by legislators is that hemp is a speeially crop ~.vrth no market demand. CO•HIP's Laura Kriho explained. Contacts. Rep. Kay Alexander State Capitol Building 200 E. Colfax Ave. Denver, GO 80203 p: (303) 866.2355 Colorado Hemo Initiatve Prnlert Laura Kriho - F.O. box 729 Nederland. CO 80466 P' (303) 764-5E~32 e-mail: cohipCS~oarkstar.cygnus cnm Front Range NORML Carolina Wasters p: (s7of aso-2ssta ~Minne o CO-HIP a'so reports that Minnesota AeN. Phyllis Kahn introduced an industrial hemp bill on February 3 (H.F. 349). Co-authors of the legislation include the chairman of tt:e House Agriculture Committee and the chairman of the Ways and Means Committee. Contacts: Rep. Phyllis Kahn 367 State Office Building St. Paul, MN 55155 p: (6121 296257 e-mail: rep Phyllis.kahntshouse.leg.state.mn us Vermont It is expectetl that industrial hemp will remain on the political agenda in Vermont once again this year. According to the results of a recently released University of Vermont sun.~ey. more than 75 percent of Vermont residents say that farmers should be allowed to grow industrial hemp as a cash crop. i The survey, entitled 'Alternative Agricultural Stratzgies in Vermont: The Casf: of Industrial Hemp," was part of a stuffy commissioned by the state legislature last year to determine the viability of hemp production in Vermont. Of the 770 Varmonters who were contacted in tt•e telephone survey. 402 responded. The surveys key findings are as follows: " ' 77 percent of respondents Said they supported changing the laws so farmers coulc grow hemp in Vermont. " ' 72 percent said that Iegaiizing hemp would not hurt the atfectiveness of drug education efforts. ' ' 63 percent said that allowing domzstic hemp cultivation would not inevitably lead to the Iegali;,ation of marijuana. ' ' 55 percent seitl they would substitute all of their ~iurchase of cotton jeans with clothing made from hemp if ;hey were of euual market Grice. "7ha survey indicates what the rapidly growing U.5 hemp rnarkel is already telling us,' said NQRML Deputy Director Allen St. Pierre. °AmencanS want hemp protlucts aid they want th6ir farmers to pe a Karl ul lni5 p~uspenn; ocuhomic utdu3try. Vermont ocuvi3ts c-hour' enCOUfage their IOGai repfr?SenIa11Ve5 take this i55U2 up Once again in the StatE' legislature. Contacts Aep Fred wtastack Slate House Montpelier, VT 0550? p: (802j 82E-2256 • Vir Inia ' The Farm Bureau in b~~th Virginia and Iowa recently backed hemp as a viable state crop. Not surprisingly, legislators ~n both states are now taking a much closer Zook at the issue. Recently, Virginia Del. Mitchell Van Yahres (D-Charlottesville? introduced a resolution iHOUSe Joint Resolution 656) to esttlblish a joint subcommittee to Study the economic benefits of. and barriers to, the production Oi industrial hemp in that state hemp. "We are extremely plea:>ed to see that Virginia has joined the growing number of slateas that are investigating industrial hemp," said Eric Steenstra of Ecolution. "Gruen the long history of hemp in Virgins and the fact that so many farmers here now depend on tobacco, growing hemp makes good sense. Farmers are struggling to make ends meet and we believe that hemp wili be an excellent alternative to tobacco." Contacts: Ecolution EnC Steenstra p: (540) 207-900t e-mail: webmstr~ecolution coin Del Mitchell Van Yahres ~ 223 Main St. Charlottesville, VA 22902 p: (804) 293.6463 Iowa In Iowa, Rep. Cecelia Burnett (D -Ames) is contemplating introducing industrial hemp legislation. Contacts: Rep. Cecelia Bvrnette State Capitol Building Des Moores. IA 50319 R' i5t5) 232-27.0 Iowa Np?I ^L Carl OlsE:n p: (515) 262.69:~7 e-ma,l: Cart~cor-nmonbnk.net Kan As in virg,nia. a resolution mandatincFlegislators to organize a task-torte to study the viability of industrial hemp cultivation has also been introduced recently in Kansas by the Senates Gomm~ttee on Agriculture (SCR 1605). The measure states that the taste-i,-~~ shau submit its recommendations an or before January t2, i998 Contacts: Sen. David Corbin State hou<.ua Room 120-S Topeka, KS 66612 p 19131296-7386 Other States Later this year, NbRML anticipates the introduction of hemp bills in a number of other states including Oregon, illlnois, Kentuckv, and South ©akote. According to to•mer Colorado Sen. Lloyd Casey, ~egislei^ors in these states range from "75 percent to 95 percent sure" that they will sponsor legislation in 1997. Contacts. Illinois: Rep Richard J. Winkel. Jr. Huntington Towers Suite 205 201 W. Springfield Ave. Champaigr, lL 61824 p: (217) 355-499a Kentucky: Sen. Barry Metcalf ~ 141 Alycia C)r, Richmond, F:Y 40475 p: (606) 624.8387 Oregon: Rep. Floyd Prozanski P O. Box 11511 Eugene, OR 97440 p: (541) 34:?-2447 South Gakcta. Sen. Franw. J. Kloucek F.R. Jt1 Box 56 Scotland, 5? 57059 n !n05) 58:;~44ft3