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HomeMy WebLinkAboutCOM 0220.000 1996-1998JOHN RAY Councilman March 21, 1997 Hilo Phone: (808) 961-8265 Fax: (808) 969-3291 n r.. 1� i - r-` Waimea Phone: (808) 885-5875 R_'` _ _ % Fax: (808) 885-7184 COUNTY COUNCIi97 M 21 PM 1 4 7 County of Hawaii Hawaii County Building 25 Aupuni Street Hilo, Hawaii 96720 r rr/ COW, COUNTY OF HAWAII TO: ALL COUNCIL MEMBERS COUNTY COUNCIL FROM: JOHN RAY, CHAIRMAN O COMMITTEE ON HUMA ) ER ICES AND ECONOMIC DEVELOPMENT RE: SPECIAL MEETING: HEMP PRODUCTION AND THE HEMP INDUSTRY Please be informed that on April 3, 1997 the Committee on Human Services and Public Works will be holding a special informational meeting regarding Hemp production and the Hemp industry. The meeting will run from 9:00 a.m. until 12:00 noon. The purpose of this meeting is to provide an opportunity to educate the Council on the rules and regulations governing hemp, the pros and cons of pursuing a hemp industry, the history of hemi production in the state and the current status of the hemp industry in Hawaii. This matter was brought to my attention by Mr. Roger Christie. The information he has provided me and recent efforts and activity at the State level have convinced me that this meeting would be valuable at this time. Representatives David Tarnas and Cynthia Thielen have graciously agreed to attend our meeting and share their perspectives on Hemp and the Hemp industry. They, along with eleven other Representatives, introduced House Bill No. 284 which called for agronomic research of Hemp by the University of Hawaii. Especially in light of their tremendous work load at the State Legislature, I am very grateful for their participation in our meeting. For your information, I am in contact with other individuals and agencies that may be able to contribute to our discussion. In addition, I have attached information provided to -me by Mr. Christie and other documents that may aid our understanding and review of this matter. If you have any suggestions, comments or questions, please contact me as soon as possible. Thank you. RAY/apn Note: Large attachment (148 pp.) is on file in the Clerk's Office U � — INDUSTRIAL HEMP STUDY Prepared for the Nineteenth Hawaii State Legislature January 1997 Submitted by the Agribusiness Development Corporation in Response to House Concurrent Resolution 63: Requesting the Agribusiness Development Corporation to Conduct a Study of the Economic Potential, Problems, and Other Related Matters of Growing Nonpsychoactive Industrial Cannabis Hemp As an Agricultural Product in Hawaii Agribusiness Development Ccmcoration / 235 S. Eeretania St., Rm. 303 / Honolulu, Hi 96813 586-0186 (TES) / 55i-0189 (FAX) INDUSTRI HEMP STUDY/2 PREPARED BY: • ADC BOARD James Nakatani, Chair, Board of Agriculture Mason Young, representative, Department of Land and Natural Resources Rick Egged, representative, Department of Business, Economic Development, and Tourism Malcolm Saxby, Hawai'i Island representative Yoshito Takamine, Hawai'i Island representative Judith Williams, Kaua'i representative Allen Smith, Kaua'i representative Robert Sutherland, Chair, ADC, and Maui representative Paul Otani, Maui representative David Wong, O'ahu representative Jack Keppeler, O'ahu representative • TECHNICAL REVIEW COMMITTEE Noel Kefford, Ph.D., retired dean, LIH College of Tropical Agriculture and Human Resources Robert Osgood, Ph.D., Hawaii Agricultural Research Corporation (formerly HSPA) Millicent Y. H. Kim, former director, House Majority Research, and former director, Research and Development Dept., County of Hawai'i Leroy Laney, Ph.D., economist, First Hawaiian Bank Hiroshi Tanaka, retired legislator • ADC RESOURCE COMMITTEE John Halloran, Ph.D., College of Tropical Agriculture and Human Resources Keith Fukumoto, researcher, Legislative Reference Bureau Arlene Santos -George, Department of Business, Economic Development, and Tourism Myron Isherwood, Department of Agriculture Paula Helfrich, consultant Keith Yabusaki, researcher, ADC INOUSTPIPL HEMP SP„ DY/2A We the undersigned, members of the Technical Review Committee and the ADC Resource Committee, have read, reviewed, commented upon, and contributed input to the _industrial Hemo Report prepared in response to House Concurrent Resolution No. 63 H.D. 2 requesting the ADC to conduct a study on the econcr.._c potential, probiems, and other related matters of growing non psychoactive industrial cannabis hemp as an agricultural product in Hawaii and hereby transmit this report to the ADC on this day Friday, December 20, 1996. � �� Dr. Noe'_ Ke£ford 3. Millicent Kim ) cz�- � Mr. Hiroshi Tanaka Ms. Ms. ��V- 4TH Dr. Robert Osgood Dr. Leto? Laney Mr. Keith Fukumoto Mr. Myron Isherwood Dr. K ith Yabusaki '-OUSTRW HEMP j%OYIJ PREFACE The Agribusiness Development Corporation (ACC) was established by the sixteenth Hawaii state legislature to create new and sustainable directions for diversified agricultural initiatives in the state of Hawai'i, particularly on newly available prime agricultural lands that have been in industrial sugar production for about 160 years. Growing and processing industrial hemp on former sugar lands has been proposed to the Hawaii state legislature as a viable agricultural alternative. Passed by the eighteenth legislature, HCR 63 requests ADC to explore the economic potential, problems, and other matters related to starting such an industry in Hawaii and to present this information during the nineteenth session to aid legislators in their decision making. Readers of this study should be aware of the following: There is no discussion of THC -active hemp because growing it on former sugar lands was not proposed in HCR 63. However, ADC is aware of the California and Arizona initiatives and other such efforts. ♦ In the U.S., industrial hemp has not been grown commercially since World War II. Only limited if any field data on hemp exist. Because of this and because data on other related bast fibers are the closest comparable data that can be applied to hemp, the production and processing of industrial hemp are discussed here in terms of other bast fibers. ♦ Many of the materials listed in the section "Technical and Reference Resources" can be found in the ADC library. ♦ Lines 1 through 3 of page 2 of HCR 63 cite an Imperial Valley, California, project conducted with official government permission; ADC's research indicates that the appropriate permissions were not received and the project was terminated. ♦ Lines 5 through 8 of page 2 of the resolution state "three states have permits pending to grow industrial cannabis hemp in their jurisdictions." ADC's research indicates that no individual or state perm is to grow industrial hemp have been issued by the U.S. Drug Enforcement Agency. Two registrants that conduct research and are registered to grow marijuana hemp for research are the University of Mississippi and the U.S. Department of Agriculture in Bethesda, Maryland. INGUSTRLAL Hens STUDY/ 4 INDUSTRIAL HEMP STUDY CONTENTS I. EXECUTIVE SUMMARY........................................................................................0 II. INTRODUCTION Statementof Purpose............................................................................................0 Methodology.......................................................................................................... 0 III. COMPARATIVE CROP ECONOMICS...................................................................0 IV. NATIONAL STATUS REPORT..............................................................................0 V. INTERNATIONAL STATUS REPORT....................................................................0 VI. HAWAII IndustryAnalysis....................................................................................................0 Industrial Infrastructure Capabilities.......................................................................0 VII. CONCLUSION.......................................................................................................0 VIII. TECHNICAL AND REFERENCE RESOURCES....................................................0 APPENDICES A. HCR 63..................................................................................................................0 B. Nationwide Poll Conducted by Agribusiness Development Corporation ................ 0 C. Letter from Leroy O. Laney, Ph.D., Economist, First Hawaiian Bank ..................... 0 Figures 1. Modem Uses for Hemp..........................................................................................0 2. Industrial Applications of Hemp..............................................................................0 Tables 1. Gross Revenue of Popular Commodities...............................................................0 2. Industrial -Hemp Yield and Return Estimates..........................................................0 3. Industry Analysis....................................................................................................0 Appendix Table B.1. Summary of ADC Nationwide Poll.................................................0 INDUSTRI HeAp STUDY/5 I. EXECUTIVE SUMMARY ♦ National Status of Industrial -Hemp Activity According to the August 1996 nationwide poll conducted by the Agribusiness Development Corporation, there is little national interest and activity in industrial - hemp production. There is limited investment interest in candidate mainland areas, and no laws suppporting industrial -hemp production have been passed, although annual submittals are anticipated in several states. A Vermont legislative study is due in January 1998. The USDA Alternative Agriculture Research and Commercialization Center has a substantial body of knowledge on bast fibers that could be applied to industrial hemp. National import market value is less than `5750,000. ♦ International Status of Industrial -Hemp Activity Between 45,OCO and 200,000 acres are cultivated and processed worldwide., With the exception of People's Republic of China and Russia (where licensing requirements could not be verified), all demonstration projects are allowed by government license only. World -market estimates are small, and commercial values appear to have been static for some years. Total world market, including all value- added components, is estimated between $5 million and $40 million. ♦ Potential for an Industry in Hawai'i All known industrial -hemp cultivars grow in temperate zones, which are located above 30° north latitude or below 30° south latitude. At 20° north latitude, Hawai i falls within the belt that favors the THC -active variety of the plant. Therefore, tropical cultivars of the non -THC -active variety would have to be developed for the islands if the crop were to be grown here commercially. If such cultivars were developed, nematode and tropical weed infestations—natural parasites of the plant—would impact the production of industrial hemp and require expensive countermeasures. No substantial investment interest or consumer demand can be verified for Hawati i, and no processing facilities are available here. Building facilities would require considerable investment because of the constraints of processing procedures, labor costs, and environmental regulation. I There is a wide range in these values because these numbers are estimates and hemp growing is on the decline. II. INTRODUCTION STATEMENT OF PURPOSE INOUSTRIPL HDAP STUDY/ 6 The eighteenth state legislature, via HCR 63 (Appendix A), called for an unfunded study of industrial hemp as a potential crop replacement for sugar cane. Former sugar lands and water are abundant and available for agriculture, and former sugar workers are in dire need of new employment. Information gathering and fact finding were to be done by the Agribusiness Development Corporation (ADC), a quasi -public entity established by legislative mandate, in cooperation with the state Department of Agriculture, the state Department of Business, Economic Development, and Tourism, the College of Tropical Agriculture and Human Resources of the University of Hawai i, and the Legislative Reference Bureau. ADC was to examine the economic potential of growing and processing industrial hemp, as well as the legal barriers and constraints, and to report back to the nineteenth legislature in January 1997. The original draft of HCR 63, authored by Rep. David Tamas and Rep. Cynthia Thielen, called for the actions described above to be performed by the Legislative Reference Bureau. During conference -committee deliberation, the draft was modified to establish a collaborative effort between several state agencies and ADC, which was appointed the lead agency. METHODOLOGY The ADC board employed these methods to develop a body of objective knowledge: ♦ Established a technical review committee of distinguished experts and researchers in agricultural economics to (1) assist the board and resource committee in preparing this study and (2) develop a scientifically based industry analysis. ♦ Conducted a nationwide poll (Appendix B) of all state and territorial departments of agriculture to take a "snapshot" of the current status of industrial -hemp initiatives; of 53 polls distributed, ADC received 36 responses. ♦ Reviewed materials provided by Reps. Tamas and Thielen and testimony for HCR 63/HR 71, HE 3289, and HE 3791.2 ♦ Reviewed some of the voluminous material on hemp available on the Intemet. The Internet provides access to over 15,000 articles, press releases, and study sites, but many of these are biased in content. Over 4,000 information sources were scanned 2 These bills and resolutions are slightly different versions of each other. NOUSTMAL Howa Sruov / 1 for objective content. This information is primarily anecdotal (does not contain objective technical data applicable to economic analysis), advocacy oriented, and linked to legalization initiatives. In cases where accredited institutions were named, efforts were made to obtain copies of technical data for further review. ♦ Contacted state university researchers and bast -fiber producers in Texas and Louisiana (these two states were chosen because they have done the most extensive work on, and received USDA funding for, the commercial production of kenaf fiber). ♦ Attempted to obtain (1) federal research information from the USDA Alternative Agriculture Research and Commercialization Center and the USDA Cooperative Research, Education, and Extension Service and (2) industry information from non - wood fiber associations, purveyors, and manufacturers. ♦ Requested a professional opinion on the content of this study from Leroy O. Laney, Ph.D., First Hawaiian Bank's highly respected economist (Appendix C). IND USTRK Hemp STUDY IS III. COMPARATIVE CROP ECONOMICS Historical cultivation of industrial hemp (Cannabis sativa L., hereinafter referred to as "hemp") was first defined in botanical terms in Philosophia Botanica (Linnaeus, 1751) and more recently described in the article "A Practical and Natural Taxonomy for Cannabis" (Small and Cronquist, 1976): Two widespread classes of plant are discernible: a group of generally northern [above 30° N latitude] plants of relatively limited intoxicant potential, influenced particularly by selection for fibre and oil agronomic qualities, and a group of generally southern [below 30° S latitude] plants of considerable intoxicant potential, influenced particularly by selection for inebriant qualities. It is generally differentiated from its parent crop by a low content of cannabinoids, of which 7-9 tetrahydrocannabinol (THC) is the psychoactive agent in marijuana hemp (also Cannabis sativa L.), and belongs to the group of plants known as bast fibers. Bast fibers (other plants are kenaf, jute, crotaleria, and flax) and other fiber crops (e.g., cotton, coir, sisal, abaca, and manila hemp) have been cultivated for thousands of years and are characterized by fibers (short or long) that when processed yield a strong natural fiber. Historically, these have been used in the production of paper, textiles, and cordage. (See Figure 1 for other uses of hemp.) By-products of bast -fiber plants (stalks, hurds, and seeds) are used for fuel, biomass, construction materials, varnish, food and industrial oils, animal bedding and feed, and other products. (See Figure 2.) In general, according to the :Ton -Wood Fiber Association, bast -fiber industries have been successful in low-cost, large-scale industrial production and co -located processing areas (primary and secondary). Bast -fiber economics, production techniques, and potential uses are generally interchangeable with those of industrial hemp; bast -fiber production is more labor intensive than that of wood or cotton; and bast -fiber economics are increasingly impacted by low-cost synthetic products and technological advances in traditional commodity markets (Congressional Research Service Report for Congress, June 1992; USDA Agricultural Research Service memorandum, August 1995; Bioresource Hemp Symposium proceedings, 1995). Gross revenues of popular commodities are listed in order of increase profitability in Table 1, which is based on CTAHR crop -comparison estimates, the 1994 Agricultural Statistical Service Annual Report, and information from Hawaii State Department of Agriculture economists and industry sources. The table is intended to provide a rough comparison of gross revenue (mean farm gate) but does not differentiate between small- QUSTmL HEMP STUDY I A scale production (e.g., truck crops, watercress) and large-scale plantation production (e.g., sugar, pine), which have expensive processing infrastructure requirements. It is assumed that bast -fiber production would not be feasible on small-scale acreage due to processing requirements and costs. There is variation in yield/return estimates for industrial hemp due to differences in processing short- or long -fiber varieties, crop loss in retting/decortication, and a wide range of yield estimates, from a low of 3 tons/ acre to a high of 13 tons/acre (see Table 2). There are similar differentials in statistics for sugar and kenaf production, where average yields are more critical in judging crop profitability. A 1995 study done by the USDA Agricultural Research Service gave much lower yield/ revenue figures, from less than $180 to $460 per acre per annum. Most sources (Bioresource Hemp Symposium proceedings, Danforth International, Weyerhauser, etc.) state that it is critical in gauging bast -fiber profitability to remember that estimates of returns/acre have little meaning until the following conditions are met: a viable market is established, and significant private -sector investment is secured to support appropriate production technology. TEITILES TECHNICAL • IMAR TEITILES •^.HOPERS •GMIME .;Auxs •POPE •µNOBMLS •rfTS • wDRnxG •cuvu EMGs UOINES •(JM •DENIM •(NPFR .SO(IS •OEOrDTES WES � • GINE MIS (ham rarmnaw / hbn) I Bast Fibers 1 Branch Tips- & Leaves THc • ECICIWDRUGSFOR: Jw(aw OMI"G PDMS • PSY(N0.1(INE MSMUS INDUSTRU& HEAP STUDY 1 1 D OTHER F00O5 T CEINICAL PRODUCTS •SURD OI( •Oa r'vls •5(NNLYIS •+WOJPINE •.xRXSMis •(IWNLWUj8MNIS M,dxxr • GOOD SOFFILMENIS • G H6 . Tutt PAPER !H;:m%sta" lln memona hemp Dnn;inusmaempeds INDUSTRIAL •PRINTING P0.ffR PRODUCTS •RNF WD SFE('A�' I I , , Whale Plant- •6MHBFI PINPS :�.Ul ESOSTGCl COMPOSITES •t(OINKA FIUfR BUILDING (OMRESSIOM pP0 MATERIALS MOCOEOPUM •xFWSP9Nl •::ec[AO4PO • 9i1 VCLJTDI •WO971RO 0.N0 •'NSUUOOx M0.RRW LWxGS .GH9ERGIASSJ3S::.JR AIl➢NG •iEMFM181OCRS STUCCO -40 •�IT,L •cmnxcs !H;:m%sta" lln memona hemp Dnn;inusmaempeds PERSONAL HYGIENE '� MEEDF0005 I I , , Whale Plant- •9NJMPoO •91RnSEFO :�.Ul ESOSTGCl •�'� •(OSMFTNS MGT3 ; MULCH BEDDING .MUSHPWM(D.MFOST Hemp Oil .S`eed.Cake. •MNL AFEED LHurds_(SZhvM;) Leaves Seeds •namx+ xncuR .- - - - - - - - - Cell Fluid- •0910.KFLUIDS !H;:m%sta" lln memona hemp Dnn;inusmaempeds W low) + I I , , Whale Plant- FU :�.Ul ESOSTGCl Agricultural Benefits •i4RESI5TdNLE •FLMIxpOOX OF PESIKIOES • SOIL IMPRMANI IN • wFEO SUPPHS$IOx MnNOUT a:SSDWIZZS CROP MUCH SOUn'.e: 'A. Kam ana G. Meson, • POU14 rsaunax mw In59Me, Coiop, Gmnany, 1995 SOURCE: Ka us and Leson 1995. Figure 1. Modern Uses for Hemp I NOUSTRIPL HEAP STUDY/ 11 Fiber textiles cordage construction products paper & packaging furniture Hurd electrical automotive paints & sealants plastics & polymers lubricants & fuel energy & biomass compost Seed food & feed SOURCE: C&S Specialty Builder's Supply Inc., Advanced Composites from Annual Fib ersTM, Harrisburg, Oregon. Figure 2. Industrial Applications of Hemp INCUSTRIX HEUP $TUOY / 12 Table 1. Gross Revenue of Popular Commodities, Listed in Order of Increasing Profitability COMMODITY GROSS REVENUE/ACRE/ANNUM Cattle ..................................................................................... 20 ........................................................................ Timber (Eucalyptus) ........................................................................ ........................................................... 250 . ........................ Haylage i 275 ................................................. ...................... ..................................................................................... Kenaf' 33G-5500 ........................................................................ ..................................................................................... Industrial Hemp` 450-1292' ................................................................ ............................................................................... Sugar ........................................................................ ................ ..... 2,000-2,500 ............................... .......... ........ ............ Macadamia nuts 4,000 ............ ­­ ........................................................ ............................ Pineapple` ........ ........................................... 4,000 . ................ ......... ........................................................................ ........................................................ Vegetable truck crops ........................................................................ ..................................................................................... 5,000 Taro 7,000 ......................... .............................................. ..................................................................................... Papaya 8,000 ........................................................... .................................................................................................. Banana 8,000 ........................................................................ .................. Seed Corn ................... .................................................................. 8,000 f ................... .............................................. ...................... ......................... Coffee 8,000-10,000 ........................................................................ ...................................................................................... Ginger ........................... 20,000 .... ...................................................... ........................................................................ Watercress 40,000 ......................................................... .............................. ......................................... ........................... Ochids/roses 90,000 -Proceedings from the Fourth Annual International Kenaf Association Conference, Feb. 5-8,1992, Biloxi, Mississippi. bAverage. �Vermont Dept. of Agriculture, cited in Bioresource Hemp symposium proceedings. dAverage. -Pineapple is a two-year crop; the figure of 54,000 given here represents the two-year total, $8,000, divided by two. Value, not revenue. [No usTRLAL HENip STUCY / 13 Table 2. Industrial -Hemp Yield and Return Estimates CROP PRODUCT ....................... .............................................................. YIELD ........................... VALUE ..................................... PRODUCTION COST ............................................ NET RETURN (ton/acre) ($/ton) ($/acre) ..................................... ($/acre) ($/acre) Dry stalk ...................................................... 5-7 ......... ..................... 55-113 .........................t.......--- 170-759 ......................... 286 ................................... . ...... .................. (11x505 . ................. Hurds 3.5-5 48-73 170-365 .................................................. Raw fibers ............................... .1-1.2 ........................... 280-770 ........................... ..................................... 280-925 ..................................... .................. ............. . . ....... ..................................... .................................... .......... ........................................... Combined fiber crop ............................... 450-1292 .................. ................... ... . .. ..................................... 286 ............................................ 164-1006 ...................................................... Processed seed oil ...................................... .............. ...................... ........ 1.0 ............................... ........................... 140-800 ........................... i 140--800 .................................. ................................... 195 ... ......................... .............. (55}-605 .............................. Certified seed 1.0 1,200 1,200 195 1,005 SOURCE: Bioresource Hemp Symposium proceedings (1995), Kentucky Hemp Study (1994). INCUSTRLAL HEUp STUDY/ 14 IV. NATIONAL STATUS REPORT ADC conducted a national survey in August 1996, faxing 53 forms to state and territorial departments of agriculture (49 states plus the territories of Puerto Rico, Guam, and American Samoa). The survey asked for current legislative, administrative, and university initiatives, and solicited contacts for information on industrial production and manufacturing. The 36 responses yielded the following "snapshot" of national activity related to industrial hemp: ♦ The Vermont legislature passed a resolution in 1996 calling for a two-year study similar to Hawaii s to be funded by public-private collaboration. As of December 10, 1996, Vermont DOA officials indicate that a preliminary draft status report is being prepared for the state legislature and that the final report is due in January 1998. Vermont's director of agriculture, Leon Graves, indicated that his department is solely authorized to respond on this study. Deputy Director Roger Clapp provided ADC with production information (validating statistics cited by the USDA and Bioresource Hemp Symposium proceedings) and some processing costs and comparisons. There is no evidence that Vermont has identified cost-effective processing technology or secured significant investment commitment. Hal Nelson, of American Hemp Mercantile in Seattle, Washington, indicates that the cost of establishing pre-processing plants and spinning mills would be difficult to justify in the short term. ♦ In 1994, Kentucky completed a highly controversial study on industrial hemp and other bast fibers that provides comprehensive data on production, economics, and legal barriers.3 According to Mark Farrow, legal counsel to the Kentucky state department of agriculture (and a member of the Governor's Task Force on Hemp Study), the state is interested in pursuing sustainable alternatives to tobacco production, but the lack of corporate interest in the production and processing of bast fibers, including hemp, is a major constraint. No interest in pursuing industrial hemp as an agricultural alternative has been indicated by the current Kentucky administration and legislature. ♦ Several states are engaged in the study or commercial production of the bast fibers kenaf, sunn hemp, crotaleria, and flax: Colorado, Connecticut, Delaware, Georgia, Louisiana, South Carolina, Texas, Vermont, and Virginia. Of these states, Texas and Louisiana have done the most advanced work on, and received USDA funding for, 3 ADC has hied to obtain a copy of this study, but Kentucky is not distributing the document. INDUSTRY HEMP STUDY/ 15 the commercial production of kenaf fiber. Kenaf and flax have some support in the tobacco states, however, lack of significant private -investment interest still constrains bast -fiber initiatives. No other legislative, administrative, or university research studies or projects are underway at this time. A legislative resolution concerning industnai hemp is being considered in Colorado and Missouri. In addition to conducting this national survey, ADC contacted and acquired information from the following federal programs and industry organizations: ♦ USDA Alternative Agriculture Research and Commercialization Center (AARCC) AARCC was established to initiate partnerships that would promote the use of alternative crops in industrial, pharmaceutical, and food production. At present, the center is engaged in extensive studies of—and commercial partnerships involving— several bast fibers, most notably kenaf. AARCC would be the logical choice to conduct a scientifically validated study of industrial hemp in Hawai i. ♦ USDA Cooperative State Research, Education, and Extension Service (CSREES) Serving as liaison to the Secretary of Agriculture on agricultural -policy issues, CSREES is a federal program under USDA whose mission is to support alternative - crop research, as well as provide educational and technical assistance for the development of sustainable agricultural programs and projects. CSREES lends substantial support to land-grant university institutions and state departments of agriculture for programs and projects with agricultural emphasis. It also maintains contact with international agricultural agencies and monitors world -production markets in commodity, industrial, and pharmaceutical crops for competitive application in the U.S. Because CSREES has also collected up-to-date information on bast -fiber production around the country, it is a major repository of materials relating to the use of non -wood sources in biomass, textile and paper manufacturing, crop commodities, and food -supplement production. Since 1985, CSREES has cooperated extensively with AARCC on kenaf research and commercialization, expending over $10 million on partnership ventures, which currently yield some limited success but cannot sustain expansion. In 1995, a USDA summary on industrial hemp and other bast fibers was issued that indicated there was a niche market for industrial -hemp products but limited sustainable production and investment interest, notwithstanding legal barriers and constraints. Lack of interest is primarily due to (1) high labor and production costs in the U.S. relative to those of developing nations, (2) abundance of wood and non - INousTPAL HEMPS cy 116 wood fiber sources, and (3) technological innovations that make it possible to substitute inexpensive manmade fibers for natural fibers. Estimates of gross revenue per acre of hemp are tentatively established tend to mirror known kenaf yields of $350 to $500 per acre per annum. CSREES has published extensive bast -fiber data, which have been reviewed by ADC's technical resource committee. ♦ Commercial and non -wood fiber organizations: Weyerhauser+ Ecusta Mill, Pisgah Forest, North Carolina Glatfelter Corp., Harrisburg, Pennsylvania Dexter Nonwovens, Windsor Locks, Connecticut Danforth International, Inc., New Jersey To collect the following data, ADC reviewed industry literature, conference proceedings, general information, and interviews with scientists, researchers, practicioners, manufacturers, and distributors. Bast and leaf fibers use the same kind of production and processing technology and have interchangeable product linkages. Processing bast fibers is much more expensive than wood -pulp processing because of silica by-products, which can damage traditional processing machinery and which are subject to stringent Environmental Protection Agency disposal regulations. After ten years of research, pre -commercial trials, and industrial application, kenaf and flax are still not commercial successes in the U.S. Processors and distributors indicate there is some level of market positioning by well-known clothing and shoe manufacturers who have an interest in capitalizing on the sensationalism of hemp -based products. According to Frank Riccio of Danforth International, the total U.S. revenue from raw -hemp imports is about $750,000 per year. Discussions and correspondence with these organizations yielded the following additional information: 1. Asian pulp (e.g., hemp, jute, sisal, and coir) is generally rough and extremely difficult to utilize in standard Western products without several levels of processing, which increases production cost. 2. Flax and abaca have tensile properties that other bast and non -wood fibers do not have. Non -wood production and processing are very costly due to wastewater - disposal requirements and Coastal Zone Managment regulations. Other ADC spoke with Brian Weston, a scientist in Weyerhausers research and development section. IncJSTR iHedPSTuor/17 countries do not have such disposal requirements and anti -pollution regulations and. 3. Biomass disposal requirements have created an abundance of "free' raw non - wood products (e.g., wheat and ryegrass straw), which producers are willing to give away due to costly disposal regulations. 4. Most tree crops have lengthy harvest cycles (six to ten years) and are grown on hilly lands that are not classified as prime agricultural land. Growing hemp on these soils results in multiple harvests, which can increase the risk of catastrophic crop losses as well as soil erosion and depletion. 5. Weyerhauser operates what it calls a small non -wood pulp mill, which cost almost $550 million to construct and which produces 1,400 tons a day or 450,000 tons a year. Due to more stringent environmental regulations, the same mill would cost over $1 billion now. Mini -mills are in development stages, and estimated costs for these range from $20 million to $150 million. 6. Danforth International is a third -generation importer of specialty fibers and pulps for paper, textiles, nonwovens, thermoplastics, and composite materials. This and other companies have seen a dramatic drop in U.S. and European commercial interest in bast fiber. 7. There is little industrial use of hemp in the western hemisphere, except in cottage industries. The amounts imported indicate that there is little commercial potential and therefore little interest in developing a hemp -processing industry. 8. The sources of fibers used in most imported products are small niche -market companies in Eastern Europe and the People's Republic of China. 9. Scientific data on the morphology, properties, and characteristics of hemp and the agricultural viability of the crop suggest that hemp has no specific benefits vis-a-vis other fibers. 10. No substantial import figures could be verified for hemp seed and oil. Any product advertising for food use would require FDA approval and therefore delay hemp's entry into the market. 11. Danforth International states that legal status has no bearing on industrial hemp's economic viability. Total annual import figures, based solely on Danforth International's client demand, are as follows: flax, 7,000 tons; sisal, 5,000 tons; abaca, 2,500 tons; and industrial hemp, 1,200 tons. INC'JSTRu HEMP STUDY/ 18 V. INTERNATIONAL STATUS REPORT Several resources were reviewed to determine world -market revenues, gauge serious production and investment interest, obtain findings relevant to tropical production, and identify scope, revenues, and acreage for growing and processing industrial hemp. A total of about 45,000 to 200,000 acres are currently in production, all in temperate climates (above 3C° north latitude or below 30° south latitude), with primary processing (retting and decorrication) in People's Republic of China and Eastern Europe.s More sophisticated technological applications exist in Western Europe. Total revenues generated by industrial hemp in world commerce, including all applications and value- added conditions, are stated variously: $5 million, University of Kentucky researchers; $10 million, Danforth International and Technical Association of Pulp and Paper Industry; and S40 million (the highest estimate), Ecodesign Group, Canada. UN/FAO sources indicate that industrial hemp has the lowest yield of non -wood fibers: in the neighborhood of 3 to 7 tons of dry matter per acre, though there are published reports of 5 to 7 tons per acre. Data on individual countries are as follows: ♦ Eastern European acreage: At one time estimated in excess of 50,000 acres. Has dropped substantially to approximately 20,000+ acres primarily in the Ukraine and Hungary. Leading cultivar sources are the GATE Institute (Hungary) where the Kompotli cultivar has been promulgated by Bocsa, and the VIR Institute in St. Petersburg, Russia. These are the primary seed sources for European hemp cultivation although some interbreeding with French strains has had some success. All research and cultivar operations are for temperate zone cultivation. (Note: other non -wood fiber production, such as flax exceeds hemp production by a factor of 10 to 1.) ♦ People's Republic of China: No production statistics available. ♦ France: 6,000 acres of hemp cultivation in temperate areas, almost all for paper production. Some recent use of hurds in construction materials, though costlier to produce. According to Bioresource Hemp symposium proceedings, profits for producers are largely the result of government subsidies for non-food agriculture. ♦ Germany: With the recision of the Hemp Ban in 1995, Germany has planted approximately 346+ acres primarily for research purposes. A number of highly 5 No information cn law enforcement in other countries is included here because law enforcement is a national issue and ADC is not authorized to approach foreign governments. INOUSTPIPL HeAP S%CY I iB regarded scientific joumals and publications can be continually monitored to assess commercial success, although the scope is currently limited to demonstration level projects. The Nova Institute of Cologne (Karus and Leson 1995) has provided the most balanced and scientifically verified data to date on the issues of competitive processing, new technology and future production potential. German and Dutch production appears focused on textile manufacturing opportunities and constraints. ♦ The Netherlands: Together with Germany, Dutch scientists and researchers have started to develop a serious scientific base. Approximately 200 acres of project production have been identified for various research bases. There may be other acreage in production for export to French processing facilities. ♦ Spain: Unable to identify acreage; some paper production. ♦ Canada: 35 acres permitted by the Canadian government for various research projects. Focus appears to be oil/seed interests. ♦ United Kingdom: One source verified a 200+ acre research production base while Hemcore, a private company, planted 2,800 acres in 1995. Production is primarily research oriented with a focus on textile manufacturing. ♦ Australia: 16 acres permitted for crop experiments and testing; may be more considered for production. VI. HAWAII INDUSTRY ANALYSIS lNZUSTRN HEMP Sruov/20 Methodology. Knowledge was systemically organized and analyzed to assess critically the economic potential of a hemp industry in 'Hawai'i. Defined were constraints, actions to relieve constraints, and the probability of success of an economically viable and sustainable industry. The assessment analyzes the components of production, marketing, and consumption and the physical, biological, economic, social, and regulatory environments in which the industry would function. See Table 3. Information Sources. An extensive collation of information on hemp has been developed in the course of this study. A recent collation of science -based information occurs in papers presented at a 1995 Symposium and recorded in "Nova Institut (Hrsg.): Biorohrstoff Hanf - Bioresource Hemp, Reader zum Symposium, Frankfurt 2.3 - 5.3.1995." One presentation organized the information in a manner like that requested in HCR63, 1996. The reference to that presentation is - J.E.G. van Dam, Potentials of Hemp as Industrial Fibre Crop, inmova-Institut (Hrsg.) Biorohrstoff Hanf - Bioresource Hemp, Reader zum Symposium, Frankfurt -13-5.3.1995. Van Dam's Institute is one of the group of prestigous agricultural science institutions in Wageningen, the Netherlands. His presentation critically analyzes the industrial potential of hemp in terms of properties, market potential, bottlenecks, perspectives, and research needs. Information on the hemp parasite Javanese rootknot nematode, which probably is the greatest barrier to profitable industrial cultivation of hemp in Hawaii, was obtained from Donald P. Schmitt, a local and national authority on nematodes. Information on hemp breeding, cultivars and yields was obtained through published reports of Drs. Rumyantseva and Lemeshev of the Vavffov Institute for Research (VIR) in St. Petersburg, Russia, papers of H.M.G. van der Werf published by the International Hemp Association of Amsterdam and Bioresource Hemp Symposium, Ernest Small's paper entitled "A Practical and Natural Taxonomy for Cannabis," and a published interview with Ivan Bocsa, breeder of the Hungarian Kompolti strain of a monoecious cultivar. Other primary information sources on world market values, competition and infrastructure costs have been obtained through Internet search (Craig Crawford, Ecodesign Group, Canada), direct interviews with Danforth International and Weyerhauser, proceedings of the 1994/95 Conference of the Technical Association of the Pulp and Paper Industry, and ADC's national poll sent to state and territorial departments of agriculture. 4- O J1 y U y OI Y a L o o 3 ' O ° J Y : v= Y¢ p v c ! v Yo `'> E E v D u � 0 2 Y = m C Y w 3 m E s a 0 ° c `w d n LLI c v m= w o .a a v d o Y N Q D ON N a N U CEI Y N N C>I O d L L Y C > N Zi c O a d N n Y> N Y_ 3 c m= a c a o c m a E uui o 0 m A z i J m v L y E z ° m ut '° N t '^ d o m u= N -' n,m. N m v E p m e 3 c 'w E> o a, E c c c m v o u '—° i° o o ai u v m o v .S c N ai n 'g .v -- d N: E u m m m e .n -- a: .- n: N N Y ul m E E v > m d L Y: d: 3 d c m E L E v a vi d v u x o d Y Ym m m �' Y o: c o c N' o d d Y Y Y Y Y m U N m N h O 2 ¢ Y H J C3 y 5 `w c _ E 333 C : a 2 Q N N y N N N N O L O E L O C N Sl C U O N Y O O U a U! c o o y u v o m i u 0 m.m a. c M c a J z 3 0. u 3 z ! 9 o. i O L: o S. O o v x v: O o O: O a i 0 O W Z z Z N m L w C � O � � c J v i o w _v u a E f H E v v C N O L = > t L U N N U c m m a xi N m o v m; u `u o ': `c; v Z i v! 2. ------....... ................................... ........................ _ ............ O ............. Z i ....... z .............. i m ............. .................................. .............. o u� . .� E = M,c v a c N c E v v u i ia o rn a t L n V a Jo m In a i a c 3 c N� in 'c r w N EE i E`o i L w Q co C7 >I y i o m m o: E° c w E a a} >_ w `w v w 'o .9 m o = t 5 : i a N o c w _o` N m o a c cu- o' N p u M v a w a i z a:Inr E S °1 N 1O ° c -' o_ v c v a o m LL m; 3 c L S°m' = r rv? c' == 0_ n'u g- i v '° 5 w v J L v i 1a E m y¢ A c m 0`'N: '9; E v = J u v a �i i nv m o �,_u-..` = 'y yr E `w vi o�p' u 3? a; i E c v: 'v v. u K J o o v L ry c y N a ornt i m J v u o o o f °i o v t v w c E E: Z z: 2 r n N:U? =: w m i a - 'a i i o 3: [ ax;ri Fx:f 2 i W z m[ I o v i W z p N Z: a Q Y : O: i L i E2 'x Ci�° _ OZ 0Z K W. In P N ƒ § k:] \ :§\9 : \! }:/§ƒE; Xw \7%\ _{\ - §k%e )/2} )\ : :\C) § k:] \ ti } \ § § :§\9 : \! }:/§ƒE; ti } \ § § T 9 U � O N a � T � C T N F d d � d O p G � O J N p C � U Q N a c a i > u w � W c s .......:................................................... > m E _T N O 0_ d j J N N N O i y N i a a i N ....... ................................................... v v E c o+ y a W a v c o a c y m U ::E o N 0 v c o O i 0 0 W m 7 m a U v o O v pv m o E .= 0 o N O ap 0 L> ........................................................... Z `p m n E m c m � N N J C m 6 i y ~ E LL: U ai r; HO'JSTRI?L HEAP S-. uoY 125 INDUSTRIAL INFRASTRUCTURE CAPABILITIES Several crop trials on Kenaf have been conducted by the Hawaii Agriculture Research Center (formerly HSPA), and on private lands on O'ahu and the Big Island which have also been reviewed by CTAHR. Although trials may be reinstituted, recent experiments have proved inconclusive. Commercial interest, investment and application are inevitably linked to Hawai Ps strict land, water and environmental use permits. No large-scale commercial paper or textile manufacturing interests are presently operating or planned in Hawai i. Any study of processing for industrial crops would entail cost discoveries during an EIS. Although former plantations are zoned for agricultural/ industrial applications, most equipment (inappropriate technology in most cases) has been dismantled and would require a complete rebuild to accommodate any new industry. As noted in the Bioresource Hemp Symposium proceedings, most commercial level primary processing is done in People's Republic of China and Eastern Europe with antiquated machinery. New technological advances are under study for flax, kenaf and other fibers including hemp, although still primarily in a developmental stage in western Europe. ♦ Biomass operators - particularly potential Independent Power Producers (IPPs) would have an interest in any large scale industrial crop (including bast fibers) for biomass, and have been negotiating for some time with landowners and utility companies to establish Independent Power Production Agreements. At this writing they are not confirmed. None have indicated a preference for any one biomass crop, and restricted their comments to readily available current sources such as bana grass and energy cane. The state has reviewed plans for a paper recycling plant (using strictly recycled papers from the present waste stream) but has no conclusive investment or timeline. ♦ Wholesale or retail market interest: No commercial processing capabilities exist for bast fiber crops in Hawai'i. An informal telephone survey was made to large marine supply operations (Ala Wai Marine, West Marine, Eagle Hardware, Hilo Marine and Kilgo's). Only Eagle Hardware carries a small line of sisal cordage. Marine suppliers all indicate customer preference for synthetic fibers for marine uses. Paper suppliers (Zellerbach, Weyerhauser, Ingram, AMPACO and GBC) have some specialty vendor requirements for linen and flax papers, but do not stock hemp or kenaf papers. Animal/ pet feed suppliers (Pet Discount Warehouse, Pet Central, For the Birds, Del's Farm Supply) carry bird seed brands "Sun Seed" and "Pretty Bird" INOLSTRI L HEmp STUDY / 26 which do not list hemp seed as an ingredient. Business directory and telephone book listings show three retail operations - Hawaiian Hemp Company (Big Island), Island Hemp Cotton Co. &Island Hempware (Kauai) and The Hemporium (Maui). All three carry hemp -based textiles and paper goods, quantity unknown. Large clothing retailers (Liberty House, JC Penney, Sears) have no knowledge of hemp - based clothing lines in their inventory. Specialty retailers (Nature Store, Nature's Image) do not carry hemp products or report any customer demand. Oil extractors (kukui and macadamia nut) have no knowledge of hemp oil demand. ♦ Landowner interest: In general, landowners are not the actual developers of the agricultural projects on their lands, and concentrate specifically on attractive lease rents relative to the value of the crop. Lease rents are negotiated based on such values (see crop comparisons, item B). One landowner has dedicated 27,000 acres to eucalyptus production but has no investment plans for processing facilities at this time. Several landowners have made long-term commitments for diversified agricultural initiatives. One landowner (in response to a legislatve inquiry) indicated an expression of interest in industrial hemp if it overcame legal barriers and constraints. INDUSTRI L HEUR STUDY/ 27 W. CONCLUSION ADC has sifted through a wealth of information and attempted to present the facts in this study without taking a stand on the issue. VIII. TECHNICAL AND REFERENCE RESOURCES BIBLIOGRAPHY �NDQSTRI HeuR STUDY 128 Aguiar, Eloise, news ed. "Hempfest Focuses on Plant's 'Good' Uses." Windward Sun Press. July 18-24, 1996. P. B-5. Ballanco, Thomas J. "The Colorado Hemp Production Act of 1995: Farms and Forests without Marijuana." University of Colorado Law Review. Vol. 66, No. 4. 1995. "Bioresource Hemp." Technological -scientific Symposium March 2-5, 1995. Frankfurt am Main, Germany. B6csa, Ivan. Book review of Re -discovery of the Crop Plant Cannabis Marijuana Hemp (J. Herer, M. Brockers and Katalyse, Frankfurt, Germany, 1993, 463 pp.). Journal of the International Hemp Association. Vol. 1, pp. 59-60. 1994. Christie, Roger, and Aaron Anderson. "Legislators May Resurrect Hemp in U.S." Pacific Business News. December 16, 1996. Clapp, Roger. Vermont Department of Agriculture. 1996. Personal communication Collins, James. California Department of Agriculture. 1996. Personal communication Colorado Hemp Initiative Project Homepage. "National Farm Bureau Supports Industrial Hemp (press release)." Reno NEV. January 10, 1996. Commercial & Industrial Hemp Symposium and Trade Fair, Feb. 17-19,1997 Announcement. Vancouver British Columbia. Conrad, Chris. Hemp: Lifeline to the Future. Creative Xpressions Publications. Los Angeles CA. 1994. Crawford, Craig. "Highlights from the Kentucky Industrial Hemp Conference." Journal of the International Hemp Association. June 1996. Crucial Creations, 4550 South 12th Avenue #111, Tucson, Arizona 85714. 1996. Personal communication De Groot, Birgitte. "Chemical Pulping of Hemp Woody Core." In "Bioresource Hemp." Technological -scientific Symposium March 2-5, 1995. Frankfurt am Main, Germany. 3 PP. INDUSTRWL HEMP STUDY I 29 De Maever, E.A.A., and W. Huisman. "New Technology to Harvest and Store Fibre Hemp for Paper Pulp." journal of the International Hemp Association. Vol. 1, pp. 38-41. 1994. De Meijer, Etienne. "Diversity in Cannabis." In "Bioresource Hemp." Technological - scientific Symposium March 2-5, 1995. Frankfurt am Main, Germany. 5 pp. De Meijer, E.P.M. and H.M.G. van der Werf. "Evaluation of Current Methods to Estimate Pulp Yield of Hemp." Industrial Crops and Products. Vol. 2: 111-120. De Vries, F.P., M.J.F. Hendriks, A.B. Dronkers, and E. Dronkers. "1000 Tonnes of Dutch Hemp produced by Hemp -Flax B.V." journal of the International Hemp Association. Vol. 1, p. 57. 1994. Dempsey, James M. Fiber Crops. The University Presses of Florida. Gainesville FL. 1975. Pp. 46-89. Dicks, Michael R., Raleigh Jobes, Bob Wells, and Jun Zhang. "Kenai: A Potential Alternative Forage for the Southern Plains Stocker Cattle Enterprise." Current Farm Economics. Vol. 64, No. 3. September 1991. Eckman, Alyssa. "Cash Crops." The Lane Report. Central Kentucky. October 1996. Ecoresource Paper Inc. 111-1841 Oak Bay Avenue, Victoria, BC, Canada B8R 1C4. 1996. Personal communication FAO. "The Outlook for Pulp and Paper to 1995: Paper Products, and Industrial Update." Food and Agricultural Organisation of the United Nations, Rome. 1991. Fiber Physics and Biochemistry Research and Textile Engineering Research Units. "Utilization of Kenaf Fiber in Nonwovens." 1992. Frohling, Robert and Eric Staton. "Industrial Hemp: Dream or Legal Nightmare?" National Conference of State Legislatures Legisbrief. Volume 5, No. 2. Gates, Leon. Vermont Department of Agriculture. 1996. Personal communication Girouard, Patrick. "Insights of the French Hemp Program." Sustainable Farming. Vol. 5, No. 2, pp. 4-6. Fall 1994. Goloborod'ko, P. "Hemp Research and Growing in Ukraine." In "Bioresource Hemp." Technological -scientific Symposium March 2-5, 1995. Frankfurt am Main, Germany. 9 pp- INC USTRIPL HEMP STUDY/ 30 Government Bill. 1997 Colorado Industrial Hemp Bill (Draft 2). Government Bill. 1997 Missouri Hemp Production Act (Draft). Government Document. Vermont Hemp Bill. H.783. Art Act Relating to Industrial Hemp. Halbrendt, Catherine, Qingbang Wang, and Matthew Mole. "Alternative Agricultural Strategies in Vermont: The Case of Industrial Hemp." 1997. 19pp. Harrelson, Woody. "Harrelson On Industrial Hemp." Lexington Herald -Leader. Lexington KY. September 22, 1996. Hemp for Victory. USDA film. Washington DC. 1942. Hemptech. Industrial Hemp: Practical Products — Paper to Fabric to Cosmetics. 1995. Herer, Jack. Hemp & the Marijuana Conspiracy: The Emperor Wears No Clothes. HEMP Publishing. Van Nuys CA. 1990. 182 p. Honolulu Advertiser. "Industrial Hemp Is Weak Sister of Marijuana." April 30, 1996. Honolulu Star -Bulletin. "Feds Warn Docs Prescribing Pot" December 30, 1996. P. Al. Honolulu Star -Bulletin. "Material Possibilities: Proponents say the Weaker Industrial Hemp Should Be Legalized for .agricultural Production." July 23, 1996. P. Bl. Hudson and Harsch. "New Industrial Uses, New Markets for U.S. Crops: Status of Technology and Commercial Adoption." Prepared especially for Biobased Products Expc'92. St. Louis MO. 1992. Huisman, Willem, Eddy de Maever, and Ludger Frerichs. "Harvest and Storage of Hemp." In "Bioresource Hemp." Technological -scientific Symposium March 2-5,1995. Frankfurt am Main, Germany. 10 pp. Journal of the International Hemp Association. Interview with Dr. Ivan B6csa. JIHA. Vol. 1, pp. 61-63. 1994. Karus, Michael, and Gero Leson. "Hemp Research and Market Development in Germany: A Status Report for 1994." Journal of the International Hemp Association. Vol. 1,No. 2: pp. 52-56.1994. INDUSTRIAL HEMP STUCY / 31 Kenaf Intemational with Rio Farms, Inc. "Growers' Handbook for Kenaf Production: In The Lower Rio Grande Valley of Texas, U.S.A." McAllen TX. 1989. Kenaf Proceedings: February 5-7, 1992: Fourth Annual Intemational Kenaf Association Conference. Biloxi MI. February 28 -March 2,1991: Third Annual Intemational Kenaf Association Conference. Tulsa OK. Kentucky Bourbon County Farm Bureau's Industrial Hemp Resolution. Passed on October 10, 1996. Kinzer, Stephen. "German Industrial Hemp Ban Lifted." New York Times. November 12, 1995. Kilpinen, O. "Nonwood Specialty Pulps." TAPPI Pulping Conference 1992. TAPPI. Atlanta GA. 1992. Krotov, V. S. "Studies on Hemp Stalk and Shive Pulping." In "Bioresource Hemp." Technological -scientific Symposium March 2-5, 1995. Frankfurt am Main, Germany. 13 PP - Kugler, Daniel E. "Kenaf Newsprint: Realizing Commercialization of a New Crop After Four Decades of Research and Development (A Report on the Kenaf Demonstration Project)." United States Department of Agriculture. Cooperative State Research Service. Special Projects and Program Systems. 1988. Kurdin, Joseph A., consultant. "Kenaf Pulping Review." U.S. Department of Agriculture. 1991. Larsen, Dana. "Canada's Cannabis Farmers." Cannabis Canada. Pp, 31-33. Lawrence Serbin, Hemp Traders, 2130 Colby Avenue #1, Los Angeles, CA 90025. 1996. Personal communication Leson, Gero. Affidavit. Santa Monica CA. 1996. Letter to D. Danforth (Bolton Emerson Americas Inc.), conceming Hemcore Ltd. operations in UK, dated February 2, 1996. Letter to K.C. Robbins, dated August 4, 1993, by R.D. Plowman, Acting Assistant Secretary, Science and Education. NOUSTRIPL HEMP 3TUOY 132 Letter to Representative Cynthia Thielen concerning the North American Industrial Hemp Annual Meeting & Conference, November 7, 1996. Letter to Representative Cynthia Thielen concerning Canada, economic potential for hemp, dated August 1996, by Craig Crawford. Letter to Representative Cynthia Thielen concerning how legalizing the cultivation of hemp could add another agricultural opportunity, dated August 21,1996, by David H. McCoy, Chief Executive Director of The Estate of James Campbell. Lisson, S.N., and N.J. Mendham. "Hemp Research in Australia." In "Bioresource Hemp." Technological -scientific Symposium March 2-5,1995. Frankfurt am Main, Germany. 7 pp. Low, [an. "UK Hemp Production." In "Bioresource Hemp." Technological -scientific Symposium March 2-5,1995. Frankfurt am Main, Germany. 3 pp. MacKimmon, Malcolm. "The Navajo's New Hemp Nation." Hemp Times. MaGee, Audrey, Ireland corespondent. "Irish to Bum Hemp as Biomass Energy" 1996. Marcus, David. "Commercial Hemp Cultivation in Canada: An Economic Justification." Independent Study. Ivey Business School, University of Western Ontario. Western Ontario. 1996. Mayberry, Dean H. "A New Source of Paper Fiber." The World & I. 1988 McPartland, J.M. "Microbiological Contaminants of Marijuana." Journal of the International Hemp Association. Vol. 1, pp. 41-44.1994. Michka. 'Building with Hemp: A Report from France." Journal of the International Hemp Association. Vol. 1, pp. 50-51. 1994. Musto, David F. "Opium, Cocaine and Marijuana in American History." Scientific American. July 1991. Pp. 40-47. New Earth Limited Product Press Release. Contact: Paul Benhaim. Hemp 9 Bar—Hemp seed based snack bar. Barnet London. October 1996. 1996 Senior Kentucky Youth Assembly. Bill passed: "An Act to Legalize Cannabis sativa (hemp) for the Manufacturing of Paper Products, Textiles, Rope, Fuel and Clothing." NOUSTRIPL HEMP STUDY 133 Outram, Carol. "Hemp Is Happening here, in Canada, Parts I, II, III." Designews: The Newsletter of the Design Division. January to June 1996. Pan World Traders, P.O. Box 697, Santa Cruz, CA 95061. 1996. Personal communication Pate, D.W. "Chemical Ecology of Cannabis." Journal of the International Hemp Association. Vol. 1, No. 2, pp. 29,32-37. December 1994. Perkins, Jerry, ed. "Iowa Farm Bureau Supports Hemp? The Des Nfofnes Register. December 4, 1996: p. 10S. PreGlas Corporation. "Production of Moldable Fiber Mat from K -Bast Material Using Airlay Process." Technical Bulletin No. 90-2333. Troy Mich. 1991. Proceedings from the Association for the Advancement of Industrial Crops Annual Conference October 5, 1989. "Kenaf Research, Development and Commercialization." Peoria 11. Proceedings of the International Non -wood Fiber Pulping and Papermaking Conference July 11-14,1988. Beijing China. Pursglove, J.W. Tropical Crops: Dicotyledons 1. John Wiley and Sons. New York NY. Pp. 40-44.1968. Rawson, Jean M. "Growing Marihuana (Hemp) for Fiber: Pros and Cons." CRS Report for Congress. June 1992. Reichert, Gordon. "Government of Canada: Report on Hemp." Bi -Weekly Bulletin. Vol. 7, No. 23. December 16, 1994. Riddlestone, Sue. "Hemp Textiles in Britain—Opportunities for Bioregional Development." Abstract presented to the Industrial Hemp Conference in Toronto, Ontario, Canada, March 25, 1996. Riddlestone, Sue, and Bob Franck. "Hemp for Textiles.."In "Bioresource Hemp." Technological -scientific Symposium March 2-5,1995. Frankfurt am Main, Germany. 8 PP. Robbe, Hindrik W.J. "Marijuana Use and Driving." Journal of the International Hemp Association. Vol. 1, pp. 44-48.1994. Rosenthal, A.M. "While We Slept, Drug Legalizer Moved." Hawaii Tribune -Herald. 1996 HOUSTPVI HEPAP STUDY / 34 Rosenthal, Ed, ed. Hemp Today. Quick American Archives. Oakland CA. 1994. Roth -Li, Gertraude. "Industrial Hemp [Cannabis sativa]— Economic Viability and Political Concerns." Hawaiian Industrial Hemp Report prepared for Representative Cynthia Thielen. April 17, 1996. Rowell, Roger M. "Composites from Kenaf Fiber (Final Report)." USDA Forest Service, Forest Products Laboratory. Madison, WI. 1992. Rumyantseva, L.G., and N.K. Lemeshev. "Current State of Hemp Breeding in C.I.S." Journal of the International Hemp Association. Vol. 1, pp. 49-50. 1994. Shephard, Michelle. "He's a Fibre Hemp Pusher." Toronto Star. August 6, 1995. Silcoff, Sean. "Cannabis Goes Corporate." The Globe and Mail. October 1996. Small, Ernest, and Arthur Cronquist. "A Practical and Natural Taxonomy for Cannabis." Taxon. Vol. 25. August 1976. Somers, JR., John R. "Is It Pot Or Is It Not?" The Maryland Trooper, Summer 1991.Pp. 41- 43. Taylor, Charles S. "Using Kenaf Bast Fibers in the Manufacture of Fiber Mats and Molded Fiber Products (Final Report)." USDA, ARS, CSRS.1992. Tickell, Oliver. "Hemp Farming OK in the UK." New Scientist. August 19, 1995. Tiller, Frank M., K.D. Lin, and N.B. Hsyung. "Report on Kenaf as an Agent for (1) Absorbing Oil and (2) Acting as a Filter Aid." Chemical Engineering Department, University of Houston. Houston TX. 1992. Tolliver, Heidi. "Industrial Hemp Kicks Into Gear." Quick Printing Magazine. July 1996. U.S. Department of Agriculture. Agricultural Research Service. "Kenaf Paper: A Forest - Saving Alternative." Agricultural Research. Vol. 36, No. 9. October 1988. Van Dam, J.E.G. "Potentials of Hemp as Industrial Fibre Crop." In "Bioresource Hemp." Technological -scientific Symposium March 2-5, 1995. Frankfurt am Main, Germany. 18 PP. Van der Veen, Jan E. Harsveld. "The Effect of Age on Quality of Hemp Bast Fibres as Raw Material for Pulp and Papermaking." In "Bioresource Hemp." Technological - scientific Symposium March 2-5,1995. Frankfurt am Main, Germany. 6 pp. IR7USTRIPL HQAR STZY 135 Van der Werf, Havo. Crop Physiology of Fibre Hemp. PProefschrift Wageningen. Wageningen Netherlands. 1994. Van der Werf, Hayo. "Hemp Facts and Hemp Fiction." Journal of the International Hemp Association. Vol 1, No. 2: p. 58. 1994. Van der Werf, Havo, W.C.A. van Geel, and M. Wijhuizen. "Agronomic Research on Hemp (Cannabis sativa L.) in the Netherlands, 1987-1993." In "Bioresource Hemp." Technological -scientific Symposium March 2-5,1995. Frankfurt am Main, Germany. 8 PP. Van Roekel, Jr., Gertjan. "Chemimechanical Pulping of Fibre Hemp." In "Bioresource Hemp." Technological -scientific Symposium March 2-5,1995. Frankfurt am Main, Germany. 7 pp. Vinluan, Frank. "The Trouble With Hemp." Governing Magazine. October 1996. Wang, Hui -Min. "Hemp Research, Development and Concepts in China." In "Bioresource Hemp." Technological -scientific Symposium March 2-5,1995. Frankfurt am Main, Germany. 7 pp. Werber, Frank X. Applications and Processing of Kenaf Progress Report No. 2. USDA, ARS, NPS. 1992. Werber, Frank X, and Daniel E. Kugler. "Summary of Ongoing Kenaf Projects." USDA, ARS, NPS. 1992. Wirtshafter, Don. The Schlicten Papers. Ohio Hempery. Athens OH. 1994. Wood, Campbell. "Altema-Crop: Industrial Hemp Is Gathering Support." ACE Magazine. Lexington KY. October 1996. Wood, Elton. "USDA Resource Material on Coir, Abaca." 1988. Zurowski, Cory. "The Industrial Revolution, Part II." Cityviem. Des Moines IA. 1996. Legislative Testimonies House Bill Nos. 3289 and 3791, House Concurrent Resolution No. 63. and House Resolution No. 71 Written testimony is kept on file with the State Archives concerning House Bill Nos. 3289 and 3791, House Concurrent Resolution No. 63, and House Resolution No. 71 from the Eighteenth Legislature, Regular Session of 1996. iNousrRx Heap STOY i 36 House Bill Nos. 3289 and 3791 were heard by the House Agriculture Committee on February 12, 1996. House Concurrent Resolution No. 63 was heard by the House Agriculture Committee on March 21, 1996, the House Legislative Management Committee on April 4, 1996, and the Senate Agriculture, Labor and Employment and Ways and Means Committees on April 19, 1996. House Resolution No. 71 was heard by the House Agriculture Committee on March 21, 1996 and the House Legislative Management Committee on April 4, 1996. Federal, State, and Countv Agencies Agribusiness Development Corporation; Executive Director C. N. Lee - Neither support or opposed; Willingness to work with agencies named in bills County of Hawaii R&D; Economist Howard Nakamura - Support Department of Public Safety; Administrator Keith Kamita - Oppose Drug Enforcement Agency; Special Agent Sidney Hayakawa - Oppose Honolulu Police department; Narcotics/Vice Capt. Kenneth Tano - Oppose Legislative Reference Bureau; Acting Director Wendall Kimura - Neither support or opposed; Redirect agencies to do study State Department of Agriculture; Chair James Nakatani - Oppose State Attorney General; Attorney General Margery Bronster - Oppose Other Testimonies Jonathan Adler; Founder of Hawaii Hemp Cooperative - Support Matthew Archibald - Support Lauren Bjorkman; Agronomist - Support Roger Christie - Support Teddy Ginn - Support Mike Greenburg - Support Hawaii Drug Policy Options Group; Pamela Lichty/Donald Topping - Support Hawaii Honey House; Walter Patton - Support Hemptech; John Roulac - Support HIEDB/ RETA-H; Herbert Richards - Oppose Eileen Henry/ Michael Martin - Support Island Hempware; Peter Thielen - Support Kathryn Laurence - Support Drs. Jonathan and Patricia Mathers; Nutritionists - Support Shigemi Matsumoto - Support Ed Michel - Support Jerry Rothstein - Support Representative David Tamas - Support Representative Cynthia Thielen - Support Dr. William Wenner - Support Mary Youle; Technical Writer - Support INDUSTRIAL HEMP STUDY/ 37 APPENDIX A. HCR 63 .r1 Ir P LLl O J kn TO\I OK \\II m ; \\FLLI t \a. \R \I. KI DLSTR;C T R EPR E 1v TATIA ES —a,%OiT1 T.n 1\II\.E —IERR1 L CIIIV] ERIC (j HA\I AKA\\A 4th—ROBERT \ HERKES <In—% RGINIA ISBELL nm — DA\lD A. TARNAS MICHAELB \\HITE Vh—JOSEPH VI. SOL KI �m — BOB vAKASOvE tom— DAA 'ID\IORIHARA I Ir. — CHRIS H ALFORD ]•.h — BILLv K. S\\ AIN }m— EZR -AR KAvOHO Nin — BERTHAC KA\\AKA\II 19m—DA\IDD STEL\IACR ihw—GE\E\cARD- I'm—BARBARA MARL MOTO Wtn—BRIA\1' 14\IA\F 'Um — SCOTT K. S A I K I 'Li—\IAR\'-JA\E \la\ILRDO "_nu — TERR1 \L I \-OSHIN AGA Jru — ED CASE :4th—lI\I SHO\ '>m — KENN ETH T. HIRAKI 'Mn—QLENTI\ K. KA\\'A\A\AKOA ]'!h—SLZA\\E\ J CHL \OAKLAND _VJi — DENNIS A. ARAK.AKI 'Ili, — FELIPE P. ABI\SA\. JR. �0ih—ROA11'V1 CACHOLA li,—\ATHA\ SLZL'KI L'na—LE\\ARD1 PEPPER ;Ira—TOV OKAVLRA ;4t'n — K. MARK TAKAI aim— \OBORL YON A\II\E 'nih —RO\ \1. TAKL\II ;Ah — \ESTOR R. G.ARCIA 78th—SAV LEE 79th—RON VE\OR 4Nh — MARCUS R. OSHIRO 414—PACE T. OSHIRO 47nd— A\\ELLE C. A\I ARAL 4?rd—\IICHAELP KAHIKI\A um — %IER\rl-N S. JONES 45th — ALEXANDER C SA NTI AGO 46th—COLLEEN \IEl FR 471h—TERRA\CE%% H.TO\I 4vtn — KEN ITO 491h —Cl \THIA THIELEN- 50th — DEV'O\ \I. T. \EKOBA 514 — EFE G. ANDERSON `\Imnnn 4ader -'\Imantr Fkxir Leader NOOSTRIAL HEMP S T OOY118 OUSE OF REPRESENTATIVL THE EIGHTEENTH LEGISLATURE STATE OF HA\\ All ST\TF CAPITC'L HOAOLLLC. HANAC `111� April 25, 1996 Chin Lee Director Agribusiness Development Corp. 1800 East-West Road Honolulu, Hawaii 96822 Dear Mr. Lee: I transmit herewith a copy of House Concurrent Resolution No.63 HD2, which was adopted by the House of Representatives of the Eighteenth Legislature of the State of Hawaii, Regular Session of 1996. Very respectfully, 1 ^� jeX,: a Mau -Shimizu House of Representatives y _m9 InousrRv H=ea S7 -'OY09 STAND. COM. REP. NO. /6 2 y051 -t Honolulu, Hawaii , / , 1 9196 RE: H.C.R. No. 63 H.D. 2 Honorable Josemh M. Souki Speaker, House of Representatives Eighteenth State Legislature Regular Session of 1996 State of Hawaii Sir: Your Committee on Legislative Management, to which was referred H.C.R. No. 63, H.D. 1, entitled: "HOUSE CONCURRENT RESOLUTION REQUESTING THE LEGISLATIVE REFERENCE BUREAU TO CONDUCT A STUDY ON THE ECONOMIC POTENTIAL, PROBLEMS, AND OTHER RELATED MATTERS OF GROWING NONPSYCHOACTIVE INDUSTRIAL CANNABIS HEMP AS AN AGRICULTURAL PRODUCT IN HAWAII (AMENDED TITLE)," begs leave to report as follows: The purpose of this concurrent resolution is to request the Legislative Reference Bureau (LRB) to conduct a study on the economic potential, problems, and other related matters of growing nonpsychoactive industrial cannabis heam as an agricultural product in Hawaii. The Convener of the Hawai'i Drug Policy Options Group and two testifiers submitted testimony in support of this concurrent resolution. The County of Hawaii submitted comments, indicating that it would be supportive of this measure if the measure were to assess hemp's potential as a food, fuel, and fiber source. Comments were submitted by LRB and an interested individual. Testimony in opposition to this concurrent resolution was received from the Department of Agriculture (DOA) and the Department of Public Safety (PSD). Upon consideration, your Committee has amended this concurrent resolution by: HSCR LMG HCR63 HD2 ,^v USTR-P H_IP Q%OY/4O STAND. 20M. RE-=. NO. G T Page 2 (1) Re= -,es -..'ng the Agribusiness Development Corporation (ADC), rather than LP3, to: (a) Conduct a study on the economic potential, problems, and other related matters of growing nonpsychoactive industrial cannabis hemp as an agricultural product in Hawaii; and (b) Submit a report of its findings to the Legislature prior to the 1997 Regular Session; (2) Changing the title of the concurrent resolution to read: "HOUSE CONCURRENT RESOLUTION REQUESTING THE AGRIBUSINESS DEVELOP= CORPORATION TO CONDUCT A STUDY ON THE ECONOMIC POTENTIAL, PROBLEMS, AND OTHER RELATED MATTERS OF GROWING NONPSYCHOACTIVE INDUSTRIAL CANNABIS HEMP AS AN AGRICULTURAL PRODUCT IN HAWAII_"; (3) Specifying that in conducting the study, the ADC is to: (a) Work in conjunctiva with the Department of Business, Economic Development, and Tourism, the Department of Agriculture, the University of Hawaii College of Tropical Agriculture and Human Resources (CTAHR), and LRB; and (b) Set forth problems, barriers, and concerns involved in the development and creation of an industrial hemp industry in Hawaii, including the potential of developing and creating this industry in Hawaii; (4) Deleting the other specifics of what the study is to include; and (5) Requesting that certified copies of this concurrent resolution be sent to the Director of ADC, the Director of Business, Economic Development, and Tourism, the Interim Dean of CTAHR, and the Director of LRB. As affirmed by the record of votes of the members of your Committee on Legislative Management that is attached to this report, your Committee concurs with the intent and purpose of H.C.R. No. 63, H.D_ 1, as amended herein, and recommends its adoption in the form attached hereto as H.C.R. No. 63, H.D. 2. HSCR LMG HCR03 HD2 STANL COM Page 3 Respectfully behalf of the Committee 0- Management, rManagement, h+ousraiuHea:"�uqv/aa 1 REP. NO. i submitted on members of the Legislative Elk KANOHO, Chair HSCR LMG HCR63 HD2 HOUSE OF REPRESENTATIVES EIGHTEENTH LEGISLATURE, 1996 STATE OF HAWAII 'ICJSTRA HEAP _-_CY/.12 H,C.R, NO, H,,D.2 HOUSE CONCURRENT RESOLUTION REQUESTING THE AGRIBUSINESS DEVELOPMENT CORPORATION TO CONDUCT A STUDY ON THE ECONOMIC POTENTIAL, PROBLEMS, AND OTHER RELATED MATTERS OF GROWING NONPSYCHOACTIVE INDUSTRIAL CANNABIS HEMP AS AN AGRICULTURAL PRODUCT IN HAWAII. 1 WHEREAS, in the State of Hawaii, tens of thousands of acres 2 of land that was formerly in sugarcane production now lies 3 -allow, with immense economic opportunities for growing 4 diversified crops, including industrial cannabis he_=. ; and 5 6 WHEREAS, industrial cannabis hemp is a renewable natural 7 resource for the manufacture of fiber, pulp, paper, oil, paints, 8 sealants, fuel, and food; and 9 10 WHEREAS, cannabis hemp fiber can be manufactured to produce llfine linen and very durable work cloth, as well as heavy canvas, 12 twine, cordage, and rope; and 13 14 WHEREAS, in 1942, the U -S_ Department of Agriculture carried 15 out a nationwide effort to encourage farmers to grow cannabis 16 hemp for the war effort, which resulted in thirty-six thousand 17 acres being planted in seed hemp that year; and 18 19 WHEREAS, the U.S. Department of Agriculture promoted 20 cannabis hemp as producing four times as much pulp than trees for 21paper production; and 22 23 WHEREAS, there are strains of cannabis hemp that can be used 24for fiber and fuel production which contain low percentages of 25 THC (tetrahydrocannabinol), the mind -altering compound, thereby 26 rendering it nonpsychoactive; and 27 28 WHEREAS, several foreign countries, including Australia, 29 England, France, Canada, and China, currently allow industrial 30 agricultural production of cannabis hemp in all or part of their 31 countries ; and 32 33 WHEREAS, U.S. President Bill Clinton's recent Executive 34 Order 121, dated June 7, 1994, Part IX General Provisions (a) 35states that cannabis hemp is a strategic food source; and HCR63 HD2 Page 2 IIQUSTRv Hong STuDr/43 H.C,R. NO. H.D.2 1 WHEREAS, a pilot project for agricultural research on 2 industrial he_-= has been carried out with official government 3permission in Imperial Valley, California; and 4 5 WHEREAS, the growing of cannabis hemp in the United States 6 is allowed only by federal permit, and currently three states 7 have permits pending to grow industrial cannabis hemp in their 8jurisdictions; and 9 10 WHEREAS, Hawaii needs to be able to respond to requests from 11Hawaii citizens for the production of industrial cannabis hemp; 12 and 13 14 WHEREAS, these requests must be handled by the State in a 15 way that will not violate Penal Code prohibitions on the 16 commercial promotion of marijuana; and 17 18 WFEREAS, a University of Hawaii at Hilo -sponsored forum on 19alternatives to sugarcane concluded that cannabis hemp should be 20 evaluated as an option; and 21 22 WHEREAS, the Mayor of Hawaii County has publicly stated his 23 desire to establish a pilot project for the agricultural 24production of cannabis hemp for fuel and fiber purposes, as an 25 alternative to the production of sugarcane; now, therefore, 26 27 BE IT RESOLVED by the House of Representatives of the 28 Eighteenth Legislature of the State of Hawaii, Regular Session of 291996, the Senate concurring, that the Agribusiness Development 30 Corporation (ADC), in conjunction with the Department of 31Business, Economic Development, and Tourism; the Department of 32 Agriculture; the University of Hawaii College of Tropical 33 Agriculture and Human Resources (CTAHR); and the Legislative 34 Reference Bureau (LRB); is requested to conduct a study on the 35 economic potential, problems, and other related matters of 36 growing nonpsychoactive industrial cannabis hemp as an 37 agricultural product in Hawaii; and 38 39 BE IT FURTHER RESOLVED that in the study, the ADC is 40 requested to set forth the problems, barriers, and concerns 41involved in the development and creation of an industrial hemp 42 industry in Hawaii, including the potential of developing and 43creating this industry in Hawaii; and 44 45 BE IT FURTHER RESOLVED that the study be intended for fact - 46 finding and information -gathering purposes; and HCR63 HD2 Page 363 NOUSTRIPL HEW Siuor/44 H.C.R. I VO. H.D.2 I BE IT FURTHER RESOLVED that the ADC submit its findings to 2 the Legislature no later than twenty days before the convening of 3 the Regular Session of 1997; and 4 5 BE IT FURTHER RESOLVED that cer=ified copies of this 6Concurrent Resolution be transmitted to the Director of ADC; the 7Director of Business, Economic Deve lonment, and Tourism; the 8 Chairperson of the Board of Agriculture; the Interim Dean of 9 CTAHR; the Director of LRB; the Director of Public Safety; the 10 Administrator of the U.S. Drug Enforcement Administration; the 11Attorney General; the chiefs of police of the various counties; 12 and the President of the Hawaii Farm Bureau Federation. 1 C� oersov cemty they Me-•.�ar�r. aoc:�:r:�o.: is a iuc. •run a:.0 ccrrxt ccp, of . ;c p;Igmal an tda in i crit dark House of Reoi�' =mares 1 r.�tv cf Hawaii HCR63 HD2 INDUSip AL HEMP S acv / 45 APPENDIX B. NATIONWIDE POLL CONDUCTED BY AGRIBUSINESS DEVELOPMENT CORPORATION IHDUSTRIP HEMP STUDY/4B AGRIBUSINESS DEVELOPMENT CORPORATION 235 South Beretania Street, Rm. 303, Honolulu, Hawaii Tel: (808) 586-0186 Fax: (808) 586-0189 August 1, 1996 To: Commissions, Departments, Directors of Agriculture (nationwide) From: Robert Sutherland, Chair, ADC - Hawaii Re: Hawaii State Concurrent Resolution HCR#63 Relating to Industrial Hemp - 1996 Legislative Session The attached Resolution calls for an unfunded studv of the economic potentials, problems, barrier=_ and other related matters concerning potential production of non -THC industrial hemp in Hawaii. The compilation study_ has been ordered from the agribusiness Development Corporation (ADC - Hawaii) with support from the state's Department of Agriculture, Business & Economic Development, 'University resources and the Legislative Reference Bureau. ADC is an affiliated public/private partnership agency engaged in redevelopment of former sugar plantation assets to meet the challenges of diversified agricultural initiatives and opportunities. The referenced resolution drew substantial ' terest from advocacy entities as well as federal, state and county officials. In order to provide the legislarare with an objective body of knowledge within our limited resources, we are conducting this outreach effort nation«?de to obtain a "latus snapshot" of current administrative or legislative initiatives :elating to industrial hemp. We would appredate your "kokua" (help and assistance) in completing the attached survey form, and returning it at your earliest convenience. As noted on the form, if your state has a current political action or legislative study related to this subject, we would appreciate receiving notice of costs involved, and a copy of the study itself. If there are further CURRENT state, county or university based activities, —,lease advi=_e. Thank you for your consideration and assistance. Please feel free to contact Keith Yabusaki further on this matter at 308-386-0186. for the Chair, Agribusiness Development Corporation iNOUSTRIAL HEMP SiJw/47 AGRIBUSINESS DEVELOPMENT CORPORATION 235 South Beretania Street, Room 303, Honolulu Hawaii 96813 Tel: (808)586-0186 Fax: (808) 586-0189 Fk1FRrsr%TTW-1Mi'• •T ' ! • c !_ ' • • • ! f • •• • 601RUM• IMIN Name of Respondent: --------------------------- Agencv Address /Tel/ Fax --------------------------- State --------------------------- 1. Has your state lesislature introduced legislation (bills or resolutions) relating to production of industrial hernp during the last 2 years? YES (Bill/Reso # ) NO 2. If your answer is YES to Question 1, khat is the CURRENT status of that Bill or Resolution? 3. Mav we obtain a copy of any legislation that has passed? _ (Attach if possible, or we will conzac: you for FOB mailing) 4. Has your state administration instituted or completed any study on Industrial Hemp production? YES NO (If yes, may we obtain a copy of the study, or executive summary of findings? Attach if possible, or we vill contact your for mailing). 5. Has your denartment, state or legislature ordered any study on economic potentials of any bast fibers? (Kenai, crotaleria, sunn hemp, manila hemp, flax, etc.) YES NO 6. If ves, please summarize vour findings below. (We will contact you for hard copy of any related study, especially- for technical detail and industrial implementation capabilities.) PLEASE COMPLETE BOTH PAGES AND RETURN TO ADC/1-808-586-0189 91 ?.%STMP HEMP 37IAYl48 DEPARTMENTS OF AGRICL-L.TLiRE FAX POLL - Industria! Hemp - Pg. Two 7. Have any of your universities developed studies on industrial hemp and/or other bast fibers? YES NO If YES, please provide a point of contact, telephone,"fax 8. If any industrial hemp/bast fiber production is in place or con-emplated, please provide the exact location and acreage 9. Please comment on your industrial infrastructure and proces=sing facilities relative to production of industrial hemp or other bast fibers 10. Do you have large paper or textile manufacturers in operation? If yes, please provide points or contact, telephone and fax numbers 11. Are you aware of any expressed interest or commitment by manufacturers in large scale domestic production o: industrial hemp or other base fibers? YES NO 12. Are you aware of any expressed interest or commitment by clothing/footwear/luggage manufacturers in domestic production of industrial hemp or other bast fibers? YES _ NO 13. Can you provide an approximate volume and value of industrial hemp (cloth, paper, seeds or other products) imported into your state? _ 14. Please comment on your state's position on the economic potentials, barriers and constraints for industrial hemp 15. Please comment on your state's law enforcement position on the production of industrial hemp MAHALO NUI LOA!! Please return this fax poll to ADC at 1-808-586-0189. Use attachment sheets if necessary, and provide your contact information. u �' § \- (\° :�::::�:�:::::�):::::::::::� )\\\\\ .......... ! /\> ::��:::::::::%£r )\\\\\ .......... ::��:::::::::%£r :aaa4\ :&;2££$af2$/tef2,:::`®t:aa»@%%$$; \ /a@$\\j\//ƒ$$\$tt£ƒ$/ftƒƒ$! -- - INDUSTRIAL HEMP STUDY/ Yl APPENDIX C. LETTER FROM LEROY 0. LANEY, PH.D., ECONOMIST, FIRST HAWAIIAN BANK (Received December 19, 1996) !uousraX HEYa S-_cr152 . First Hawaiian Bard{ c � Sox 3200-aaea. 9._t7 Lir. Leroy O. Laney Semcr voce ?revicent ,,_efF cmis" To: Chair, Technical Resource Committer ADC Study on Cultivation of Industrial Cannabis Hemp in Hawaii Subject: Comments on INDUSTRIAL HEMP STUDY - DRAFT 3 I have reviewed the subject draft as requested. Evidence presented therein seems convincing that industrial hemp (defined as having only a negligible content of tetrahydrocannabinol THC, the psychoactive agent in marijuana) does not have economic promise for cultivation in Hawaii. Apparently hemp once was profitable in some locations, because it was widely cultivated historically. Cultivation success even then was mainly in temperate and not tropical climates, however. Now, the world market demand is much smaller because of the introduction of other natural as well as artificial fibers. On the supply side, data on world production is sketchy. But what production there is seems to be concentrated heavily in low cost areas. This would put Hawaii at a distinct disadvantage. Industrial hemp does not seem to generate significant private sector entrepreneurial or venture capital investment interest. And subsidy of such a crop in Hawaii's tenuous fiscal comate today seems especially unwise. (The report does cite 4,000+ internet information sources on this subject, which evinces substantial interest of some kind. Yet it is highly likely these are mostly advocacy -oriented, anecdotal references linked to legalization initiatives for THC marijuana.) I am not aware of any significant Hawaii landowner interest in leasing land for hemp cultivation. If there is any, it will have to refute evidence presented in the Comparative Crop Economics table on page 16 of the draft. This table estimates gross revenue per acre per year of hemp cultivation at 5280-5650. The next highest crop on the list is sugar at $2,500. Given sugar's recent track record and projected future, these numbers are not encouraging for hemp. Hemp's revenue estimate would have to be underestimated by at least a factor of 4 in order to show any promise. Otherwise, we should just stay in the sugar business and stick with the devil we know. Ironically, it is only the psychoactive variety of cannabis that passes economic muster. Cultivation of that, however, is illegal. So any such cultivation in Hawaii is likely to remain in the "underground economy," such as it isj 0 0 FRANK P. SU'A, JR. WESTERN STATES INFO NETWORK 1060 RICHARDS STREET ROOM 10-081 HONOLULU HI 96813 INDUSTRIAL HEMP: GLOBAL MARKETS AND PRICES Valerie L. Vantreese January 1997 z,trccm� o� El.FOFCEtd,EPf� 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 uky.edu € 0 (3 :, INDUSTRIAL HEMP: GLOBAL MARKETS AND PRICES Valerie L. Vantreese 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 fiustrate renewed hemp production in the US. Others believe that the industrial hemp industry 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 Former 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 yam). 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. Table of Contents I. Introdt ction..............................................................................................Page I II. Executive Summary ..................................................................................Page 1 III. List of Figures..........................................................................................Page 3 IV. 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 White Paper 3. American Fane 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 D{. Conclusions.............................................................................................Page 30 PA III. List of Figures 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 the US were gathered from the US Bureau of Census. Both sources should be acknowledged. Page World Hemp Fibre and Tow Yield (select years; 1970-95) 5 World Market Share: Hemp Fibre and Tow Production (1996) 8 World Hemp Fibre and Tow Production (1961-96) 8 World Hempseed Production (1961-96) 10 World Market Share: Hempseed Production (1996) 10 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 Fars 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 the US were gathered from the US Bureau of Census. Both sources should be acknowledged. IV. INDUSTRIAL HEMP Definition Cannabis sativa 1. includes both industrial hemp and marijuana. Cannabis is a bast or long fiber plant containing variable concentrations of tetrahydtacannibol (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 1% THC. Cannabis produced for drug use is most commonly termed marijuana. Since 1980, THC levels of confiscated marijuana in the US have averaged between 3-4%; other sources claim marijuana has an average potency of 5-15% 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 all containing less than 0.3% THC (consistent with EU regulation). Some have suggested that that limit be increased to less than I% 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 further breakthroughs in seed genetics that might appease hemp opponents and allow the French to further comer the certified hempseed market). Ongoing varietal research is also conducted by the International Hemp Association. The ERA (based in Amsterdam, Holland) and the Vavilov Research Institute (St. Petersburg, Russia) have preserved nearly 400 types of cannabis seeds. 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 V1RAHA Cannabis Germplasm Preservation project is seeking additional funding 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 lower 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 useful 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 ,e : apacity to grow in a multitude of different climates, altasnes, 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 uniformity, 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 corn 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 feet tall in 3 to 4 months time (with a full range of 6-16 feet), with very little 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 yam, twine and stuffing.) As expected, some yield variability exists across countries: over the last five years hemp fiber and tow yields have averaged 1,103 lbs/ac in China; Russian Federation 788 lbs/ac; France 570 lbs/ac; and India 532 lbs/ac. Yields are lower in France since most French production is for the seedstock industry. 10 0 World Hemp Fibre and Tow Yield Thousands 70 75 80 85 90 95 HGMA) 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 existing baling machinery, but can be very rough on equipment because it easily wraps around the cylinder since most machinery is not customized to harvesting h--mp. Harvesting hemp can also prop ace large amounts of dust and workers should wear prot. ^ton 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), hurds (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 cost§. 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 $15/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, due 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 normal demand of other major grades of paper, such as newsprint. Hurds Approximately 70-80% of the stalk is composed �, FI urds or the woody inner portion. Essentially, hurls are the by-products of extracting the bast fibers from the stalls. Hurds 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 fuel 70% 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 lower 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, com). 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 pulping process may 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). VI. WORLD SITUATION 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 industrial 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) China Soo loo 300 zoo 100 0 World Hemp Fibre and Tow Production 6165 70 75 76 77 78 79 80 8182 83 84 85 86 87 88 89 90 9192 93 94 95 96 roto 8 The European Union subsidizes the cultivation of renewable crops (such as hemp and kenaf) primarily for research plmrposes. Industrial hemp production has been subsidized in the European Union since at least '983 and is cultivated on over 24,000 acres in France, Spair. E .ustria, 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 in 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 permits hemp cultivation with some restrictions. In addition to the production subsidies given to European Union producers, the Romanian government also subsidies 50% 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 tinder such growing conditions. Hemp production in the Ukraine has fallen by over 150,000 ha since the 1950'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 requirements. Similar conditions exist in South Wales and Tasmania Interestingly, opium poppies are cultivated in Tasmania, so the infrastructure 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 plan, no parts 0 of the plants can be sold and monitoring expenses must be paid by the farmers. In 1995, seven groups were granted licenses, including joint efforts between privy+.e industry, academia and the gove-l7 lent. Historically, US hemp production virtually stopped at the end of the 19th century due to foreign competition (particularly 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 $1.00 per ounce on all hemp transactions. Production restrictions were eased 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 sativa 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 around 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 market share. France (which dominates low -THC seedstock production) and Pakistan are also significant producers. 120 100 80 60 40 20 0 World Hempseed Production Thousands 61 65 70 75 76 77 78 79 60 81 82 83 84 85 88 87 88 89 90 91 92 93 94 95 96 World Market Share: Hempseed Production (1996) China 70.5% 10 2.8% 1% 3.3% World Trade The principal suppliers of hemp to the world inch pie China (where hemp cultivation has never been illegal and labor 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$5 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 El 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. 18 16 14 12 10 8 6' 4 2 0 World Hemp Fibre and Tow Major Exporters (1995) ($1.000) Switzerland 17.0% ($820) Bel -Lux 1! ($733) Romania 13.0% ($626) Million US$ China 18.3% ($881) ler 12.0% ($581) and 3.6% ($176) USA 9.3% ($449) Germany 11.6% ($560) World Hemp Fibre and Tow Exports 61 COW 65 GOO? NO M 71 nn 747576n76790$1 V 83" ON VN 09 WSJ 920 W 95 11 1 On the import side, major world buyers include the United Kingdom, Germany, Italy and Belgium -Luxembourg. Given the gmwth in the hemp processing industry, the members of the EU (with a 70% world import maz.'•el share), appear to be importing raw hemp from Eastern Europe and the FSU for further processing in western Europe. (Note: Unlike exports, import statistics are measured 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 significant portion of import values, particularly for bulky products.) World Hemp Fibre and Tow Major Importers (1995) ($1,000) Bel -Lux 7 ($689) Germany 11.9% ($1041) lain 4.8% ($417) UK 26.0% ($2279) her 30.7% ($2683) 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). 25 20 15 10 World Hemp Seed Exports Mil USS Thousand Mr ...,u..wwa,ww AnT3nu„DTDnww GwwwwO Ywwtl QOww (USS) QUM*(Wmn 12 25 20 15 10 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) France ($1233 Netherlands ($3321) 50.4% Bei -L= ($1023) 15.5% 104) 1.6% ($149) 2.3% 62) 2.5% i02) 9.1% World Hemp Seed Major Importers (1995) ($7.000) Netherlands 31.1% Bel -Lux 13 ($2110) Spain 8.1% UK 6.81 ($1053) Austria 8.6%Japan 6. ($1019) ($) 13 Other 17.1% ($2643) 5.1% US Imports It it 1t gal to import industrial hemp into the United States. In -e, ;eral, 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 shoes) 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 ($426) Hungary ($62) 9.6% Total 1995 US Imports: $645,000 $4) 0.6% ($25) 3.9% $30) 4.6% rador ($49) 7.6% ($51) 7.9% China and the Philippines are the largest suppliers of raw or processed hemp (not spun) to the US, with over 800/o of the market. Other players include Belgium, Switzerland and other 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 70 60 50 40 30 20 10 0 True Hemp, Raw or Processed But Not Spun US Impor•s 1993-1996e Thousands $ 1993 1994 1995 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. (In 1995, raw Hungarian hemp supplies may have been diverted to the EU for processing, before being re-exported to the US.) 25 20 15 10 5 0 Yam of other Vegetable Textile Fibers: True Hemp: US Imports 1993-1996e Thousands $ 1993 1994 1995 1996e Poland MChins WHungary MOther 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 law 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 research 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 1996 legalizing 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 industrial 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, Masonite and Inland Container Corporation) have expressed interest in hemp as an alterative fiber source. 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 acnes for agricultural, commercial and scientific research, with that amount increasing 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 iGl THC, the nation's full tribal council met last July to ascertain whether tribal law should be modified to permit the cultivation c°industrial hemp. This is a very interesting case in that Indian nations are semi-sovereigt it the US. USDA White Paver In 1995 the US Department of Agriculture released a 3.5 page white paper Industrial Hemp and Other Alternatives for Small -Scale 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 modem 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 or 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 Farm Bureau In January 1996, at their annual convention, the American Farm Bureau unanimously 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 further 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 endorst.-tcnt 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. Drug Enforcement Agency 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 sativa 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, 24-hour guards, an alarm system and limited, controlled access) and detailed records concerning stored or cultivated cannabis. Kentucky Governor's Task Force on Hemi) and 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 force, 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 production, this advantage has diminished. For hemp to become a large scale crop, significant research must be done in varietal selection, 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 $60/ton would probably be required to interest most producers; this price might preclude extensive competition in this market." 18 Legal issues remain the greatest obstacle to industrial hemp production, both at the state 'And at the federal level. Further progress on agronomic res arch, infiastructure needs and aarketing is moot until the legal issues are resolved. The Final Report 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. Kentucky Attitudinal Survey In Spring 1995, the Kentucky Hemp Growers Cooperative Association, 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 legislation, 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, education, 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 findings. 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" fairly closely. In an editorial 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." M First Annual Industrial Hemp Conference The conference, an invitation -only affair, was held in I. exington, 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 surrounding industrial hemp. (The designation "First" has been debated) Kentucky Proposed 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, regardless 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 the 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 infrastructure 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 may be 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 European 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 minimizing transport distance between processing centers (at least first stage) is advantageous. If growing licenses or permits art 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 co.•ai terably depending on a complex array of factors: produce% 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 per 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 been 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 $65.23 /ton $55.91 /ton $48.91 /ton Seeding rate @70 kg/ha $83.21 /ton $69.34 /ton $59.44 /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). Yields 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 Require& 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 Seeding rate @15 kg/ha 1 $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 bs oil content. Jeyasingam rL,rots average yields of 19.24 bu/ac. After a few years of cr._tiration 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 stalls, 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 "leftover" stalk assuming varying seed and stalk yields: Break -Even Price for Stalk When Growing Seed and Fiber (US$/ton) Price/bushcl (for hempseed) Low/Low: 14.3bu/2.5t Low/Med: 143bu/3.0t Med/low 19bu/2.5t Med/Med: 19bu/3.0t $3.67 $48.82/t $40.68/t $41.91/t $34.93/t $4.41 S".62/t $37.18/t $36.32/t $30.27/t $5.15 $40.41/t $33.68/t $30.74/t $25.61/t $5.88 $36.21/t $30.17/t $25.15/t $20.96/t Note: All prices are in US$ 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-even 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 further 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. 22 Australian farmers estimate that it costs US$240/ton to grow and harvest hemp, including irriga+ion and storage costs. The following section looks more c.osely at market prices, to follow the lu k 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 fanners. It is this authors contention that such information 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-term 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 $1.88/kg in 1995. However, substantial variation exists amongst countries. For the major suppliers, average export prices are as follows: Average Hemp Fiber and Tow Export Prices (1995, US$) Country Price/!b Price/kg Price/mt Switzerland $8.09 $17.83 $17,826 Germany $6.87 $15.14 $15,135 Italy $3.40 $7.50 $7,500 Belgium -Luxembourg $2.58 $5.68 $5,682 China $1.58 $3.48 $3,482 United States $0.67 $1.49 $1,487 Poland $0.42 $0.92 $917 Romania $0.32 $0.70 $695 Croatia $0.15 $0.33 $334 Hungary $0.07 $0.15 $148 World Average $0.85 $1.88 $1,882 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 con• modity and transportation costs to move the commodity from the point of production to the r o nt of exit from 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. 0.8 0.9 0,1 02 0 91 World Hemp Fibre and Tow Export Prices 1981-1995 92 83 94 65 M e7 M 99 90 91 92 93 94 95 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") 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 CIF values (which includes the price of the good, shipping costs and insurance to deliver the product to a US port of entry), imported hemp prices averaged $5.07/kg in 1994 and $5.12/kg in 1995. (CIF 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 .SuppHers 1995) Country Price/bu Price/lb Pnce/kg Price/m. Netherlands $16.10 $0.35 $0.78 $783 Belgium -Luxembourg $17.02 $0.37 $0.81 $811 France $22.08 $0.48 $1.05 $1,046 Germany $11.04 $0.24 $0.53 $534 World Average $18.86 $0.41 $0.90 $898 The volatility in hemp seed export prices can be seen in the graph below. China entered the world hemp seed market in 1986, tripling world trade and depressing world prices by half. In 1991, China ceased exporting hempseed and prices nearly doubled in 1992. In 1995, world export volume fell by 13%, while seed export prices almost doubled from 23 cts/lb in 1994 to 41 cts/lb last year. It is very possible that the surge in interest in industrial hemp has increased the demand for seed stock for planting purposes, thereby raising export values (rather than an increase in world hempseed demand for crushing purposes.) 0.5 0.4 0.3 02 0.1 0 Worid Hemp Seed Export Prices 1981-1995 China begins exporting seed in 1986. world trade increases 3-5x until China oeases exporting in 1991 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 In addition to UN/FAO data, other sources have reported observed hemp prices. In an attempt to summarize reported prices, the following table was compiled Average world price does include some degree of storage, assemblage, transportation and perhaps grading costs to move the raw product from the point of production to the point of exit from the country. Given the bulkiness of hemp fiber, transportation costs are significant and extreme variability persists in country - specific export prices. Many western European countries do some partial -processing prior to export to minimize transportation costs, hence their higher export values. Prices for EU producers include a government subsidy of approximately US$ 100/ton for hemp. 25 Estimated Hemp 1 -rices and Revenue from Various Sources (US$) Commodity US$/unit Est Yield Est Revenue Notes Source Fiber $1137 / ton $1882 /ton Avg. World Price - `94 „ `95 8 Whole Stalk $49-78 /ton 2.5-4 ton/ac $123-312 /ac break-even price; bast fiber yield 7 Raw Stalk $44-55 Ron 2.8-6 ton/ac $124-331 /ac defoliated chopped stalk 6 Whole stalks $200 /ton Air-dry, min. price 1 Fiber Hemp $100 /ton 8 tons/ac $800/ac 2 Dry Stems $125 Ron 16% moist; 1994 4 Raw Fibers $566-647 /ton .36-1 t/ac $204-673/ac textile and cordage 6 Dry Fibers $800 /ton 1.1-1.4 Vac 20% moist 94/5• 5 Bast Fibers $630 /ton Air-dry, min. price 1 Hurds $44-55 /ton 2.8-4.8 Vac $124-265 /ac pulp and paper, `94 6 Dry Hurds $40 Ron 4.2-5.7 Vac $168-228 /ac 20% moist 94/5' 5 Seed 23 ctsfib 41 cts/lb _.. Avg. World Price - `94 '95. 8 Seed $272-331 Ron (12-15 cts4b) .16-.38 Vac (353-838 lbs/ac) $44-126 /ac oil and feed 6 Seed 16-27 ets/lb 658-1095 lbs/ac $105-296 Me break-even price; seeding 15kg/ac 7 Seed 40 cents/lb 2000 lbs/ac $800 /ac seeding rate 1 Okg/ac 2 Seed 43 cents/lb 2000 lbs/ac $860 /ac 3 Seed(certified) 55 cents/lb 557 lbs/ac $306 /ac French yield and export price 8 Seed(certified) 60 cents/lb 2000 Ibs/ac $1200/ac seeding l Okg/ac 2 OT. Source: 1/ Dutph research (probably includes $100 /ton CAP subsidy) 2/ K -n ucky Hemp Growers Association 3/ KY Task Force Marketing Committee 4/ Jeyasingam 5/ Hemp Textiles Intemational (based on availability and use of an in -field decoritator to separate the bast fibers from the hurds) 6/ Agriculture and Agri -Food Canada, Policy Branch 7/ D. Marcus (Marcus' break-even price for seed using an average of 46 lbs of hempseed per bu.) 8/ Food and Agriculture Organization, United Nations Despite these yield estimates and the wide -variety of reported price and revenue information, a clear consensus on industrial hemp profitability in the US is difficult to obtain: Cost and 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 selection, 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). The cost of legalization and regulation is difficult 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 difficult (eg., price differences for raw stalk 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 significant hemp processing facilities, 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 -team, 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 in the way of consumer studies to project hemp sales into the future. Total wholesale and retail revenues from manufactured hemp products was expected to reach a little over $20 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 $20 mil estimate seems high to the author, given near non- existent domestic production and processing capacity and imports of less than $1 mil last year.) 27 It is near impossible to estimate future hemp demand from the paper, wood products, and building industries. It is important to note thrz in countries where hemp production is (and in some cases has always been) legal, At se 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, frequently 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 crushing 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 significantly 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% 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 $334/mt, compared with $564/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 $1 mil and three-fourths of that is value- added hemp products. Despite the current fad for products made from hemp, legalized hemp production in the US would very likely depress US hemp prices, particularly in the short -run, and may even have a dampening effect on world prices, given the current state of world hemp processing technology and capacity. The slight upturn. in world prices last year may be signaling excess demand or room for production expansion. This is viewed by some as the classic chicken and egg argument of the need for a cheap reliable supply of raw material before a processing industry is developed and vice -versa Any price, thus profit projections, for future industrial hemp production must take into account the effect of changes in both production and demand on world prices. 28 Profitability of Hemp Versus Other Crops There have been some attemp. , :z) calculate the profitability of hemp versus other crops.: is not surprising that those entities that strongly favor legalization of industrial hemp production have, in general, the most favorable profit margins and multipliers effects. The following table is from Marcus' research. Although these estimates were for Canada, they should reflect similar conditions in the US: Expected Profitability of Hemp for Seed and Stalk vs. Other Crops (US$) Canola Grain Spring Low Ply Average High P/Y (Ontario) Corn' Wheat' Hemp Hemp Hemp Avg Yield 33 109 41 14.3bu/ac; l9bu/ac; 23.8bu/ac: (bu/ac) (105) (40) +2.5 t/ac +2.75 t/ac +3 t/ac Avg Price $4.63 $2.10 $2.64 $5.51/bu; $6.16/bu; $6.80/bu; ($/bu) ($2.44) ($3.82) $40.44/t $45.96/t $51.47/t Total 152.21 229.22 108.23 179.96 248.13 31629 Revenue (256.20) (152.80) Total Costs 122.46 20426 10323 174.63 174.63 174.63 (145+80) (110+65) Return 30.40 24.96 5.00 533 73.49 141.65 ($/ac) (136-56) (60-39) • The numbers in parentheses reflect expected profitability estimates for grain com and soft 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 land 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 land costs or not and a US government deficiency payment of $25/ac for com and $17/ac for wheat Deficiency payments are subject to change in the future. 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) and 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 stalk, 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 09 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 returns 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 Com (+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 gemaaine 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; dramatically since the early 1980s. Declines in production may be signaling that hemp profits are also on the decline — either absolutely and/or relative to other production alternatives. Industrial hemp faces significant competition from other natural fibers (cotton comprises 98% of the natural cellulose textile fiber market), oils (pprticularly soy) and a multitude of synthetics. Specialty pule fibers are limited to less than 5% ?f, tormal demand of other major grades of paper. Hemp processing technology remains antiquated. However, new innovative fiber 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 infiasstructure necessary for a viable commercial hemp market in the US makes demand and profit projections extremely speculative. If legal conC}Taints 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 (Weyerhauser, 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. Non-existent US industrial hemp production does not impede their 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 $4.26/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, creating more market risk than US farmers might be willing to bear. Contract production would alleviate some of that risk. Arty price, thus profit 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: 'h,; 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.orgleohip 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 Organization/United Nations. Various statistical databases. Growing Hemp as a Fiber Material in Kentucky. Jay T. Jeyasingam. International Consultant. May 1995. Hemp (Cannabis saliva). 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 Initiative Project 1994. Report on the Legalization of Industrial Hemp. Survey Research Center. University of Kentucky. September 1995. Report to the Governor's Hemp and Related Fiber Crops Task Force. Commonwealth of Kentucky. June 1995. US Bureau of Census. Various international trade databases. World Web Site http://ecolution.com 32 HOUSE OF REPRESENTATIVES NINETEENTH LEGISLATURE, 1997 STATE OF HAWAII H.B. NO, 2,%4- A BILL FOR AN ACT RELATING TO INDUSTRIAL HEMP. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII: 1 SECTION 1. The legislature finds that the total acreage 2 planted in sugarcane decreased 4.32 per cent per year, or by 3 thirty-six per cent or 67,300 acres, between 1984 (188,400 acres 4 planted) and 1994 (121,100 acres planted). Similarly, the total 5 acreage planted in pineapple decreased 4.41 per cent per year, or 6 by thirty-six per cent or 12,700 acres, between 1984 (35,000 7 acres planted) and 1994 (22,300 acres planted). In total, 80,000 8 acres of productive agricultural lands have been taken out of 9 pineapple or sugarcane production between 1984 (223,400 acres to planted) and 1994 (143,400 acres planted). At the present rate 11of decline (4.34 per cent per year), the total acreage planted in 12 sugarcane and pineapple will have decreased by seventy-five per 13 cent or 167,550 acres --from the total acreage planted in 1984 --by 14 the year 2015. is Like the demise of whaling, the decline of sugarcane and 16 pineapple are due to factors beyond the control of the 17 legislature and the State. The face of Hawaii --once shaped by 18 waving fields of sugarcane and endless rows of pineapple --is 19changing once more as foreign and mainland growers and the demand HE LRB 97-0416-1 ��Y Page 2 H.B. NO. 28q lfor affordable housing make it less profitable to farm the land 2 and more profitable to build homes on it. Once these productive 3 lands are lost to housing and other urban development, there is 4 no politically feasible way to return them to agricultural use. 5 Similarly, once agricultural water is reallocated for drinking 6 water and other people -related purposes, there is no politically 7feasible way to return it to agricultural use. If the character 8 and productivity of these lands is to be preserved, then 9 alternative crops such as industrial cannabis hemp need to be 10planted now --before there is too little land and water to make 11large-scale agriculture feasible in Hawaii. 12 The legislature finds that industrial cannabis hemp is a 13 renewable natural resource for the manufacture of fiber, pulp, 14paper, oil, paints, sealants, fuel, and food. Industrial 15 cannabis hemp fiber can be manufactured to produce fine linen and 16 very durable work cloth, as well as heavy canvas, twine, cordage, 17 and rope. In addition, it can be grown for its seeds, which can 18 be sold to other industrial cannabis hemp growers or made into 19food products; or it can be grown as a rotational crop to control 20 weeds and pests and loosen the earth for subsequent crops. In 211942, the U.S. Department of Agriculture carried out a nationwide 22 effort to encourage farmers to grow industrial cannabis hemp for HB LRB 97-0416-1 Page 3 Q H.B. NO. Z$"q 1 the war effort, which resulted in thirty-six thousand acres being 2 planted in seed hemp that year. The U.S. Department of 3 Agriculture also promoted industrial cannabis hemp as producing 4four times as much pulp than trees for paper production. In 51994, President Clinton designated industrial cannabis hemp as a 6 strategic food source. 7 The legislature also finds that there are strains of 8 industrial cannabis hemp that can be used for fiber and fuel 9 production and that contain low percentages of THC 10(tetrahydrocannabinols), the mind -altering compound found in 11marijuana. Industrial cannabis hemp is not psychoactive. 12 Several foreign countries, including Australia, England, France, 13 Canada, and China, currently allow agricultural production of 14 industrial cannabis hemp in all or part of their countries. In 15 the United States, a pilot project for agricultural research on 16 industrial cannabis hemp has been carried out with official 17 government permission in Imperial Valley, California. The 18 growing of industrial cannabis hemp in the United States is 19 allowed only by federal permit, and currently three states have 20 permits pending to grow industrial cannabis hemp in their 21jurisdictions. 22 Because of possible competition from mainland growers, the HE LRB 97-0416-1 i Page 4 H. B. NO. 2 -Eq 1 State of Hawaii needs to act now and plant test plots of 2 industrial cannabis hemp so that it --and not its 3 competitors --will be in the position to establish important 4 business ties with the manufacturers of hemp -based fiber, pulp, 5 paper, oil, paints, sealants, fuel, and food, and with the buyers 6 and sellers of industrial cannabis hemp seeds. If the State acts 7 now, thousands of acres of former sugarcane and pineapple lands 8 may once again be covered in waving, vibrant masses of greenery, 9 and this generation will have upheld its responsibility to 10 steward the land and natural resources of the State for use by llfuture generations. The purpose of this Act is to begin research 12 into: industrial cannabis hemp's agronomic characteristics, 13 including its use as a rotational crop; regulations governing 14 future commercial hemp production; and existing and potential 15 markets for hemp, hemp seed, and hemp products. 16 SECTION 2. Short title. This Act shall be known and may be 17 cited as the "Hemp Industry Development Act". 18 SECTION 3. Definitions. As used in this Act, unless the 19 context otherwise requires: 20 "Chairperson" means the chairperson of the board of 21agriculture. 22 "Committee" means the Hawaii hemp regulation committee. HB LRB 97-0416-1 Page 5 H. B. NO. 2-34- 1 "Hemp" means those parts of the plant Cannabis sativa, 2 whether growing or not, that meet the criteria defined by the 3 chairperson pursuant to section 4. "Hemp" is not psychoactive 4 and is separate and distinct from "marijuana". The term does not 5 include the leaves and flowers of the Cannabis sativa plant. 6 "Hemp products" means all products made from hemp, 7 including, but not limited to, cloth, cordage, fiber, food, fuel, 8 paint, paper, particle board, plastics, sterilized seed, seed 9 meal, seed oil, and certified seed for cultivation if the seeds 10 are obtained through the chairperson pursuant to section 4. 11 "Marijuana" means the leaves and flowers of the plant 12 Cannabis sativa, whether growing or not, the resin extracted from 13 the leaves or flowers, every compound, manufacture, salt, 14 derivative, mixture, or preparation of the leaves or flowers or 15their resins, and viable seeds if not obtained from the 16 chairperson pursuant to section 4. The term does not include 17 hemp or hemp products. 18 "Marijuana concentrate" means hashish, 19 tetrahydrocannabinols, or any alkaloid, salt, derivative, 20 preparation, compound, or mixture, whether natural or 21synthesized, containing tetrahydrocannabinols. The term does not 22 include hemp or hemp products. HB LRB 97-0416-1 Page 6 H.B. NO. Z2 1 "Tetrahydrocannabinols" or "THC" means synthetic equivalents 2 of the substances contained in the plant, or in the resinous 3 extractives of, Cannabis species, or synthetic substances, 4 derivatives, and their isomers with similar chemical structure 5 and pharmacological activity, such as: 6 (1) lcis or trans tetrahydrocannabinol, and their optical 7 isomers; 8 (2) 6cis or trans tetrahydrocannabinol, and their optical 9 isomers; and 10 (3) 3'4cis or trans tetrahydrocannabinol, and their optical 11 isomers. 12 Since the nomenclature of these substances is not 13 internationally standardized, the term includes compounds of 14 these structures, regardless of the numerical designation of 15 atomic positions. 16 SECTION 4. Hemp agronomic research. (a) The University of 17 Hawaii shall undertake agronomic research on the growing of hemp. 18 The chairperson shall oversee the university research, which 19 shall be mutually agreed upon by the chairperson of the board of 20 agriculture and the chairperson of the board of regents of the 21University of Hawaii, and which shall include: 22 (1) In 1998, two hemp test plots of not more than five HB LRB 97-0416-1 Page 7 H.B. N O. 2$q- 1 acres each cultivated with different irrigation, 2 elevation, and soil conditions; and 3 (2) In 1999, not more than four hemp test plots of not more 4 than ten acres each cultivated with different 5 irrigation, elevation, and soil conditions. 6 (b) Not less than twenty days prior to the convening of the 7 regular sessions of 1999 and 2000, the department of agriculture 8 and the University of Hawaii shall submit a joint report on the 9findings of the agronomic research to the legislature. The 10 reports shall contain: 11 (1) Results of the agronomic research, including, but not 12 limited to, water use/yield production functions, 13 timing of water stress effects on productivity, optimum 14 planting dates and populations, fertility requirements, 15 insect and pathogen problems, weed control, after - 16 harvest residue characteristics and soil erosion 17 potential, growth rates as influenced by environmental 18 conditions, optimum harvest timing and methods, and the 19 use of hemp as a rotational crop; 20 (2) Results of the chemical analysis of the hemp plants, 21 including, but not limited to, THC and cannabidiol 22 concentrations obtained from the test plots and the HB LRB 97-0416-1 H.B. NO. ZFq 1 methods used to sample the hemp crop; and 2 (3) Recommendations for permanent laws and rules to define 3 hemp as distinct from marijuana and to regulate the 4 commercial hemp industry. 5 (c) The chairperson may adopt any rules necessary to 6 implement this section. The rules shall be adopted in accordance 7 with chapter 91, Hawaii Revised Statutes - 8 SECTION 5. Hawaii hemp regulation committee. (a) The 9 committee shall research commercial hemp regulation policies in 10 other countries and make recommendations to the chairperson for 11similar policies in Hawaii. The mission of the committee shall 12 be to recommend permanent state laws and rules for commercial 13 hemp production. The recommendations shall ensure that farmers 14 will be able to plant hemp as a rotational crop or produce hemp 15safely and profitably, or both. 16 (b) The committee shall be composed of seven members 17 appointed by the chairperson. Potential appointees shall meet 18 the following qualifications: 19 (1) One appointee shall be a representative of the 20 department of agriculture; 21 (2) One appointee shall be a representative of the 22 University of Hawaii; HB LRB 97-0416-1 Page 9 H.B. NO. -2-?Li 1 (3) One appointee shall have a minimum of five years' 2 experience in Hawaii as a commercial farmer; 3 (4) One appointee shall have a minimum of five years' 4 public advocacy of hemp; 5 (5) One appointee shall be a representative of the 6 department of public safety; 7 (6) One appointee shall be a representative of the 8 department of the attorney general; and 9 (7) one appointee shall represent the public at -large. 10 (c) The members of the committee shall serve without 11compensation but shall be reimbursed for expenses, including 12 travel expenses, necessary for the performance of their duties. 13 (d) Not less than forty days prior to the convening of the 14 regular session of 1999, the committee shall issue a preliminary 15 report to the chairperson on the status of its policy 16 recommendations. After reviewing the report, the chairperson 17 shall make recommendations to the committee regarding the scope 18 and contents of the final report. 19 Not less than forty days prior to the convening of the 20 regular session of 2000, the committee shall issue its final 21report to the chairperson. This report shall include, but not be 22 limited to, policies for licensing or registering farmers to grow HB LRB 97-0416-1 Page 10 H, B. NO. 72,� 1 hemp, methods for inspecting fields, record-keeping, preventing 2 the diversion of hemp leaves and flowers from the field, 3 penalties, legal issues, and recommendations concerning the 4 continuation of the committee. 5 SECTION 6. Duties of the chairperson. (a) The chairperson 6 shall oversee the university research and authorize the 7 importation of hemp seeds to be used in the test plots pursuant 8 to section 4. The chairperson may adopt any rules necessary to 9 implement the hemp agronomic research. The rules shall be 10 adopted in accordance with chapter 91, Hawaii Revised Statutes. 11 (b) The chairperson shall review the preliminary report 12 issued by the committee pursuant to section 5 and make 13 recommendations to the committee for its final report. 14 (c) Not less than twenty days prior to the convening of the 15 regular session of 2000, the chairperson shall submit a report to 16 the legislature on the policy recommendations and statutory 17 changes necessary to expand commercial hemp production in the 18 State . 19 SECTION 7. Hemp market development. The department of 20 agriculture and the department of business, economic development, 21and tourism shall research existing and potential markets for 22 hemp and hemp seeds, both in Hawaii and elsewhere, and shall HB LRB 97-0416-1 Page 11 H. B. N O . 1 submit a joint report to the chairperson not less than forty days 2 prior to the convening of the regular session of 2000. 3 SECTION S. Conflict. In the event of a conflict between 4 this Act and any other law or rule, this Act shall control. 5 SECTION 9. Section 329-1, Hawaii Revised Statutes, is 6 amended by amending the definition of "marijuana" to read as 7follows: 8 ""Marijuana" means all parts of the plant (genus) Cannabis 9 whether growing or not; the seeds thereof, the resin extracted 10 from any part of the plant; and every compound, manufacture, 11salt, derivative, mixture, or preparation of the plant, its 12 seeds, or resin. [It] The term does not include the mature 13 stalks of the plant, fiber produced from the stalks, oil, or cake 14 made from the seeds of the plant, any other compound, 15 manufacture, salt, derivative, mixture, or preparation of the 16 mature stalks (except the resin extracted therefrom), fiber, oil, 17 or cake, [or] the sterilized seed of the plant which is incapable 18 of germination[.] or "hemp" as defined in Act Session Laws 19 of Hawaii 1997 or rules adopted pursuant to Act Session Laws 20 of Hawaii 1997. 21 SECTION 10. Section 712-1240, Hawaii Revised Statutes, is 22 amended by amending the definition of "marijuana" to read as HB LRB 97-0416-1 Page 12 H. B. NO. ZSq- Ifollows: 2 ""Marijuana" means any part of the plant (genus) cannabis, 3 whether growing or not, including the seeds and the resin, and 4 every alkaloid, salt, derivative, preparation, compound, or 5 mixture of the plant, including its seeds or resin[, except that, 6 as used herein, "marijuana"]. The term does not include hashish, 7 tetrahydrocannabinol, [and] any alkaloid, salt, derivative, 8 preparation, compound, or mixture, whether natural or 9 synthesized, of tetrahydrocannabinol[.], or "hemp" as defined in 10 Act Session Laws of Hawaii 1997 or rules adopted pursuant to 11Act , Session Laws of Hawaii 1997." 12 SECTION 11. There is appropriated out of the general 13 revenues of the State of Hawaii the sum of $ , or so much 14 thereof as may be necessary for the fiscal year 1997-1998, and 15 the same sum, or so much thereof as may be necessary for fiscal 16 year 1998-1999, for the department of agriculture to carry out 17 the purposes of this Act, including hiring necessary staff and 18funding the agronomic research of hemp by the University of 19 Hawaii. The sums appropriated shall be expended by the 20 department of agriculture. 21 SECTION 12. Statutory material to be repealed is bracketed. 22 New statutory material is underscored. HB LRB 97-0416-1 Page 13 H. B. NO. O. -�2,g14 1 SECTION 13. This Act shall take effect on July 1, 1997 and 2 shall be repealed on June 30, 2000; provided that the definitions 3 of "marijuana" in sections 329-1 and 712-1240, Hawaii Revised 4 Statutes, shall be reenacted in the form in which they read as of 5 June 30, 1997. 6 7 INTRODUCED BY: 9 w� u CatT OrV�o�r HB LRB 97-0416-1 JAN 161997 REPORT TITLE: Industrial Hemp DESCRIPTION: Provides for the conduct of agronomic research on the growing of industrial hemp in Hawaii. Amends the definition of marijuana to exclude industrial hemp. Requires the submission of the agronomic research results to the legislature. Establishes a hemp regulation committee to research hemp regulation policies in other countries and recommend laws and rules to regulate commercial hemp production in Hawaii. Appropriates funds. HB LRB 97-0416-1 Honorable Joseph Speaker, House o Nineteenth State Regular Session State of Hawaii M. Souki f Representatives Legislature of 1997 STAND. COM. REP. NO Honolulu, Hawaii F�G? / V RE: H.B. No. 284 H.D. 1 1997 Sir: Your Committee on Agriculture, to which was referred H.B. No. 284 entitled: "A BILL FOR AN ACT RELATING TO INDUSTRIAL HEMP," begs leave to report as follows: The purpose of this bill is to initiate research on the agronomic characteristics of growing industrial cannabis hemp. Supporting testimony was received from Loulen Hawaii Sportswear, Inc., Stein & Lubin LLP Attorneys at Law, and several individuals. Your Committee received testimony in opposition to the bill from the Department of Agriculture (DOA); the Department of Business, Economic Development, and Tourism (DBEDT); the Department of the Attorney General; the Department of Public Safety; the Honolulu Police Department; and the Hawaii Agriculture Research Center. Throughout its deliberations, your Committee remained cognizant of the legal concerns regarding the distinction between the terms "marijuana" and "hemp." Under state law, marijuana is defined as "all parts of the plant (genus) cannabis whether growing or not . . . Your Committee is aware that currently, under federal and state law, any cannabis plant with a tetrahydrocannabinol level over zero percent is considered marijuana, a hallucinogenic Schedule I controlled substance. (Tetrahydrocannabinol is the main psychoactive ingredient in HSCR AGR HB284 HD1 STAND. COM. REP. NO. Page 2 marijuana). Therefore, given this definition, hemp would be considered marijuana and would be prohibited under federal law. Given these major concerns, your Committee is especially mindful that before any efforts to research the cultivation of industrial cannabis hemp can be initiated, these legal concerns must be resolved. Furthermore, it is the strong belief of your Committee that any efforts to research the cultivation of industrial cannabis hemp must be conducted under carefully controlled and strict monitoring guidelines to remove any chance for abusing the plant for illegal purposes and to protect the health and safety interests of the people of the State. However, despite these overriding legal concerns, as the Committee on Agriculture, your Committee recognizes the potential of industrial cannabis hemp as a possible, viable alternative crop in the State. Furthermore, due to the downsizing of what was once Hawaii's primary industries, sugar and pineapple, your Committee believes that it is necessary to investigate and research alternatives to these crops, as well as help to promote and support new agricultural ventures that have the potential of opening new doors for agricultural and economic opportunities for the State. After careful consideration and much deliberation, your Committee has amended this bill by: (1) Changing the name of the Act cited in the bill to the "Hemp Research Act" to more accurately reflect the intent of the bill; (2) Changing the name of the "Hawaii Hemp Regulation Committee" to the "Hawaii Hemp Research Regulation Committee" to more accurately reflect the responsibilities of the committee; (3) Requiring that any: (a) Agronomic research conducted on the growing of hemp by the University of Hawaii; (b) Expenses incurred by the Hawaii Hemp Research Regulation Committee; and (c) Research on existing and potential markets for hemp and hemp seeds by DOA and DBEDT; be dependent on the provision or receipt of gifts, donations, and grants from private sources; HSCR AGR HB284 HD1 STAND. COM. REP. NO. Page 3 (4) Repealing amendments to the definition of "marijuana" under the Uniform Controlled Substances Act and the Penal Code; (5) Deleting the section that the bill is to have precedence in the event of a conflict between the bill and any other law; (6) Deleting the appropriation from the bill; (7) Creating the Hawaii Hemp Special Fund into which gifts, donations, and grants from private sources are to be deposited; and (8) Making technical, nonsubstantive amendments for purposes of clarity, consistency, and style. As affirmed by the record of votes of the members of your Committee on Agriculture that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 284, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 284, H.D. 1, and be referred to the Committee on Judiciary. Respectfully submitted on behalf of the members of the Committee on Agriculture, /�S MERWYN S. ONES hair HSCR AGR HB284 HD1 State of Hawaii House of Representatives The Nineteenth Legislature Record of Votes of the Committee on Agriculture BilUResclution No.: H.B. 234 Date: 2/10/97 committee Referral: AGR, JUD, FIN ❑ The committee is reconsidering its previous decision on this measure. The recommendation is to: ❑ Pass, unamended ❑ Hold 5110ass, with amendments 0 Recommit AGR Members Ayes Ayes (WR) Nays Excused 1. JONES Merwyn S. C 275 ✓ 2. ABINSAY Felipe P. Jr. VC 201 ✓ 3. CHANG Jerry L. 230 4. HERKES Robert N. 255 S. MORITA Hermina 326 S. TAKAL K. Mark 400 7. WHITE Michael 435 S. FOX Galen 235 ✓ 9. McDERMOTT Bob 310 F. TOTAL �%' - The measure is: ❑ Passed, unamended assed, with amendments ❑ Recommitted 0 Held If pmt referral, did not support recommendation. committee wronym(s) Vice Chair's or designee{sig ure: ,(,up � IN t Distribution: ❑ If passed, attach t mMee Report ❑Data Entry Record of Votes AGR HOUSE OF REPRESENTATIVES NINETEENTH LEGISLATURE, 1997 STATE OF HAWAII H.B, NO,184 H.D.1 A BILL FOR AN ACT RELATING TO INDUSTRIAL HEMP. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII: 1 SECTION 1. The legislature finds that the total acreage 2 planted in sugarcane decreased 4.32 per cent per year, or by 3 thirty-six per cent or 67,300 acres, between 1984 (188,400 acres 4 planted) and 1994 (121,100 acres planted). Similarly, the total Sacreage planted in pineapple decreased 4.41 per cent per year, or 6 by thirty-six per cent or 12,700 acres, between 1984 (35,000 7 acres planted) and 1994 (22,300 acres planted). In total, 80,000 8 acres of productive agricultural lands have been taken out of 9 pineapple or sugarcane production between 1984 (223,400 acres 10 planted) and 1994 (143,400 acres planted). At the present rate 11of decline (4.34 per cent per year), the total acreage planted in 12 sugarcane and pineapple will have decreased by seventy-five per 13 cent or 167,550 acres --from the total acreage planted in 1984 --by 14 the year 2015. 15 Like the demise of whaling, the decline of sugarcane and 16 pineapple are due to factors beyond the control of the 17 legislature and the State. The face of Hawaii --once shaped by 18 waving fields of sugarcane and endless rows of pineapple --is 19 changing once more as foreign and mainland growers and the demand 20for affordable housing make it less profitable to farm the land Page 2 land more profitable to build homes on it H. B. NO . 284 H.D. 1 Once these productive 2 lands are lost to housing and other urban development, there is 3 no politically feasible way to return them to agricultural use. 4 Similarly, once agricultural water is reallocated for drinking 5water and other people -related purposes, there is no politically 6feasible way to return it to agricultural use. If the character 7 and productivity of these lands is to be preserved, then 8 alternative crops such as industrial cannabis hemp need to be 9 planted now --before there is too little land and water to make 10 large-scale agriculture feasible in Hawaii. 11 The legislature finds that industrial cannabis hemp is a 12 renewable natural resource for the manufacture of fiber, pulp, 13 paper, oil, paints, sealants, fuel, and food. Industrial 14 cannabis hemp fiber can be manufactured to produce fine linen and 15 very durable work cloth, as well as heavy canvas, twine, cordage, 16 and rope. In addition, it can be grown for its seeds, which can 17 be sold to other industrial cannabis hemp growers or made into 18food products; or it can be grown as a rotational crop to control 19 weeds and pests and loosen the earth for subsequent crops. In 201942, the U.S. Department of Agriculture carried out a nationwide 2leffort to encourage farmers to grow industrial cannabis hemp for 22 the war effort, which resulted in thirty-six thousand acres being 23planted in seed hemp that year HE284 HD1 The U.S. Department of Page 3 H. B. NO . 214 H.D. 1 1 Agriculture also promoted industrial cannabis hemp as producing 2four times as much pulp than trees for paper production. In 31994, President Clinton designated industrial cannabis hemp as a 4 strategic food source. 5 The legislature also finds that there are strains of 6 industrial cannabis hemp that can be used for fiber and fuel 7 production and that contain low percentages of THC 8 (tetrahydrocannabinols), the mind -altering compound found in 9 marijuana. Industrial cannabis hemp is not psychoactive. 10 Several foreign countries, including Australia, England, France, 11Canada, and China, currently allow agricultural production of 12 industrial cannabis hemp in all or part of their countries. In 13 the United States, a pilot project for agricultural research on 14 industrial cannabis hemp has been carried out with official 15 government permission in Imperial Valley, California. The 16 growing of industrial cannabis hemp in the United States is 17 allowed only by federal permit, and currently three states have 18 permits pending to grow industrial cannabis hemp in their 19jurisdictions. 20 Because of possible competition from mainland growers, the 21State of Hawaii needs to act now and plant test plots of 22 industrial cannabis hemp so that it --and not its 23 competitors --will be in the position to establish important HB284 HDI Page 4 H.B. NQ.214 HD.I 1 business ties with the manufacturers of hemp -based fiber, pulp, 2 paper, oil, paints, sealants, fuel, and food, and with the buyers 3 and sellers of industrial cannabis hemp seeds. If the State acts 4 now, thousands of acres of former sugarcane and pineapple lands 5 may once again be covered in waving, vibrant masses of greenery, 6 and this generation will have upheld its responsibility to be 7 stewards of the land and natural resources of the State for use 8 by future generations. 9 The purpose of this Act is to begin research into industrial 10 cannabis hemp's agronomic characteristics, including its use as a 11rotational crop; establish regulations governing future 12 commercial hemp production; and examine existing and potential 13 markets for hemp, hemp seed, and hemp products. 14 SECTION 2. Short title. This Act shall be known and may be 15 cited as the "Hemp Research Act". 16 SECTION 3. Definitions. As used in this Act, unless the 17 context otherwise requires: 18 "Chairperson" means the chairperson of the board of 19 agriculture. 20 "Committee" means the Hawaii hemp research regulation 21 committee. 22 "Hemp" means those parts of the plant cannabis sativa, 23 whether growing or not, that meet the criteria defined by the HB284 HDI Page 5 H, B, NO . 214 H.D. 1 1 chairperson pursuant to section 4. "Hemp" is not psychoactive 2 and is separate and distinct from "marijuana". The term does not 3 include the leaves and flowers of the cannabis sativa plant. 4 "Hemp products" means all products made from hemp, including 5 cloth, cordage, fiber, food, fuel, paint, paper, particle board, 6 plastics, sterilized seed, seed meal, seed oil, and certified 7 seed for cultivation if the seeds are obtained through the 8 chairperson pursuant to section 4. 9 "Marijuana" means the leaves and flowers of the plant 10 cannabis sativa, whether growing or not, the resin extracted from lithe leaves or flowers, every compound, manufacture, salt, 12 derivative, mixture, or preparation of the leaves or flowers or 13 their resins, and viable seeds if not obtained from the 14 chairperson pursuant to section 4. The term does not include 15 hemp or hemp products. 16 "Marijuana concentrate" means hashish, 17 tetrahydrocannabinols, or any alkaloid, salt, derivative, 18 preparation, compound, or mixture, whether natural or 19 synthesized, containing tetrahydrocannabinols. The term does not 20 include hemp or hemp products. 21 "Tetrahydrocannabinols" or "THC" means synthetic equivalents 22 of the substances contained in the plant, or in the resinous 23 extractives of, cannabis species, or synthetic substances, Page 6 H. B. NO . 284 H.D. 1 lderivatives, and their isomers with similar chemical structure 2 and pharmacological activity, such as: 3 (1) lcis or trans tetrahydrocannabinol, and their optical 4 isomers; 5 (2) 6cis or trans tetrahydrocannabinol, and their optical 6 isomers; and 7 (3) 3'4cis or trans tetrahydrocannabinol, and their optical 8 isomers. 9 Since the nomenclature of these substances is not 10 internationally standardized, the term includes compounds of llthese structures, regardless of the numerical designation of 12 atomic positions. 13 SECTION 4. Hemp agronomic research. (a) The University of 14 Hawaii shall undertake agronomic research on the growing of hemp; 15 provided that only gifts, donations, and grants from private 16 sources shall be used to fund the research. The chairperson 17 shall oversee the university research, which shall be mutually 18 agreed upon by the chairperson of the board of agriculture and 19 the chairperson of the board of regents of the University of 20 Hawaii, and shall include: 21 (1) In 1998, two hemp test plots of not more than five 22 acres each, cultivated with different irrigation, 23 elevation, and soil conditions; and HB284 HDI Page 7114 H, B. NO. H.D. 1 1 (2) In 1999, not more than four hemp test plots of not more 2 than ten acres each, cultivated with different 3 irrigation, elevation, and soil conditions. 4 (b) Not less than twenty days prior to the convening of the 5regular sessions of 1999 and 2000, the department of agriculture 6 and the University of Hawaii shall submit a joint report on the 7findings of the agronomic research to the legislature. The 8 reports shall contain: 9 (1) Results of the agronomic research, including water 10 use/yield production functions, timing of water stress 11 effects on productivity, optimum planting dates and 12 populations, fertility requirements, insect and 13 pathogen problems, weed control, after -harvest residue 14 characteristics and soil erosion potential, growth 15 rates as influenced by environmental conditions, 16 optimum harvest timing and methods, and the use of hemp 17 as a rotational crop; 18 (2) Results of the chemical analysis of the hemp plants, 19 including THC and cannabidiol concentrations obtained 20 from the test plots and the methods used to sample the 21 hemp crop; and 22 (3) Recommendations for permanent laws and rules to define 23 hemp as distinct from marijuana and to regulate the HB284 HD1 H. B, NO , 214 H.D. 1 1 commercial hemp industry. 2 (c) The chairperson may adopt any rules necessary to 3 implement this section. The rules shall be adopted in accordance 4 with chapter 91, Hawaii Revised Statutes. 5 SECTION 5. Hawaii hemp research regulation committee. (a) 6 The committee shall research commercial hemp regulation policies 7 in other countries and make recommendations to the chairperson 8for similar policies in Hawaii. The mission of the committee 9 shall be to recommend permanent state laws and rules for 10 commercial hemp production. The recommendations shall ensure 11that farmers will be able to plant hemp as a rotational crop or 12 produce hemp safely and profitably, or both. 13 (b) The committee shall be composed of seven members 14 appointed by the chairperson. Potential appointees shall meet 15the following qualifications: 16 (1) One appointee shall be a representative of the 17 department of agriculture; 18 (2) One appointee shall be a representative of the 19 University of Hawaii; 20 (3) One appointee shall have a minimum of five years' 21 experience in Hawaii as a commercial farmer; 22 (4) One appointee shall have a minimum of five years' 23 public advocacy of hemp; HB284 HD1 Page 9 H.B. NO.214 HD.I 1 (5) One appointee shall be a representative of the 2 department of public safety; 3 (6) One appointee shall be a representative of the 4 department of the attorney general; and 5 (7) One appointee shall represent the public at -large. 6 (c) The members of the committee shall serve without 7 compensation but shall be reimbursed for expenses, including 8 travel expenses, necessary for the performance of their duties; 9 provided that only gifts, donations, and grants from private 10 sources shall be used for any expenses incurred by the committee. 11 (d) Not less than forty days prior to the convening of the 12 regular session of 1999, the committee shall issue a preliminary 13 report to the chairperson on the status of its policy 14 recommendations. After reviewing the report, the chairperson 15 shall make recommendations to the committee regarding the scope 16 and contents of the final report. 17 Not less than forty days prior to the convening of the 18 regular session of 2000, the committee shall issue its final 19 report to the chairperson. This report shall include policies 20for licensing or registering farmers to grow hemp, methods for 21inspecting fields, recordkeeping, preventing the diversion of 22 hemp leaves and flowers from the field, penalties, legal issues, 23 and recommendations concerning the continuation of the committee. HB284 HD1 214 Page 10 H , B , NO . H.D 1 SECTION 6. Duties of the chairperson. (a) The chairperson 2 shall oversee the university research and authorize the 3 importation of hemp seeds to be used in the test plots pursuant 4 to section 4. The chairperson may adopt any rules necessary to 5 implement the hemp agronomic research. The rules shall be 6 adopted in accordance with chapter 91, Hawaii Revised Statutes. 7 (b) The chairperson shall review the preliminary report 8 issued by the committee pursuant to section 5 and make 9 recommendations to the committee for its final report. 10 (c) Not less than twenty days prior to the convening of the 11regular session of 2000, the chairperson shall submit a report to 12 the legislature on the policy recommendations and statutory 13 changes necessary to expand commercial hemp production in the 14 State. 15 SECTION 7. Hemp research market development. The 16 department of agriculture and the department of business, 17 economic development, and tourism shall research existing and 18 potential markets for hemp and hemp seeds, both in Hawaii and 19 elsewhere, and shall submit a joint report to the chairperson not 20 less than forty days prior to the convening of the regular 21session of 2000; provided that only gifts, donations, and grants 22from private sources shall be used to fund the research. 23 SECTION 8. sawaii hemp special fund. All activities, 24 including hemp agronomic research, the Hawaii hemp research Page 11114 H 1I" I . B , N O , H.D. 1 1 regulation committee, and hemp research market developments 2 required by this Act shall be funded by private sources. 3 There is established a Hawaii hemp special fund into which 4 gifts, donations, and grants from private sources shall be 5 deposited. All interest earned or accrued on moneys deposited in 6 the fund shall become part of the fund. The fund shall be 7 administered by the department of agriculture for the purposes of 8 this Act. 9 SECTION 9. This Act shall take effect on July 1, 1997, and 10 shall be repealed on June 30, 2000. HB284 HD1 REPORT TITLE: Industrial hemp research DESCRIPTION: Requires the University of Hawaii (UH) to conduct agronomic research on the growing of hemp; provided that only private moneys are to be used to fund the research. Requires the department of agriculture (DOA) and UH to submit a report on the research findings. Creates the Hawaii hemp research regulation committee (committee) to research commercial hemp regulation policies, with a report to the board of agriculture chair; provided that only private moneys are to be used for any expenses incurred by the committee. Requires research on hemp and hemp seeds; provided that only private moneys are to be used to fund the research. Creates the Hawaii hemp special fund. (HB284 HD1) HB284 HDI U) 3 0 Z O N O O F. OOV } Y G •d L M L O •,t_, E 6 W 00 1:1 y L tl N p y H d 4L'<7Eym��coy =cg��E"sx'as L OO 1-9 ■ BUSINESS & TECHNOLOGY Hemp is high fashi (No, Cheech, not that kind.) Hemp products are booming ou can't get high smoking jeans to jeans and salad oil. Some estimates put made from it. The oil tastes pret- worldwide trade in hemp products at J tv good on salads. but don't ex- $100 million last year, a figure that Peet to get a buzz. You can make i'Aa experts say could double or even brownies with it. but after eating a :` triple in the next few years. 1 �t few. reggae music still sounds 40- All in all, it is quite a about the same. r.4 No, this hemp is different. It's - called industrial hemp. and - though it looks a lot like itsj. leap -cousin, Cannabis sa-_'? trio, or marijuana, it s. i comeback for this fibrous plant with a - 3 history. Hemp had been an agricultural staple in America for hundreds of years. providing rope for sailing ships, canvas for covered wagons and lamp oil for co - lacks the same hallucinatory properties. lonial farms. But it became a victim of Just as corn comes in different varie-„ technologicaladvancesinthel9theentu- ties—sweet, short ear or animal feed— ry: The cotton gin made cotton fabric so too does hemp, which grows with vat- cheaper; the slave labor needed to proc- ious amounts of THC (delta -9 tetrahy- ess hemp disappeared, and fossil fuels drocannabinol), the psvchoactive ingre- replaced hemp oil for light and heat. client in cannabis. Industrial hemp is a The coup degrdcecame this century, tall. lanky. low -THC variety of marijua- when hemp all but disappeared na, prized more for its fibrous stalk and from world markets as most in - its oil -rich seeds than its smokability. dustrialized countries sought to Hemp chic. Cultic atim, industrial stamp out drug abuse. hemp in the United States has been Ifs easy to understand the illegal for more than a quarter century renewed interest in hemp to - because of fcai� that pot growers day. The plant is one of na- would raise their crops alongside tune's finest renewable fi- hemp, making the illegal weed harder ben sources, producing to spot. Imports of finished hemp four times as much pulp products. however, are still allowed— per acre as trees. As de - and demand is soaring. Fashion de- mand for fiberboard, signers like Calvin Klein and Giorgio packing materials Armani are adding hemp clothing and paper products and bed linens to their lines. mcreases, hemp may Adidas sold 30.000 pairs of ath- WEED be an alternative to letic shoes made partly from buying up expensive hemp last vear. Hemp retail MAKING A BIG forest land and stores are sprouting up p clear -cutting trees for wood Cur - all across the country, COMEBACK pulp. hawking everything tis Koster, Interna - from hemp sham- All die above tional Paper Co.'s poos and soaps clothing it as made technology business from Industrial manager, notes that Hemp. h s still illegal as a source of fiber, rn groin, but than hemp is the strongest i.nalrt Change and easiest to grow, with the broadest geographical range. It also is environ - 54 11ne111 11­wxw0 ,s,,. ■ BUSINESS & TECHNOLOGY mentally correct. As hemp activists point out, it can be grown without the pesticides and irrigation needed to raise a cotton crop. For that reason, hemp clothing has become a status symbol for the ecofriendly, even though some of the material feels like burlap and calls to mind peasant wear on a Communist Chinese collective. Hemp clothing is no bargain either: A shirt might set y c E r a t t Co., a California import and manufac- turing firm that sold $1.5 million worth of hemp products last year, says he must deposit money in the Bank of China, which holds the cash for 60 days before he receives a delivery. "The textile busi- ness people laugh at us because no one in his right mind would pay upfront and in cash for jeans material," he says. Few doubt that legalizing hemp cul- tivation in the United States makes good commercial sense. But the poli- tics are tricky. This year, as many as 10 states may introduce bills to legalize growing hemp with less than 3 percent THC content. But few expect any to pass. Besides, with marijuana use in- creasing among teenagers, states that passed a legal -hemp initiative would likely face the wrath of federal authori- ties. (The Clinton administration says it will prosecute Arizona and California that will employ 70 people in a particle- board mill near the aptly named Arizo- na city of Sawmill. Open door! Although growing plants containing THC is illegal under current Navajo law, the tribal council might amend the law to make cultivating plants with less than 3 percent THC le- gal. The Navajos also are considering using hemp fiber to make rugs and pressing hemp seeds for oil. Proponents believe that the tribe's sovereign status doctors who prescribe marijuana for medicinal purposes, even though voters in those states approved initiatives making it legal for them to do so.) But hemp activists may have a trump card. Leaders of the Navajo Nation are considering cultivating as many as 40,000 acres of hemp this spring as part of an economic -development project nt :d li- of go d- tc- ad Colorado will quickly increase their de- mands to grow hemp, too. That could open the door for marijuana cultiva- tion throughout the country, the DEA fears. Officially, however, the agency is adopting a wait-and-see attitude. But clearly it would prefer that the Navajos just say no. ■ By DAN, MCGRAW 56 US.NEWS & WORLD REPORr, JANUARY 20, M7 E c y A c � U L N r 7 v c 3 :2 •c .. cc, 3 Aa K ar�a A 5 oD a FL .-7rSw..l u= L J ca y c E cu a N vii K = o f � Zi Q� v .E y a ■� :- c C F n y CD _ C G c ' = E o _G.4 E ,Nc .F N T tE T •. _ a v; ZD 0 •. N © 'w t U W D O T OEL v O c G, E a! y E u 'o- u C' C y .y.. ° T .y.. y� L F y a O L o s° v T F 3 v T v oT�GuK �- n•E�F"s --mow v �av¢ E 2 m '0 '- N c E v E c F 2 m c = Y 9 y U � C � OO CyG 6�TL OOp CQ C�' v - v E• u u y C y C r °' u^ v 'C v El 0 ti H C C y v y •! y ..Y q a F Er � C C � V L j� c y � o � O C m m C N L 2 m (n H L C x y C � t �- CONNh,TICUT WASHINGTON, Internet http://www,norml.org a weekly service for the media on news items related to Marijuana Prohibition. February 6, 1997 Record Number Of State Legislatures To Decide On Industrial Hemp In 1997 February 6, 1997, Washington, D.C.: At least ten state legislatures will decide on measures peiWning to the cultivation of industrial hemp in 1997, the largest number since hemp was made illegal by the federal government in 1937 under the Marihuana Tax Act. "Domestic sales of imported hemp products raked in approximately $25 million dollars in sales in 1994 alone and the American Farm Bureau now calls hemp 'one of the most promising crops in half a century,"' said NORML's Deputy Director Allen St. Pierre. "The explosion of industrial hemp legislation at the state level is a direct result of growing awareness among legislators and the public that this is a viable crop for American farmers." Presently, legislators have introduced industrial hemp legislation in at least six states: Colorado, Hawaii, Kansas, Minnesota, Missouri, and Virginia. While some of these measures simply mandate state-run committees to study the economic benefits of, and barziers to, production of industrial hemp, other more progressive bills allow for test plots of hemp to be culfivated for research purposes. "The state of Hawaii needs to act now and plana test plots of industrial cannabis hemp so that it -- and not its competitors -- will be in the position to establish important business ties with the manufacturers of hemp -based fiber, pulpp, paper, oil, paints, sealants, fuel and food," states legislation introduced in Hawaii by Rep. Cynthia Thielen (R-Kailau Kameohe), one of three state bills introduced to allow for domestic cultivation. According to former Colorado Senator and hemp advocate Lloyd Casey, representatives and senators in at least six additional states "range from 75 percent to 95 percent" sure that they will also introduce industrial hemp legislation in 1997. These states are: Illinois, Iowa, Kentucky, Oregon, South Dakota, and Wisconsin. "Industrial hemp provides a window of opportunity for U.S. agriculture producers to take advantage of a highly profitable fiber crop [with] many uses ,..," wrote Bob Winter in the June 17, 1996 edition of Farm Bureau News -- the weekly newspaper of the American Farm Bureau Federation. "International, trade agreements (e.g., GATT and NAFTA) recognize the designation of 0.3 percent ... THC as the distinction between industrial hemp and marijuana. [Xet,] current U.S. law[s] do not differentiate between hemp and marijuana. Thanks to these laws,_ U.S. farmers are prohibited from growing a highly profitable crop without government subsidy." Often described as marihuana's misunderstood cousin, industrial hemp is from the same plant species (Cannabis sativa) that produces marijuana. Unlike marijuana, however, industrial hemp has only minute amounts of delta -9 tetrahydrocannabinol (THC), the psychoactive ingredient that gives marijuana its euphoric and medicinal properties. Currently most of Europe and Asia grow hemp for industrial purposes. Both Australia and Canada engage in hemp cultivation for reseazch purposes. For more information, please contact Laura Kriho of the Colorado Hemp Initiative Project (CO - HIP) 0 (303) 784-5632 or Paul Armentano of NORML 4 (202) 483-5500. LIaJ d Casey may be contacted la a-mail at: ahavoterC aol.com. For updates on state hempp legislation, please check out NORML's website �: http:/I-norml.org or a -mail CO-H1P at. cohip4welcomehome.org. Copies o.fNORML's position paper; Can America Afford Not To Grow This Plant? are available upon request, , in THE wA,NINmoN VAST NATIONAL vol EWrllin Getting a Financial High From Rope How hemp, a close cousin of marijuana, has become a controversial darling of U.S. industry .. .. _ -. by wthor Jack Here, spurred tattiest by b— Bylokn Mind, wwuorw, ..We— ' / �f ^��, _ newer imagining lumfive imports from Cama tries such as China and Hungar Jost -growing coalition of =it Enj. farmers, ing cos.eurs and nujor industries Blinks it has found the modern .Yivabu t of'Bubber— the antigravitygoo b e 190 fiw that lotted =for Fred MacMurray', w inb orbit. bounced his college basketball team toward the gym ceiling . masked spin The . The miracle substance arousing t Interest now happens Proponents be Bre a world. old.t mopy hemp. reshapthof the Bbrous talk eau It can reshape the paper and apparel industries, reduce world defofins cowatiop nd provides u=, yield cess bifid rg materials and provide pub+ mTherr food.only rm reduce heart with her Theft a moor one dight problem with hemp, nor. It's, ah, Illegal. It's alio celled azzons There w i two vwiw. of We hemp plant, m mami maw. Dae b poo the high when gr.nmh herb thee I. Industrial You triwhen you smoke IL The other Ia dache. hemp• and pBhe Itgives yw•heedrehe. The pre -hemp forcer lint sum it federal wNoritl. to why ban ort But hMB hemp while draws no b bre pct But mw the two meet draws no dietipV.0 between the two weeds. "Nemo is • aatroBed wbwwme alder the 1972 Coearem 3 comb ea M,' omlWor Drug Eafmcriney Administratlon sakeemsu Jamar Mabrut hy. legalizing hemp would WderM We gow menr'e no-0rug g new-4apes shown pow. Mernage y trays, ... new amtli. snowing teenage mid of. N use cluertin California allowing eraappml o(a Notromir initiative, Blowing druamedg of pot use heady has , complicated of xi enforcers' r5' apt marljYna message, a(fidah add. The DM W.iapcerned that Fit growers mink ml meld weak legalized hemp gelds to grow their Illicit weed. Nva in bwapeen cruldoHemp promoififf.ters the two, and my th tan Hemp Dromotera disagree, and gay the twos plantsMa bole diffarnL Mary businessesp,fe avoid Wbgdy m«IIsIbI interest it hemp, harmg that they'll farmers labeled soft oo drugs. Instead, they let n musl and virosumaWiwpush in issuettrtatalegis laverMi from Kentucky b VermWL Wi=Dodo W dfar uri We. SO hr the ponce have ate, the 'hem eters" t m p Washington .tam capitols. In Colorado, for example,. downs of narcotics investigators hepacmp state hearings. mens f a proposed hemp study.d key argument of We agents u Denver and elsewhere is that men burins figures actually are front en (or arum dealers. 'The y' re making a .toy argument to legalise t official sa s White Nouse drug enforcement official says of hemp a officials . But Nficifi who made that accusation of acknowledge t co didn't know Ne lineup of lathe p. ion sl. concerns he Fainhm Intent bhemp'sthersmheuare TheFwJ.eFurry Freak Brothers, thry aren't Take paper cu Paper Bitter, I the world's largestpaper firm.Cmtisaysth I co many 1. Ely buain.5 manager, says the company i5 intrigued by nemp as a way to address what limber interests ell the looming worldwide `fiber aids.` The need fm paper and other fiber products (such as fiberboard, packing materials and pulp) is Atimsekefing in We Third World—It seems demand for such products precisely Trucks economic and eduational progress. But the m% timber fircow of buying forest Ind, cutting V. it procesdng wood b the lace of global environnlenml activism are .minima upwards, too. So paper firms are eager for new swim of fiber—and hemp probably is We best, says Koster, who recently joined the board of d'peo bra of a new pruh p business clamed. air. We strongest, easiest to grow and has We broadent g.vaphical nogg" he says. White Irere Empire decades b grow, hemp mahe<s To IN daysi over time, hemp yield, two to four Bones as much fiber per acre as wood, Koter vys. "wootl fiber is very interior to many other fiber product," such as hemp, says Kwter, who speaks for Imoself and not his firm, and who chooses his words carefully, "There's no doubt excellent paper can be made from hemp.... It's a remarkable thing God WE on earth' 'The paper industry is by rare very con. most, but its aggreswvely seeking data on hemp," says Med Byrd, a leading paper researcher at North CaroBpa State University. "That's a radial clmnge." By rout ainivg its hard line against hemp, law enforcement `throws away seeme, end common sans," he says. The pot controversy prevents his firm from officially expressing interest in hemp, says Koster. But be it..... federal agent .. cations that pro -hemp businesses are drug boom—he calls them 'lies' that 'make law enforcement look like baboons." 'Should industry be interested in hemp?' M,— wore.'Yea." He say, be amount hemp wme lay will be Legal. But Neo mdustry would oily be redinawriog a prpdum = aodwt se chilivGon. 61 BY STRIPPING APARTTHE HEMF ST'ALK'S sinewy fibro, man made Ne Wall rope. The Chinese invented fish nw with it b 4500 B.C.. .it Inger the that paper. H[rodoma wrote of We fineness of hempen garments. Used to make books, maps it lamp oil, hemp was the top mop in Asia, Europe sell America from 15W to 11100. SBIs were made of bamp become it dont saddevi word'canyas' ie said to come from ecsuubia" Colonial Vatican and Cowecticut made We akivation of hemp msudwry. The fired dNm of We, D=lamuion of Independence were writ. tar n hemp. George Washington and Thomas Jefkmon owned bemp planmisms and promot. ed its benefits. Many farmers paid lues in hemp bails. Dozens N U.S. towns wart named for it—inicluf ing Hempstead, N.Y But in the 1930s, the federal government cracked down on Economist. The paint indus try, which fixed hemp. persuaded officuls b exempt iL But a 1071aw exacted steep taxes an i[-$1 . oaaa--and the hemp Industry died. During World War 11, Resident Franklin D, Roosevelt launched We 'Hemp for Victory" urogram, inducing farmers to resume growing We crop for military uea­trom boot taus to parachute webbing and backpacks. The U.S. hemp industry died again after me wu. Ai hemp sOl was grown in Europe and Asia—.d it's been legal to import it here B already processed—it was a forgotten crop nary. Un i IM, that I%when a book on hemp y The industry has exploded since than IC 1993, hemp's worldwide aides were S5 tall Boon in 19951hey tomled $75 million, scionA mg b HwppbeIT a CalKorw corulunh fi, n. Net cracks the industry Hemplech exp, I aides of 8200 million in 1997, and $600 millln, by 2001. A A LINGERING QUESTION ABOUT I'HI young industry is whether it can develop „ pew genemfion of hemppmams ngrisen uu- b chew out the product profitably. But into, try executives any Nat's not a difficult fast,. technologically. Hemplech President Jobs Roulac says some leading carpet firmx— almarly eapci..ft with hemp because it . tough said mildew-redamnt—are investinc in such eflorm. Many people in We apparel business the obstacles art surmountable, and that will, a Little research and marketing, hemp cooled be pose of We ration's top fabric, 'it witior tremeadoua innocent in Ne fashion Indumn: says Owen Sercue, s textile 'rel .... r o Fashmp mwiNte of Technology, a New 11u1! camege Bed to We industry .'it 's vAE, b, lo gigantic market" Hemp is one of We most durable labri, around --hemp clothing typically trim 10 yam.. compared with five for cotton—and it at... "breathes" better thou any fabric Serra, d:,, Be... hemp fiber can be peeled like au orm n, doth. cal be made very thin, and ire maHism,p roclow "Hemp produces s We cloth clew yarn, with a and wr that rile.thecloth cool in summnn Cod warm arm, ro Airsn.le in id in " ectal Co.,., Giorgio Armani said in D.embel W cleaMpWea aV.whercom Innemp ear W dotting Ib.. Maly other en and es—sued, all have stepped Ralph Waren end Adidas— Bw have,topped rnhatnae. Apparel firma hee t about hemp's uncertain oversew We and the Wory xt exoculive my.ordTh the authhen es.lif industry edrug czar Lic They recall Ns, Mich House alma car Lee Brown agodziug Adidas h ."The marked Mi a your ago in naming a show "The Hemp " Adidu withdrewhionxK But -,loon executives ay hemp is a marker Ing pits. Uner because of its h may nmm�lal benefits. Unlike cotton—which which may re9nin hundreds of pounds of expensive lanolin lr hernare thld. or peetiddes per aneethemp ,J. ,. are chemical -free. Hemp also dpesnt drplrn We it, Hemp appeals be many formers for tln Farm Barna. EFed Nisyearthe nations Farm Bureau Federations the neuon'- brgest farm group, with p million On on bars—Joined the is publication movement i recent f We m b its miring crops celled Lett 'one of We most promising crops in hall a aeturare htl aWd bnti e the aernave mcrus farers are looking for. - Bantu Bio could spur new investment to rural stead because h collo art rvn pn. would peed prods' pa milli near the field. 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State wants to cover all its bases on hemp issue By JAcon KAMIIIIS l41N.olufJ Wpooer A century after hemp pro- duction was introduced in I lawaii and 50 years after cul- nvauou was ended nationally. House Bill 284 .seeks in lest industrial hemp for feasibility. If (louse Bill 284 becomes law this summer, the University of Hawaii may experiment with cannabis saliva plants containing a low telrahydrocannabinol content. High concentrations of tetrahydrocannabinol, or TIIC, produce temporary euphoria when smoked. Federal law prohibits culti- vation of any hemp plants containing THC. Otho coun- tries produce the crop for Pulp for paper, fabric for clothing, biomass for fuel, ingredients for paint, foods and other items. Around the turn of the century it was used extensively for rope and sail Cloth on ships. The draft of the bill that passed the House of Representatives' Agriculture Committee and was headed for the Judiciary Committee places the fimutcial burden on the private sector. Cultivation experiments "lust pass the scrutiny of law enforcement agencies because of a 1937 tax law that made cannabis saliva economically unfeasible to grow and later laws that made it a felony to cultivate. The maximum penally is 10 years in prison, unless the Drug Enforcement Agency of the U.S. Department of Justice issues a cultivation permit. The DEA and the Honolulu police Department make no distinction between industrial hemp plants and marijuana plants, as do heutpsters, or people promoting the use of industrial hemp for eonuncr- cial products. The hearty cannabis saliva produces a hick erade of fiber will, a sters said. Roger Christie is co- founder of the 6 -year-old Hawaii Hemp Council and a Hilo resident, Economic interests of Dupont, a munu- facturer of synthetic materials among other things, and the Federal Bureau of Narcotics decades ago demonized the industrial hemp plant and changed its name to marijua- na, he said. Christie said he world like to plant 10 acres at a cost of a few hundred dollars per acre. The outcome could generale revenues of about $10,000 per acre, he said. Psychoactive effects are not present in the low -THC plant and smoking it would give people headaches and a sore throat, he said. Howard Nakamura, an economist with the County of Hawaii undertook research to find ways to diversify Big Island agriculture, under the direction of Mayor Stephen Yamashiro. Unless you know where the advantages are — whether hemp is used for food, energy or pulp — it is really difficult to say what is possible, he said. "We fell obligated to look at all possibilities and hemp was one of them," he said. "We wanted to see if the pro- lific claims about the plant were true." About 30,000 acres of for- mer sugar cane land in Hamakua and 17,000 acres around Ildo could be used for hemp cultivation, although some of it is already being used for other agriculture, he said. The benefits of industrial hemp are being weighed against important legal and economic considerations. "We have to look al it Gum an economic viability Island - point]," said Tish Uyehara, deputy director of the slate I)rnart n,rnl of A—w,fl lir„ in hemp processing, not in growing it. It is expensive to install infrastructure and equipment, she said. Already, Hawaii is at a dis- advantage because of its high cost of labor and water. If locally grown fiber isputon the open market, it might not compete well with fibers grown in China, she said. Therefore, expanded coffee production may be better than industrial hemp cultivation, given the legal hassles and a lack of research money, she said. Reps. David Tarnas and Cynthia Thielen sponsored the House bill, which also calls for tests in seed produc- tion and fiber quality. "We have agricultural lands, we need agricultural products," said Thielen. "We need to develop a fund to grow hemp locally and do research and so we're looking for private funding" "This is an economic development issue, not a drug issue. We're talking about jobs and agriculture lands used in a productive way. The big hurdle is educating our colleagues," she said. If the Legislature and state government do not act, Hawaii will lose the opportu- nity to become a leader in hemp seed production. Sidney Hayakawa, DEA's agent -in -charge, said before the university does a study on hemp, it would have to prove there is no possibility of diversion, meaning theft of the plant for other uses. A DEA permit is required. "We'd have to recommend where to get seeds, but we haven't gotten that far," he said. The agency makes no dis- tinction between high -content THC or low -content THC hemp plants. The federal penalty for cultivation is a maximum 10 years in prison, regardless of the THC content of the hemp, according to Hayakawa. "Why cannabis when there are other types of hemp?" said Lt. Michael Moses of the Honolulu Police Depart- ment's Narcotics/Vice Division. He said the police depart- ment is against any form of hemp production if it contains THC, specifically cannabis sativa. lie said for law enforce- ment purposes it is difficult to distinguish one hemp from another. And cross pollina- tion of low -THC industrial hemp with high -THC plants could make industrial hemp attain a higher- THC level, he said. David H. McCoy, chief executive officer of The Estate of James Campbell, said he has been unable to judge the economic viability of commercial hemp produc- tion. But there is no doubt Hawaii's soil and climate conditions lend themselves to hemp cultivation, he said. "Legalizing the cultivation of hemp could add another agri- cultural opportunity," McCoy said. Laura Criho, public re Lr tions coordinator for the Colorado Hemp Initiative Project, said Colorado passed a bill similar to IIB 284. The all -volunteer group educates the public about hemp isuies. If enough states pass such legislation, it will send if mes- sage to the federal gnvenr merit Showing than industrial hemp regulations should he fixed, site said. No one in the nation has grown hemp in 517 years; that is why rescuch i. nn 0,n= =R pfDo�rvo?oo25mwoo'g g�rvwc:^oS�o'��o�c•oo E -nn :n g e^> d ry o'er g E°S o _deo y �•,� M1 rt �,'o. b to Ct) CD rvo-�g 0, •°q,n _'i9�m�.��tr'rv'p"Ow m'w rvcgog00°��^`. yY CD Ra_'msEn�h�'y�rv�•"0.0 v0 goon-•n.a0�m'''H� o Zyv_o c 5' n �o .o o m 5a a c gv,�r.K do ry w w 0v�a w ��e o �'' �Dg zc�.Wmw d0 9 g' ° -a y =a m CD e�w' a_. •c`o•. S•300 a -n c�rrt iv 0—"o h'< 0 ono C:7- og�o❑>>rv$oco.w<:mw�cm.co.^ "��eo „'y'yy°c�;o oo..y,2eg000hn W �0v�,moar.w,ov ado CD 9=0000 .w o ma m ry g .c _rt c y n =ag w° �v o zs o g rcOle g�S��h W ga o.o 0'0 a.P ^o.� wnE.nW g rn ua oo 3tj '0'=. o.aw v o r, M1 (fit �' 7 O T ("j R Q+ a O O n0 n no two .n �. 9^$ g o ry o f9 m D$ 00�' _. d M1 ° (� d o d"O ,., c LQ v ' a C neorvdoa�❑C'35'e°_.» Rw g mmn o- `'.B a o_voog C 00 F,0 °co`O00=�EEn. o'�'g'T °Ca>;cawn dyo•tv�o' O Q:. S 9 w O O n A am— g— 5 00 ... 03. O, M1 o c CD :. w v.' w w' rvp. O m ,' ^F fD o m (� d m 0 0^ � o a ?• 7 o d o a o H y G� h w HEMP INVESTMENT OPPORTUNITIES Translated from OkiInvest by Petra Sperling Imagine, in Germany, of all countries, a revolution has broken out. Of Lourse not just like that. First, some preparations were needed to pave the way, such as taking legal action in order to get permission and safeguard official federal subsidies. With everything being taken care of, nothing can stop the revolution anymore. This is a green revolution, and suppo3ed to put the petro -chemistry -based power- and raw -materials industries onto healthier feet. After several fruitless attempts, e.g. at growing bulrush or flax, it has now been discovered that hemp seems to embody the "egg -laying, wool -producing dairy pig" that is holding spellbound environmental protectionists and farmers, as well as product developers and local politicians. Advocates of the new hemp industry have demonstrated, during the past couple of years, that a host of new hemp products can be both devel- oped and marketed. Hemp stores dealing in import goods have demonstrated a growth rate akin to that of the plant, and have been displaying a near comprehensive and permanently expanding line of hemp products. The second phase of the green revolution will now be dedicated to agriculture, which has become lucrative due to the EC subsidy of about US $1,000 per hectare (as yet, seed availability has been a major problem), and to the technological application of this annual raw material. Three areas are the focus of attention: building materials, pulp for paper prodirction (new methods produce hemp pulp at half the cost of wood pulp), and power p—roduc�tion. Since a revolution like this cannot only be frnarced through banks, interesting investment opportunities open up"M-21 t ese areas, as, Matthias Schillo is the deputy chairman of the Deutsche HanjUeseAschaft (German Hemp Corporation) and CEO of the TreuHanf Investitiom GmbH d Co. KG (Hemp Trust Investment Inc.), Berlin. GERMANY Assisted by, among others, the Federal Environmental Foundation, a scientific study (budget $190,000) is being conducted to determine short- term feasible product lines based on indigenous hemp. The applicability of hemp is extremely multi -faceted. Up and coming are: food, fashion, cosmetics, and building materials (insulation, flooring, additive for concrete and paints, fiber -board products). Hemp furniture is available, as well. In Germany, the cultivation of low -THC and EC -licensed hemp species is not prohibited anymore, although it remains subject to authorization (by the Federal Department of Agriculture). In November, a limited partnership was founded in Berlin, with the aim of getting involved with the commercial development of the German hemp industry: TreuHanf Investitions- mid Beteiligungs-GmbH & Co KG (Hemplrust Investment and Shares Inc.) Last year, Matthias Schillo renounced his well -paying position of judge at the Berlin Supreme Court in order to dedicate himself to his task of CEO at the TreuHanf GmbH. In 1994, the company was co-founded., amongst others, by Matthias Br6ckers, book author and initiator of the Hanf-Haus (Hemp House) store chain. TreuHanf has so far remained rhe only hemp enterprise publishing official share issues, on 100% hemp paper, available for DM 10. The plan is to offer opportunities in shares and incorporation of enterprises growing, processing or marketing hemp. Specific thought has been given to a heating power plant in Brandenburg that is to be run on hemp seed oil. TreuHanf calculates all projects on a medium-term basis without taking the EC subsidy into consideration. So far, the company has imported hemp fabrics in bulk and negotiated co- operation agreements, e.g. with Polish companies. In their lawsuit for approval of cultivation, the Brandenburg farmers were supported by TreuHanf. Another project, apart from the (profitable) in -advance financing of HanfHaus stocks, is the pulp factory Eugen Jetter NEGmbH in Brandenburg, which needs about DM 1.7 million to start up hemp paper production. A transformation of TreuHanf from a co-operative credit to a co-operative share operation is in the planning, with an increased capital of DM 3 million. This year's projection amounts to investments of at least DM 400,000. Dupetit Natural Products offers a wide range of hemp products (cosmetics, building materials, food, hemp pillows, etc.). Owner Alfredo Dupetit wants to grow Felina 34 on 12 ha this year. Plans to c ange mto a joint-stock company are going to involve eco -investors. THC The Ha sf Company - Peter Homans GmbH is a successful hemp -textile incorporated company which has positive results to show already with a turnover of around DM 3 million in 1995. Peter Homann and Claudia Lanius started the company by selling vatic us hemp garments in 1994. With their slogan "Fashion & Ecology", they have been marketing jeans, blouses, dresses jackets, and vests, as well as shoes, belts, and backpacks. CEO Homann would like to find private investors for at least DM 1 million in order to cover part of his bank loan interest and strengthen his own capital stock (the company's capital stock amounts to DM 50,000;. A minimum investment of DM 20,000 is currently being discussed. For 1996 he expects a sales increase of 60%. The founders' pioneer spirit as well as their "bioneer" work have been worth it, and now eco -investors are f' 50 :I :i ibl I);D,' It LO FALL 1998 H.A.N.Ee.V. And finally, the H.A.N.Ee.V. association, located in the Hanf-Museum (hemp museum) in Berlin, has set up a hemp agency and mailed out forms in order to mediate between producers, consumers and investors (for a small fee). The agency is still looking for people to invest in active as well as silent partnerships, or give credit security, or participate in any other form of hemp investment. AUSTRIA Zellform GmbH for Ecological Fiber Technology is counting fully on hemp as a raw -material. In 1995, the limited corporation turned over approx. SS 0.7 million. 1996 should show a consider- able increase due to the development of their "hempstone" (see HW vol 2, # 1, p. 12). In order to make the establishment of the planned line of products happen, a complete financial package is needed. For this expansion, the company is now also looking for silent partners supplying risk capital to a minimum of 6S 50,000. Rosemarie Fink Manufaktur Rosemarie Fink's attractive, high-quality hemp fashion line more than doubled her turnover to about SS 1.4 million in 1995. She is expecting the same to happen this year, especially as there has been a great demand from mail-order companies such as her major buyers Austrian Panda (WWF), Greenpeace (Hamburg), and Dutch DOEN; even Israel and Iraq have investigated the company. In order to finance the growth of her business, R. Fink is planning to establish a limited corporation with silent partners. SonnenHaus ko-Handels-GmbH - From an ecological vision to economic success." Amongst other products, this limited company supplies hemp textiles througi a tranchise system. In order to pay off bank loans, and finance the young enterprise's ambitious concept of expansion in both Germany and Austria, SonnenHaus has been offering silent partnerships (at least 6S 35,000), as well as capital stock in case of major investment. Turnovers are expected to amount to 6S 5 million this year, and 6S 5o million in 1997. Rohemp Hanfhandels-GmbH is one of R Fink's main suppliers. The limited company is a subsidiary of Ro'iemp S.A., founded in Rumania ( with US $ 24.000) in 1994. With their own contribution to research and development, partly in co-operation with the Katalyse-Institut in Cologne, Rohemp has been trying to give industries an incentive to use hemp as a raw -material. In the meantime, a cultivated area of 2,000 hectares is at their disposal in Rumania, with an optional 32,000 hectares available. Due to their pioneer achievements and experienced business leadership, the company can be expected to establish itself as a major supplier in the booming hemp market. These future expectations explain the prices investors have to pay: a 1% share in the combination Rohemp SA (110 shares) and Rohemp-Handels-GmbH (nominal 6S 5,000 silent partnership) ;mounts to a current sum of 6S 210,000. Turnovers are planned to catch up with the present 6S 21 million "market capitalization" in three to four years at the latest. HUNGARY Di sgy ri Pap rgylErRt. (DIPA) The Hungarian hemp paper factory is planning a partial privatizing of shares. It has grown from a paper mill established in 1782 into an enter- prise producing high quality hemp paper for printing bonds and bills, and other kinds of specialty paper. The unbleached'DIHEMP' paper is produced with nothing but natural ingredients, like chalk, and is very well suited for envelopes, books, and even laser printers. DIPA is also a sup- plier of raw hemp. SWITZERLIND Hanfinvest eG supports the expansion of the hemp industry and offers itself as a trading partner. They run a small hemp store in Basel. Shares in the company cost 5oo franks. Hanf-Center HC AG was founded April 1, 1995 with a capital stock of 100,000 franks. The Zurich store has already reached a monthly turnover of 15,000 franks. Plans for production facilities and issuing of owners' shares will be realized before long. In the same location with the store you can find the Hanfplus Genossenschaft and the Hanfplus Verein (the Hemp -Plus Co-operation and Club), both of which support and conduct the political and economic development of the hemp industry. SWIHTCO The US subsidiary SWIHTCO was a let -down for many Swiss farmers buying relatively expensive hemp seed from them. First of all, they received 15 different kinds of seed, which are difficult to plant at the same time, and furthermore, SWIHTCO only guaranteed purchase on a yield of at least 2,000 kg per hectare, which seems to have been impossible to achieve by anyone. The company's phone number has recently changed, and Oko-Invest have been expecting a reply from them—in vain. FALL 1998a:: Pil:)WV P'Lo 51 1 40 TherapeuticHemp Oil The nutritional copnposition of oil from the mmijtira plant could be beneficial to your bealib TO MOST people Comabir maim a synonymous with mar- ijuana, but the plant's Lat.n name means the'tsehd hemp.• Species desigmted iotivo tusrt- full ate usually among the most important of all crops. In fact. the utility of hemp is manifold: the plant has provided human beings with fiber edible seeds, an edible oil. and medicine, not just a notorious mind -altering drug. In our part of the world, these other uses of hemp ate no longer familia We rarely use hemp fiber and know tittle about hemp medicine. nSome cancer patients have found it to be a supe. nor remedy for the nausea caused by chemotherapy, and some people with multiple sclerosis are grateful for to relaxant effects on spasoc muscles.) Hemp seed is sometimes an ingredient in bird toad otherwise; edible produce bun Casaba r®w am vir. tuaUv unknown. This may all change. In many para of the country, pttimomrn of hemp cultivation are working to educate people about the immense potential of thea plant and to reintroduce it into com- mas They champ an harp as a renewable sohuQ of pulp for the manufacture of paper as a superior fiber for making cot. and as a new food that an be proem 'into everything nom a milk sub, statute to a kind of root. Hemp seeds contain 25 percent high quality protein and 40 percent fat to the form of an exeellast quality oil. Hemp oil is just now coming on the market. Produced by the' Ohio Hempery in Athens. Ohio, it will be sold through natural food states in grill opaque battle to be kept under eefrigeradon. It has a remarkable fairy aad profile, being )ugh in the desirable omega -35 and also delivering some GLA igamma-linolnic add) dart s absent from the fees we normally a. `uandonally Delated doctors believe all of time eampotadt to be beneldr. ficial to hsa Hemp oil contains 37 parentlitioldc Ila) and 19 pemmt linolenic (LNA) cads, in the dues to one radon that matchn our nutritional needs. Throe an the eamdal fatty nods )FPAsI— w called because the body cannot maks that and must get them from external sources. The beat soums are ods from freshly ground grains an, I whole seeds, but FFAs are fragile and quick - Iv Inas fir. tai -:Y. EF.Af arr dr buhM}ing bwcka a king �h= fats such as eicosapettcsmtie (FPA) and docaaanaoe hoacid (DHA), that occur rnrruaily lm the fit of cold -waver fish tike sar- dines, mackerel. salmon. bluefish he ear* std, to a Jesse extent tutu. Adding these foods to the diet ssmn to lower risks of heat arracks because omega-3 fatty adds redism the doeang tendency of the blood and improve cholesterol profiler They also have a natural and -inflammatory effect that make tem utaui for Pen - pie with arthnns and autoimmune disorders. Health food stores stock many brands of EPA/DHA supple - it= m in the form of fish oil capsula I usually do not recommend them because 1 dunk m's better ro get your esserneal faro sods in foods, and 1 worry about roroe eontanam unns fah oil supple- ments. But what can you do if you choose, for one reason or artodri: not to eat huh? You can ger some omega -3s len expeller pressed canola oil, the only com moo vegetable of that contains them. A.much richer source is flax oiL Flax oil is pressed from the seeds of Lrseon uuh—umnum, the source of linen fiber and an oil better known in this country as linseed oil, the base for oil paints Linseed oil is usuaUv claa- fied as a "drying oil" rather dun a food oil. because a chemical characteristics cause it to combine readily with oxygen and become thick and hard. This tendency to harden on exposure to au quickly netts linseed oil ranad and unfit to a. but nukes it useful as a vehicle for pigment an anva. nThe word -can- vas," by the way, u a relative of "Cannsbis," because cue canvas is made from hemp fibe e) For dietary purposes, flax oil must be pressed at low temperatures, promoted from light heat and arc stontd at cool temperature. and used quickly once the contain - Reprinted with permisalon from the Much/April issue of Natural Health. 'lie Guide to Well-Heing. ISOCHANVRE Is appreciated for its wonderful qualities. extracted from living material, it keeps the energy of the plant quite well. e good Insulating material (norms of the CSTB: Scientific & Technical Center for Building) e High thermic capacity, enjoyable comfort, savings of money on heating. The thermic capacity Is the ability to store warmth and later give It back, it Is the'Inerfia." This quality, which Is due to the large pro- portion of silica contained In the plant, saves on heating. it conserves warmth In winter and coolness In summer. Original evaluation Is In progress, as the current common Insulating materials have no Inertia. REACTION TO TEMPERATURE DIFFERENCES: VERIFICATION OF INERTIA • In autumn, the owners of Isochanvre houses activate their heating systems 15 days atter their neighbors. • In winter: less consumption of heat, less humidity. • In summer. Very often an attic floor that Is classlcally Insulated Is unbearable (more than 110 degrees F). The owners of an Isochanvre house could establish that the highest temperature wouldn't go over e0 degrees F with only 2 degrees difference between ground floor and first floor and that without any precautions in the shutters and windows. The walls are made of 23 cm Isochanvre only (wooden frame Included). e The temperature of an Isochanvre slab can be 62 degrees F In ambient air of 65 degrees. e Excellent acoustic Insulation: for example, In renovation, you can very easily Insulate an existing partition In place of piaster or'contre Jolson' against a partition by blowing. • Breathes, prevents condensation. This an Indispensable quality for building, In order to Preserve the health of the Inhabitants and the preservation of the other materials. • Setf-draining and waterproof, It is excellent against humidity and saltpeter (Important In renovations). Rather than hiding everything against a partition, It Is better to use Isochanvre Construction with lime directly on the wall. . Non-flammable, without any toxic smoke. *Not eaten by rodents, termites, Insects (because of sllca content) e Funglok lai e Antibacterlologlcal e Easy to use thanks to the ease of working with lime and the fibrous character of Isochanvre. • It keeps a flexibility due to the trimmed Isochanvre fibers: Isochanvre does not crack: which Is the strongest, the oak or the reed? Better ask La Fontaine. Concrete Is made of round gravel set Inside a binder. A metal wire netting Is necessary to offer it suppleness. By contrast, a rigid wire netting would make Isocchanvre crack. Concrete Is hard and breakable: Isochanvre. made with lime. Is supple and resistant. • Ideal for zones where cyclones and earthquakes are frequent thanks to the steadiness and lightness of Isochanvre. • Lightness (appreciated In floor renovations). • Able to use fewer finishing touches: no plaster, no painting, no wall paper. ONE SINGLE DISADVANTAGE: The future users of Isochanvre often ask us: 'What are Its drawbacks?' The persons who have used It have only one reproach to Isochanvre: It not well enough knownt Even Its price Is attractive because ISOCHANVRE has the best quality/price/ variety of use ratio of the biological Insulating materials. It's also the most falthful of these materials for the respect of the universe. :lobally, a house completely built In ISOCHANVRE Is quite the same price as a conventional construction due to the Nmpllflcatlon of the construction. Further, the quality and comfort are much superior, and the economy of heat Is significant. Ch&nevotte Habitat -'Le Verger' - F-72260 Rene - T61.:43 97 45 18 - Fax :43 97 65 44 —148— xN�G m A o in R7 3 s ,a a P .Qi Ot p C , 3 rn c o 0 C sem^=_^ 9_ Ach ZZ N N ME S �= as o c�tp� A A �to ZO O G.. r N in =r rn 0 3z U) 2 mcn 0 me a� cn 3 �m m I=n • i i%� im a� ' m c1 z Z y o x o a a F o= _ '" a I r i F®N.A= e o ro c o� zy a c0i 90'a --4 . m ;0, tV4 3 N � O Gi c FSFi • p NI m > z = U) $ ; 0 c o --I ° 4 p+ 2 9 ' O me 0, tm s N Z. z 'p i � 1 y m .{ s � i V 6 o .. = v 3 O (� w m I C tn 0 I I =r rn 0 3z U) 2 mcn 0 me a� cn 3 �m § 712-1240,1 HAWAII PENAL CODE 448 ./ cation, stupefaction, depression, giddiness, paralysis or irrational behavior, or in any manner changing, distorting or disturbing the auditory, visual or mental processes. For the purposes of this section, any such condi- tion so induced shall be deemed to be an intoxicated condition. "Intoxicating liquor" means any substance defined as "liquor" or "intoxicating liquor" by section 281.1. 'Wanjuana" means any pari of the plant (genus) cannabis, whether growing or not, including the seeds and the resin, and every (l/ alkaloid, salt, derivative, preparation, com- pound, or mixture of the plant, its seeds or resin, except that, as used herein, "mari- juana" does not include hashish, tetrahydro- cannabinol, and any alkaloid, salt, deriva- tive, preparation, compound, or mixture, ,1 whether natural or synthesized of tetrahy- drocannabinol. "Marijuana concentrate" means hashish. tetrahydrocannabinol. or any alkaloid, salt, derivative, preparation, compound, or mix - tare, whether natural or synthesized, of tet- rahydrocannabinol. ":vlinor" means a person who has not reached the age of majority. "Ounce" means an avoirdupois ounce as applied to solids and semi-solids, and a fluid e 7ctition ct,meains %C s tr," enti. sC, veterinarian,p yrcla� scientific investigator, or other person li- censed, registered, or otherwise permitted to distribute, dispense, prescribe, conduct research with respect to or to administer a controlled substance in the course of pro- fessional practice or research in this State. (2) A pharmacy, hospital, or other insti- tution licensed, registered, or otherwise permitted to distribute, dispense, pre- scribe, conduct research with respect to or to administer a controlled substance in the course of professional practice or research in this State. "1b distribute" means to sell, transfer, pre- scribe, give, or deliver to another. or to leave, barter, or exchange with another, or to offer or agree to do the same. "To sell" trio urs to transfer to another for consideration. [L 1972, c 9, pt of § 1; am L 1975, c 163, 4 6(a), (b); am L 1979, c 112, § 12; am L 1984, c 122, § 2;amL1987,c 176, § 6 and c 356, § 11 § 712-1240.1. Defense o promoting. It is a defense to prosecution for any of - /1:, fense de3ned in this part that the person who possessed or distributed the dangerous, harmful, or detrimem.,il drug did so under authority of law as , practitioner, as an ultimate user of the drug pursuant to a lawful prescription, or as a person otherwise authorized by law. ;L 1977, c 137, § 11 4 712-1241. Promoting n dangerous drug in the first degree. (1) A person ceramics the offense of pro- moting a dangerous drug in the first degree if he knowingly: (a) Possesses one or more preparat ons, compounds, mixtures, or substances of an aggregate weight of: (i) One ounce or more, containing methamphetamine, heroin, morphine, or cocaine or any of their respective salts, isomers, and salts of isomers; or (ii) One and one-half ounce or more, containing one or more of any of the other dangerous drugs; or (b) Distributes: (i) Twenty-five or more capsules, tab- lets, ampules, dosage units, or syrettes containing one or more dangerous drugs; or (ii) One or more preparations, com- pounds, mixtures, or substances of an aggregate weight of: (A) One-eighth ounce or more, con taming methamphetamine, heroin, - morphine, or cocaine or any of their respective salts, isomers, and salts of; - isomers; or (B) Three-eighths ounce or more,., containing any other dangerous drug; - or (c) Distributes any (langerous drug in any amount to a minor. (2) Promoting a dangerous drug in the . first degree is a class A felony. IL 1D72. c 9, pt of § 1; am L 1975, c 163, § 6(U; am L 1979, c 112, § 1; am L 1981, r 31, 1; am L 1982, c " 9, § 1; am L 1958, c 146, 1; am L 1989, c 163, § 11 § 712-1242. Promoting a dangerous drug in the second degree. (1) A person commits the offense of pro- mntinc H dangerous (Ir 'ue in the second de- gree if he knowingly: )a) Foescsses twenty-five or more cap- sules, tablets, ampule=-, dosage units, ori syrettes, containing one ur more dangerous drugs; or (b) Possesses one or more preparations, compounds, mixtures, or substances of an aggregate weight of: (i) One-eighth ounce or more, contain• ing methamphetamine, heroin, mor - 449 QFFF.T phine, or cocaine or ar live salts, isonrurs, am or (ii) One-fourth oun taming any dangerous (c) Distributes any d; any amount, (2) Promoting a daaKer second degree is a class. $ f( pt of§ 1; amL197..5.c 1 1982, c 9, § 2; am L 1987, 356, § 2; am L 1988, c 291, 163, S 21 § 712-1243. Promoting a drug in the third degree (1) A person commits th moting a dangerous drug in if he knowingly possesses drug in any amount. (2) Promoting a dangers third degree is a class C fel( pt of § 1; am L 1975, c 163, § 712-1244. Promoting a in the first degree. (1) A person commits th( moting a harmful drug ir: tl he knowingly: (a) Possesses one hundr sulec or tablets or dosage one or more of the harmful more of the marijuana cont combination thercof. ar (b) Possesses one or ino. compounds, mixtures, er s aggregate weight of one containing one or more drugs or one or in,,- of concentrates, or any comb or (c) Distributes twenty -r1 sules or tablets or dosage r. one or more of the harmitil more of the marijuana colic combination thereof: or (d) Distributes one or tions, compounds, mixtures of an aggregate weight of or or more, containing one r harmful drug, lir one or in.. juana concentrates, or an thereof; or (e) Distributes any harm mar'juann concentrate; in a: minor. (2) Promoting a harrnful dr degree is a class A felony. ;L § 1; am L 1975, c 119, § I a.: l� 103d Congress, 1st Session - - - - - - - House Document 103-169, ol. 1 NORTH AMERICAN FREE TRADE AGREEMENT, TEXTS OF AGREEMENT, IMPLEMENTING BT.LL, STATEMENT OF ADMINISTRATIVE ACTION, AND REQUIRED SUPPORTING STATEMENTS MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMIrnNG NORTH AMERICAN FREE TRADE AGREEMENT, TEXTS OF AGREE- MENT, IMPLEMENTING BILL, STATEMENT OF ADMINISTRATIVE ACTION AND REQUIRED SUPPORTING STATEMENTS NOVEMBER 4, 1993.—Message and accompanying papers referred to the Committees on Ways and Means, Agriculture, Banking, Finance and Urban Affairs, Energy and Commerce, Foreign Affairs, Government Op- erations, the Judiciary, and Public Works and Transportation and or- dered to be printed i 29525 Federal Register Presidential Documents Vol. 59, No. 108 Tuesday, luno 7 1994 Title 3— - Executive Order 12919 of June 3, 1994 The President National Defense Industrial Resources Preparedness F By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Defense Production Act of 1950, as amended (64 Stat. 798; 50 U.S.C. App. 2061, et seq.) and section 301 of title 3, United States Code, and as Commander in Chief of the Armed Forces of the United States, it is hereby ordered as follows PART I—PURPOSE, POLICY AND IMPLEMENTATION Section 101. Purpose. This order delegates authorities and addresses national defense industrial resource policies and programs under the Defense Produc- tion Act of 1950, as amended ("the Act"), except for the amendments to Title III of the Actin the Energy Security Act of 1980 and telecommunication authorities under Executive Order No. 12472. Sec. 102. Policy. The United States must have an industrial and technology base capable of meeting national defense requirements, and capable of con- tributing to the technological superiority of its defense equipment in peace- time and in times of national emergency. The domestic industrial and techno- logical base is the foundation for national defense preparedness. The authori- ties provided in the Act shall be used to strengthen this base and to ensure it is capable of responding to all threats to the national security of the United States. Sec. 103. General Functions. Federal departments and agencies responsible for defense acquisition (or for industrial resources needed to support defense acquisition) shall: (a) Identify requirements for the full spectrum of national security emer- gencies, including military, industrial, and essential civilian demand; (b) Assess continually the capability of the domestic industrial and techno- logical base to satisfy requirements in peacetime and times of national emergency, specifically evaluating the availability of adequate industrial resource and production sources, including subcontractors and suppliers materials, skilled labor, and professional and technical personnel; (c) Be prepared, in the event of a potential threat to the security of the United States, to take actions necessary to ensure the availability of adequate industrial resources and production capability, including services and critical technology for national defense requirements; (d) Improve the efficiency and responsiveness to defense requirements of the domestic industrial base; and (e) Foster cooperation between the defense and commercial sectors for research and development and for acquisition of materials, components and equipment to enhance industrial base efficiency and responsiveness Sec. 104. Implementation. (a) The National Security Council is the principal forum for consideration and resolution of national security resource prepared- ness policy. (b) The Director, Federal Emergency Management Agency ("Director FEMA") shall: (1) Serve as an advisor to the National Security Council on issues of national security resource preparedness and on the use of the authorities and functions delegated by this order- 946 Article 707: Advisory Committee on Private Commercial Disputes mgr-ritng Agricultural Goods The Committee shall establish an Advisory Committee on Private Commercial Disputes regarding Agricultural Goods, comprising persons with expertise or experience in the resolution of private commercial disputes in agricultural trade. The Advisory Committee shall report and provide recommendations to the Committee for the development of systems in the territory of each Party to achieve the prompt and effective resolution of such disputes, taking into account any special circumstance, including the perishability of certain agricultural goods. Article 708: Definitions For purposes of this Section: agricultural good means a good provided for in any of the following: Note: For purposes of reference only, descriptions are provided next to the corresponding tariff provision. (a) Harmonized System 04S) Chapters 1 through 24 (other than a fish or fish product); or (b) HS subheading 2905.43 nonitol HS subheading 2905.44 sorbitol HS heading 33.01 essential oils HS headings 35.01 to 35.05 albuminoidal substances, modined starches, glues HS subheading 3809.10 finishing agents HS subheading 3823.60 sorbitol n.e.p. HS headings 41.01 to 41.03 hides and skins HS heading 43.01 raw furskins HS headings 50.01 to 50.03 raw silk and silk waste HS headings 51.01 to 51.03 wool and animal hair HS headings 52.01 to 52.03 raw cotton, cotton waste and cotton carded or combed HS heading 53.01 raw flax HS heading 53.02 raw hemp customs duty means "customs duty" as defined in Article 318 (National Treatment and Market Access for Goods - Definitions); duty-free means "duty-free" as defined in Article 318; fish or fish product means a fish or crustacean, mollusc or other aquatic invertebrate, marine mammal, or a product thereof provided for in any of the following: 7-5 29532 Federal Register i ..il. 59, No. 108 / Tuesday, June 7, 191, Presidential Documents ment in establishing the information system under section 722 of the .Act. Each analysis shall identify the critical components of each system. (g) The Secretary of Defense, in consultation with the Secretary of Conr merce, and the heads of other Federal departments and agencies as appro- priate, shall issue a biennial report on critical components _and technology in accordance with section 722(e) of the Act. PART IX—GENERAL PROVISIONS Sec. 901. Definitions. In addition to the definitions in section 702 of the Act, the following definitions apply throughout this order: (a) "Civil transportation" includes movement of persons and property by all modes -of transportation in interstate, intrastate, or foreign commerce within the United States, its territories and possessions, and the District of Columbia, and, without limitation, related public storage and warehousing, ports, services, equipment and facilities, such as transportation carrier shop and repair facilities. However, "civil transportation" shall not include trans- portation owned or controlled by the Department of Defense, use of petroleum and gas pipelines, and coal slurry pipelines used only to supply energy production facilities directly. As applied herein, "civil transportation" shall include direction, control, and coordination of civil transportation capacity regardless of ownership. (b) "Energy" means all forms of energy including petroleum, gas (both natural and manufactured), electricity, solid fuels (including all forms of coal, coke, coal chemicals, coal liquification, and coal gasification), and atomic energy, and the production, conservation, use, control, and distribu- tion (including pipelines) of all of these forms of energy. (c) "Farm equipment" means equipment, machinery, and repair parts man- ufactured for use on farms in connection with the production or preparation 'for market use of food resources. (d) • FertUizpr means any prnduct or combination of products that contain one or more of the elements—nitrogen, phosphorus, and potassium—for use as a plant nutrient. (e) "Food resources" means all commodities and products, simple, mixed, or compound, or complements to such commodities or products, that are capable of being ingested by either human beings or animals, irrespective of other uses to which such commodities or products may be put, at all stages of processing from the raw commodity to the products thereof in vendible form for human or animal consumption. "Food resources" also means all starches, sugars, vegetable and animal or marine fats and oils, cotton, tobacco, wool, mohair, hemp, flax fiber, and naval stores, but does not mean any such material after it loses its identity as an agricultural commodity or agricultural product. (f) "Food resource facilities" means plants, machinery, vehicles (including on-farm), and other facilities required for the production, processing, distribu- dion, and storage (including cold storage) of food resources, livestock and .poultry feed and seed, and for the domestic distribution of farm equipment and fertilizer (excluding transportation thereof). (g) "Functions" include powers, duties, authority, responsibilities, and discretion. (h) "Head of each Federal department or agency engaged in procurement for the national defense" means the heads of the Departments of Defense, Energy, and Commerce, as well as those departments and agencies listed in Executive Order No. 10789. - (i) "Heads of other appropriate Federal departments and agencies" as used in part VIII of this -order means the heads of such other Federal' agencies and departments that acquire information or need information with respect to making any determination to exercise any authority under the Act. .. r {.• {,� Aw frt i s .,r y. �'. I w♦ vl@!nk! 'ft+ "ri'�h;J�,�'h I k" i w ..,! I -+'v v 4..i E°. p 0 m« v V 'y 'O .� " O LY. LC K O W ?+ w 0 >. 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O `• ._ •� JD >, Y N .. 1.: ._ .� u — — m C •_ K - - v = J c: 0%- y O r r DD O JD Y DD V v ON "' L Y Y °� R Y• � y K Y •L F '-' "L C Y '� _�^° � L p^ _T '-' •- O 3~ T. O to 0 G.D'O D0 i V JD.r 0 ON o L c'� cm<c ea m'u '�" c m c e n.==� ✓ 0.4 G `o m o �3'.c-.. 3 �� E°. p 0 m« v V 'y 'O .� " O LY. LC K O W ?+ w 0 >. G _O .� L 0 K v .+' > = E u y o 0 to n. v Y .� ., o H L •p 'O-' � v w O m •N y' c K E c o c K E o' _`? eoc c c .o w o .v y O W r x v G C C m K 'O ^ir .'9 ED .. �° •3 v .� o y u: E .o o= .o` K T W C Z 3 L 3 yO Y .. - K O C Y W m 'LD C E C= U C O A N ">• N 0 C W V U E N '� •ryi Y D o o .y a O to r w C Y UK 0 E; C9 v >. ° d •D 'y L WO L. 41 0 a c : E ti c -J K Y R v a - K g° p- E G a� c° �.�, 'n p O• C Y O X"+. v `� v v _T _c A ❑ �. N O C O K O DD K O ,0 CD .O Y O N L L• ' '`. l N `F 1• K ... F K K ,O 3 Y Y— w p O K O O O u K _ C 0 N DD _ K Y .. .0 DD O O C G O .rl cO N K❑ .Y N y O N DD ._' .G w O. DOD P, mSLY. F O .0 F = ¢ .. a t. C DD u °! 'a WO V .0 3 - K - "r^ j•. -r4 r .�.. M t. ff¢ i a�s 1_i'M trYE9r fM �.1 4 s! HOUSE OF REPRESENTATIVES STATE OF HAWAII STATE CAPITOL HONOLULU, HAWAII 96813 April 10, 1995 Roger Christie P. O. Box 752 Hilo, HI 96721 Aloha, I asked Ken Perrin if there was any problem with the University of Hawaii at Hilo being involved in hemp research. He said no, and noted that he had just sent a note to Jack Fujii asking if any of his faculty had an interest in the research project. The response is enclosed. I mentioned to him about Bruce Matthews' interest in the project, and reluctance to participate because of it possibly jeopardizing his job. Ken said that it would definitely not jeopardize his job and would talk to Bruce about it. He did that and the enclosed note reports back to me on that conversation. Probably the next step is to follow-up with Bruce and see if he can help you out with the permit application. Let me know what he says. Best regards, David A. Tarnas Representative, 6th district South Kohala-North Kona IX 1 (file:265) Flu, FiDUSE OF REPRESENTATIVES STATE OF HAWAII STATE CAPITOL HONOLULU, HAWAII 96813 March 2, 1997 The Honorable John B. Ray Hawaii County Council 25 Aupuni Street Hilo, Hawaii 96720 Dear Councilmember Ray: Last October, the members of the Children's Day and Week Planning Committee had the very difficult task of selecting winners of the Hawaii Leader for a Day Contest. After much deliberations, the six winners were selected. The winners participated in an awards ceremony at Washington Place, were awarded $100 savings bonds, and served as honorary leaders of state and city governments. Governor Noelani Goo, a senior at Sacred Hearts Academy, said she would require community service for minors found guilty of committing acts of graffiti, pay teachers more, and require new families to spend time in classes that will assist families to communicate better. Lt. Governor Devin Scott, a 10th erader at St. the economy by growing industrial hemp, provide more programs for MCA and the Boys and Girls Club, and stop the cutbacks in the arts. Noelani's and Devin's essays, along with the honorary mayors' essays, are attached to this cover. When you have some time, please read through these insightful essays. With warmest aloha, Sen. Suzanne Chun Oakland, Co -Chair Children's Day and Week Committee 7XRark Takai, Co -Chair s Day and Week Committee 97031205 Rep. Dennis Arakaki, Co -Chair Children's Day and Week Committee Devin Scott Lt. Governor St. Joseph High Schoc Grade 10 F I WERE GOVERNOR... I've lived in Hawaii for fifteen years. I think that our state could use some improvement. Here are some of the things I would do to improve the lives of Hawaii children. Because after all, they are the future. /The fust thing I would do would be mainly to help stimulate our economy. That is what would truly help the children. More jobs for them when they get out of college. I would stimulate our economy by taking all the land that was being used for sugar and growing hemp on it. This has succeeded in other countries and I believe it would work'perfectly here in Hawaii. It would bring in much more money than sugar cane ever did and hemp can be used for a lot more things than sugar. Hemp while in the same family as its cousin; the marijuana plant, has no THC or tetrahydrocannabinol (the active ingredient in marijuana) in it. Therefore, it poses no drug threat to our islands. hemp has a variety of uses that we as a state could fully utilize to our benefit Just think: another source of industry besides tourism. We could grow our own jeans. Hemp fibers can be woven into cloth to make clothing, backpacks (a necessity for school going children),and rope among other things. If we started growing it now we could be miles ahead of the competition that would certainly follow. We could export it to other countries as well as companies in the U.S.A. Plus the new industry would indirectly help Hawaii youths by providing jobs for the parents that lost theirs when the whole sugar cane industry went sour. And it would directly help our youths by providing jobs after they got out of school. The second thing I would do would be to provide more things to do for the lids of Hawaii. It is my belief that "An idle mind turns to crime". more youth centers would help combat the problem of increased boredom that infests the minds of Hawaii's children. Programs like the YMCA and The Boys and Girls Club just aren't enough. Hawaii needs to play a much more active role in the lives of its children. we need more programs for kids. more programs to keep kids' minds from straying to drugs and crime. My plan would call for immediate building of more parks with better equipment. Example: Basketball courts, soccer fields, playground equipment, etc. there would have to be one pool for every community. with a small yearly fee for memberships. Communities could form swim teams and compete with other communities. I would also call for the building of skating parks in town. The skate parks would also charge a small yearly fee for membership. They would rent out equipment and sell snacks to pay for the maintenance costs. There would be a beginner section and an advanced section for the varying degrees of skill among skaters. Tournaments and leagues would be a must. Skating parks would keep kids out of the parking lots and streets of our state and keep them out of harms way. Teen nightclubs would be nice too. The last thing I would do would be to stop cutbacks in the arts. The arts, (music, dance, acting, painting, and singing) are a valuable part of our culture and its a shame to see the talents of Hawaii's kids go unnoticed due to the recent cutbacks in funding for the arts. The arts provide character and self esteem for kids in need of it. They provide a sense of belonging and trust for any who get involved. The arts also provide entertainment for the rest of the people. I would pass bills and petition the government to stop cutbacks in the arts. Because if we lose our character then who are we anyway? These are just some of the many things I would do as governor to help Hawaii and Hawaii's kids. Our island has great potential and I would help it to live up to it. Stephen K. Yamashiro Mayor Gaunt of "tzfunii 25 Aupuni Street, Room 215 • Hilo, Hawaii 967204752 • (808) 961-8211 • Fax (808) 961-6553 KONA: 75-5706 Kuakini Highway, Suite 103 • Kailua-Kona, Hawaii 96740 (808)329-5226 • Fax (808) 326-5663 February 13, 1995 Mr. James M. Sheahan, Chief Registrations Unit Office of Diversion Control U.S. Department of Justice Drug Enforcement Agency Washington, D.C. 20537 Dear Mr. Sheahan: William G. Davis Mawging Director Henry Cho Deputy Managing Director We are informed that Roger Christie has a pending Application. for Registration U:der Controlled Substances Act of 1970, for the purpose of starting an experimental hemp growing project. Due to the closing of most of our island's sugar producing plantations, thousands of acres of arable lands lay dormant. We are entertaining all proposals to make these lands productive again, and hopefully we can return about 1,000 displaced workers to gainful employment. Mr. Christie had earlier approached Mayor Yamashiro and secured his endorsement for his project. The Mayor offered the use of county lands for an experimental project growing low grade hemp for commercial purposes. The endorsement was, of course, contingent upon securing the necessary approvals from DEA and other entities. It is our understanding that four items of the protocol have not been met and we trust that Mr. Christie will strive to comply. We do wish to re -state the mayor's support of this effort, and request your consideration for exceptions or exemptions on these protocols, if at all possible. Mr. James M. Sheahan, Chief Page 2 February 13, 1995 This request is made in light of President Clinton's recent Executive Order 12919, dated June 7, 1994, Part IX General Provision (e) which states ..."Food resources" means all commodities and products, simple, mixed, or compound, or complements to such commodities or product, that are capable of being ingested by either human beings or animals, irrespective of other uses to which such commodities or products may be put, of all stages of processing from the raw commodity to the products thereof in vendible form for human or animal consumption. "Food resources" also means all starches, sugars, vegetable and animal or marine fats and oils, cotton, tobacco; wool, mohair, HEMP, flax fiber, and naval stores, but does not mean any such material after it loses its identity as an agricultural commodity or agricultural prcducts." (Note, upper-case and underscoring added.) The president's executive order in our interpretation, now accepts hemp as a food resource, and perhaps can be the impetus to review the restrictions (protocols) on it, whereby, exploration of hemp by-products for its many known positive uses can be more easily pursued. We would like to iterate that Mayor Yamashiro does endorse the efforts of Roger Christie in his plans for the cultivation of hemp and its conversion to products useful to mankind. Any assistance you can render to facilitate the application would be appreciated. Very truly yours, R. B. Legaspi' Executive Assistant cc: Roger Christie T acw int fha i a1&y f ZTm. Island f Oahu-. Po h:AeeE 6. Fhr. son Y C. Cern. lent _L a. tii n i i O A s y � _ C z _ r 9 n d O i � i i O A s o a' m ' 6 p - �'. c RL W �p O � °C n. ^ �c -. m m owPv S a �e +' m � p � �. O S •. `� ? e a�' m a et � o �• � ._:. N r P 5' �. w A m °° 's, A �- e s� m o 0 o. 7 n P � m e' '�R` a n p o �^, - c c• m e c a -m. o .m. - m m ^p ^ e m m P n pS R vP.. � C m yr' O m�� G• � a ^O � .- n � 'O O� °i C r k o `�° w °' o. w `� '� > ^�0.. F S. 2 P G 7 m m n a R "� o m w w^ 'T� "' c. o m a m m 3 m p 3• . .pc- c. c� s� � 3 °t B o o F m o �? :` �� tl :° m 9 3 �• � n ^. w -• P a u w r � o S ? ZZ R � � o'er > F � m C ?' � •�' $. 5 = =. a > � t o _o N �^. .Ni w C. 0 p p •7. � Q "�" A m b A r (=i N p L m O. "j 0 C. N °pD ,�, n m b _ 'y S v m :; o' � ,< o x �_. P c o0. C C. n ° C -°• C ?. mj ` y =: � c � � m w S 7 � F L •o n S G V G V N N p y C" m n m v_, I " m 'g. B � m c? < °. o C n P . •.e " �� c c o � ry m m FO. V � � p "� O C• -n P L �� C M C C�� �_ _ -' � 'e O O P L O " -• C w -- N w •ty m U-` O P G u G O .� o � � .. m` L P � :'. L Rp • � N n n °p .- � .� a P .O. n 7 Produced by socially conscious Chenevotte Habitat, ISOCHANVRE Is an 'Eco' product at every stage of Its existence: 1. Origin A product of an annual plant that . supports agriculture . preserves forests (no wood fibers) . no extraction from earth (without the cnx:lal problems of quarries) . defibration Is mechanical and dry, without the ratting of old: no chemical products 2. Fabrication . non-polluting (no dust, no production of polluted water) . stabilization without synthetic chemical products • small expenditure of energy • simple materials . no waste . working conditions without social nuisance, 3. Packaging Isochanvre Is packaged In 100-11ter sa:ks made of three-ply kraft paper. The microporous paper sacks can be reused for Insulation of critics and floors, without waste or pollution. The product -package pair is generally hard to reclaim, and here all Is resolved. 4. Transport and handling . ISOCHANVRE construction Is 5 to 7 times Ighter than concrete . economical to transport . the IOWUer paper bags are easy to h0n0e, minimizing physical effort S. Construction . Ir" easy to use because it's Imetbased simplifies construction ixampie: 20 -cm monolithic wad •disperses with polyane, Iron supp�rts, additives or binders . economizes on finishing (painting, wall paper) • wide range of use Hemp Is a plant that grows very fast In a very short fhne (3 m in 3 mos) . It has a great vitality. This Illustration confirms all Its qualities. This crystallographic Image, by Its tripartite structure and Ih well dlfferentlated texture, reveals that ISOCHANVRE conserves relatively well the vital quality of the hemp from which It comes. 6. In use • economizes on heat (high Inertia) Not necessary to have floor heating or metallic wire netting . comfort: no humidity; no need for mechanical ventilation . excellent acoustic quc ties . energetic (see photo above) . no maintenance, contrasting with wood (which ISOCHANVRE protectsb 7. lasts over time This is an Important ecological characteristic. During the ISOCHANVRE process, the fibers pass from the vegetable kingdom to the mineral. ISOCHANVRE actually petrifies itself Your Investment In ISOCHANVRE Improves over the years. Archaeologists have fond a bridge from the Merovingian era (500-751 A.D.) built with this process. 8. Reintegration In nature ISOCHANVRE reintegrates Into the biological cycle without generating pollution. Chenevotte Habitat Le Verger' - F-72260 Rene - Tel.: 43 97 45 16 - Fax : 43 97 65 44 —147— Facing page, left - who paved the born Jesse Kuhaulti and today Facing page, right presented WJtli World War II's but I was everything. take mpuku, a veteran of Fomb'ast renowned 442nd Regi- entaTeam. "The 442nd and I teamed up and we brought it in." Todays traveling sumo exhibitions are complex, expensive operations. The tournament this month, a production of Same Two Inc.- is managed by the Nip- pon Television Network Corp. and Dentsu Inc.. an advertising giant. The 442nd and Yempuku brought nine tournaments to Hawai'i through the years. the last in 1984 when Maui - born Jesse "Takamivama" Kuhaulua "as, honored in Ha" ai'i upon his retire- ment from sumo. By thattimeKuhaulua "as a wkiirake. an established and well -loved riki.sIi, husband and father. Kuhaulua is known today as Azuma- zeki Ot akwa, the head of his own sumo uahle of wrestlers_ An orakata, re- man aui- iyama a was s of at Team, o combs ell and 12,000 braided hemp s yokozuna. sponsible for the proper overall care of his young chargee. trains, feeds and houses them under one roof as he would his own familv. Hawai`i's Chad Rowan rose to sumo's highest rank under the guidance of Kuhaulua, and made smno history. This can be heady stuff, but Kuhaulua is well-grounded by the hardships he faced in the 1960s as a pioneer who paved the way for other Island men. He arrived in Japan as a thin, unspoiled and shivering bob From Happy Valley, Maui, who faced a vastly different cul- ture. Homesick from the moment he got off the plane in February 1964. Kuhaulua nevertheless crossed an important threshold in his life when he joined the stable of Takasago Orakam. Unlike todas when many Japanese undei:smnd English. Kuhaulua trained in Japan at a time when hardly anyone around spoke English. Kindness played a large part in KuhauluaIs ability to cope. "The first time 1 saw Jesse in Japan, he cried. - says Yempuku. "Jesse said 'Cee, everv- thing is so hard, the training, and you've got to get up so earl), in the morning.' It's a reeimented life, like a nun in a convent. But the stablemamei s wite. a very nice ladv. was inslnunental In Jesse staying there.' Like any other lowly ti rinee. Kuhau- lua was among the first to iiae and last to go to bed. sometimes in physical pain from the days rigorous uainiml. In between, he served as uvtkebttu. uttending to the needs of hi hei rank- ingwrestlers. including hip ,trig maku- la. Kuhaulua scrubbed hark, vt,hed clothes, prepared meals_ cle-:mid t(,iicts and performed other chores v hbin the confines of his dot mitorylike reii in,_. 'I used to wash clothes by hand. but urdap\ you can do it with coms..1 sass Kuhaulua, whose rasp) %oiee \+al caused by a hard shove on his throat which damaged his vocal cords. The ones coming in today have it easie:- Cununurd iii p,i;r 6U SPIRIT OF ALOHA 17 TEXTILES • APPAREL • DIAPERS • FABRICS • HANDBAGS • WORKING CLOTHES • DENIM • SOCKS • SHOES • FINE TEXTILES (hom canonized fibers) TECHNICAL TEXTILES • TWINE • ROPE • NETS • CANVAS BAGS • TABPS • CARPETS • GEOTEIOILES �!'tltl[�I Tl�S 6P Y THC • MEDICINAL DRUGS FOR: GLAUCOMA VOMITING SPASMS • PSYCHOACTIVE SUBSTANCES OTHER INDUSTRIAL PRODUCTS • AGRNBER COMPOSITES • COMPRESSION - MOLDED PMTS • BRAKE/CLUTCH URINES • CAULKING PAPER • PRINTING PAPER • FINE AND SPEW PAPERS • TECHNICAL FILTER PAPER • NEWSPRINT • CARDBOARD AND PACKAGING BUILDING MATERIALS • FIBERBOARD • INSULATION MATERIAL • FIBERGLASS SUBSTITUTE • CEMENT BLACKS • STUCCO AND MORTAR FOODS • SALAD OR • MARGARINE • FOOD SUPPLEMENTS FOODS GRANOU • BIRDSEED k • ANIMAL BEDDING • MULCH • MUSHROOM COMPOST ��YES TECHNICAL PRODUCTS • BB PAINTS • SOLVENTS -VARNISHES •CHAIN -SAW LUBRICANTS • PRINTING INKS • PUTTY WINES A. SCP.dS. ; PERSONAL HYGIENE • SOAP • SHAMPOO • BATH GELS • COSMETICS Seed �{ake (oherpresinp) • ARM FEED • PROTEIN -RICH FLOUR ^i • ABRASIVE FLUIDS (In medidnol hemp only, THC ieveh in industrial hemp , Sao low) • - � �� � � ��� � —1• •BOILER FUEL • PYROLYSIS FEE DM i • PEST RESISTANCE • ELIMINATION OF PESTICIDES • SOIL IMPROVEMENT IN • WEED SUPPRESSION WITHOUT DISADVANTAGES CROP ROTATION Source: M. Kurus and G. leson, • POLLEN ISOLATION nova Insftn, Cologne, Germany, 1995 •s•