Introduction

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Boris Shcharansky• Founder/CEO of Heartland Hemp Company in Des Moines, IA• Entrepreneur and Hemp Advocate• Eight years of direct business development experience across three start-ups• Registered Lobbyist in Iowa• Graduated: University of Pennsylvania

• Iowa Connection: 27 years Iowa resident Valley High School graduate, West Des Moines Des Moines area business owner since 2004

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Heartland Hemp Company• Founded in December 2014 with focus on hemp-derived CBD products• Developed nationwide and global network of hemp industry professionals• Dedicated to the re-introduction and re-emergence of Hemp as a viable agricultural crop in Iowa

• Co-wrote and introduced House Bill 470 in 2015 Production, Marketing and Distribution of Industrial Hemp and Related Plant Materials Never brought to committee vote Died in first funnel

• Committed to working with Iowa farmers to re-introduce hemp as a commercial crop• Developing relationships with farmers experienced in certified-seed growing

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Hemp’s History

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Hemp in History• Originated in China

• Spread west through India, Middle East, Africa and Mediterranean

• Romans brought hemp to Britain – staple of economy Hemel Hempstead (South England) “Hemp Mill Walk” street names

Sub-Species of Cannabis• All modern cannabis plants are a cross of

Sativa, Indica and Ruderalis

• “Cannabis” describes any of these sub-species

• “Hemp” refers to varieties of cannabis with very low levels of psychoactive THC < 1% THC > 2:1 CBD:THC Ratio

• “Hemp” can also be known as Agricultural Cannabis/Hemp Industrial Cannabis/Hemp

• In 1619 the Crown ordered the colonists at Jamestown to grow hemp to meet demands for England’s maritime ropes & cord.

• Hemp became more important to the colonies as New England's own shipping industry developed.

• Some colonies offered farmers "bounties" for growing it.

• Thomas Jefferson developed a device for processing hemp in 1815.

• Made, paper, clothing and heavy duty ropes

13 Colonies Depended on Hemp

“Mr. Pearce, on my farming plantation(s), I want you to make the most of Hemp and plant it everywhere on my farmlands that haven’t been

previously reserved for other things.”

Probably George Washington’s most famous quote regarding hemp, came from one of his letters to his farm plantation field manager,

William Pearce (Feb. 24, 1794)

The word “marijuana” or “marihuana” came in the late 1890s. The Founders knew the plant as “hemp”

• "There are 100,000 total marijuana smokers in the U.S., and most are Negroes, Hispanics, Filipinos and entertainers. Their Satanic music, jazz and swing result from marijuana use. This marijuana causes white women to seek sexual relations with Negroes, entertainers and any others.“

-Harry J. Anslinger

• “Reefer makes darkies think they're as good as white men.“

-Harry J. Anslinger

Impending Prohibition

In the 1930's, Ford Motor Company operated a successful biomass fuel conversion plant using cellulose at Iron Mountain, Michigan. Ford engineers extracted methanol, charcoal fuel, tar, pitch ethyl-acetate and creosote from hemp. The same fundamental ingredients for industry were also being made from fossil fuels

In 1941, Henry Ford famously, kicked the hemp bio-composite frame of a Ford car

Cannabis or Marijuana?• Introduced as “Medicinal Hemp” or “Extract

of Cannabis” in US Pharmacopoeia in 1850

• Never known in medical community as “marijuana”

• American Medical Association unaware of association between “Marijuana Menace” and medical hemp/cannabis

• 1918 – 60,000 pounds produced on licensed pharmaceutical farms in US!

1937 Marihuana Tax Act

World War II

• When Philippines fell to Japanese forces in 1942 in World War II, the Department of Agriculture and the US Army urged farmers to grow hemp fiber cultivars. Tax stamps for cultivation of fiber hemp began to be issued to farmers. Without any change in the Marijuana Tax Act, 400,000 acres (1,600 km2) were cultivated with hemp between 1942 and 1945. The last commercial hemp fields were planted in Wisconsinin 1957.

• 1970 – Nixon passes Controlled Substances Act Any member of the Cannabis Sativa L. species of plants is prohibited from being grown in

the United States Industrial Hemp conflated with marijuana – DEA targets both

Wild hemp, or “ditch weed,” left over from WWII is treated 90% of DEA plant eradication budget is directed towards this non-psychoactive hemp

• Agricultural Act of 2014 made hemp legal to grow in states that pass hemp legislation

Prohibition, Continued

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Hemp’s Present

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Value of US Hemp Market

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Annual Sales of Hemp Products in United States

Farmed Hemp Acreage in CanadaCanadian Hemp Licensed Acreage 1998-2014

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Breakdown of US Imports of Canadian Fiber Hemp

Hemp Agronomy and Environmental

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Farming/Agronomy Facts

• 90 - 120 growing days• Germination between 2 - 5 days depending on

warm or cold weather• 100 plants/m2 for seed• 200 + plants/m2 for fiber• Nutrient quality similar to canola or winter wheat• Little to no pesticides/herbicides needed• Resilient during drought• Once established little to no field maintenance• Conventional equipment used, combine harvester

with a draper or rigid style header• Stable rotation with soybeans, perennial grasses,

legumes, barley, alfalfa, red & sweet clover

Environmental Benefits

• Deep tap root and broadcast seeding helps soil aeration

• Bio-Accumulator – Absorbs heavy metals and other toxins in soil

• No pesticides nor herbicides

• Minimal fertilizer requirements

• 1/3-1/2 water requirements compared to corn

Hemp’s Future

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Strain Hunting!

BioRefining – Pulp, Lignins, Sugars…and Cannabinoids!• Pulp – consumer paper products, industrial

insulation and building products

• Lignins – bio-based raw material for industrial/consumer products including paints, sealers, coatings, plastics, composites and speciality chemicals

• Sugars – bio-based chemicals, plastics and fuels as well as food/beverage products (hemp vodka and chewing gum!).

• Cannabinoids – non-psychoactive medicinal cannabinoids

• Seeds – food/cosmetics and biodiesel

Hemp – Dual, Triple and Quadruple Revenue Streams• Unique quality – produce separate revenue streams from one crop

Seed Fiber Pulp Sugar Cannabinoids Lignins

Hemp – Superior to Corn in Ethanol Production

Hemp Stalk YieldsPounds per Acre Hemp Stalk 16,000 Tons per Acre Hemp Stalk 8.00Gallons/Acre Ethanol (80 gallons/ton) 640

• Assumes 180 bushels per acre average yield (2014)• Maximum height of 6-7 feet• Grown in 12-30 inch rows• High pesticide and herbicide requirements• No guaranteed contracts

• Hemp stalk yields average 6-10 tons/acre• Planted densely (35-50 plants per SF)• Height of up to 15 feet• Douple-Quadruple biomass per acre• No pesticide/herbicide requirements• 1/3 water use compared to corn• Only single revenue stream – seeds/flowers

separate!

Corn Stover YieldsStover Yield (lbs) per Acre 8,518 Stover Yield (tons) per Acre 4.26Gallons/Acre Ethanol (80 gallons/ton) 341

Will also compete with other markets requiring pulp…not tied just to ethanol!

Hempseed – Multiple Possibilities

• Based on 50% discount to current wholesale price ($2.40 Conventional/$3.55 Organic)• Profitable if processor rents land and under Co-

Op model

• After conversion to oil, ~530 pounds of pressed seed cake will be remaining

Hempseed YieldsPounds per Acre 700Conventional Seed Price (per pound) $2.40Organic Seed Price (per pound) $3.55Revenue per Acre, Conventional $1,680Revenue per Acre, Organic $2,485

Hempseed Yields (Oil)Pounds per Acre 700Gallons Oil per Pound of Seed 45Gallons of Oil per Acre 15.6Price per Gallon, Hemp Oil $60Revenue per Acre, Seed Oil $933

Hempseed CakePounds per Acre (Post-press) 530Seedcake Price (estimate wholesale)/lb $3Revenue per Acre, Seedcake $1,456

Hemp Flowers – Medicinal Cannabinoids!

• Current market supplied exclusively by European hemp!• Monopolized market charges nearly $9,000 per

pound of CBD (pure), or ~$0.02 per milligram• Retail price is ~$0.05 per milligram (2.5 X)!• “Est. Wholesale” based on a per milligram price

of $0.004 per milligram!!!!• Still only represents one potential revenue

source from the crop!

Cannabinoid Profile -- HempPounds Flower Tops per Acre 1,000 CBD Pounds per Acre (5% content) 50Est. Wholesale Revenue (~$2K/lb.) $100,000Current Wholesale Revenue (~$9K/lb.) $450,000

Hempcrete

• Combination of hemp hurds with lime and water• Hemp Hurd -- $2 - $4 per pound (Imported)• Current price to build -- $130 PSF

Depends on imported hemp Local cultivation would dramatically decrease

costs• Hempcrete homes in Texas, North Carolina,

California, New York and Hawaii• Coming soon – Iowa!

Hempcrete

Hemp & Automotive Innovation

A team of researchers led by David Mitlin at Clarkson University in New York have found a way to produce super-capacitors from an inexpensive hemp fiber left over from textile and building material construction that could pave the way for a mainstream super-capacitor.

The American Chemical Society Journal ranks the hemp based material “on par with or better than commercial graphene-based devices”. It says the hemp fiber’s properties work down to 0 C and display some of the best power-energy combinations reported in the literature for any carbon. Fully assembled, their energy density is 12 Wh/kg, which can be achieved at a charge time of less than six seconds.

Hemp Is an Alternative to Graphene

Next Steps?

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• Legislative Support Letters – We Need You!

• Contact your legislators, peers, neighbors, colleagues!

• 2016 Legislative Session

• Visit Our Website and Facebook Page! www.iowahemp.org Facebook.com/FieldsofOpportunity Farmer Resource page

Questions

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