In the past decade, hemp has been the focus of a great deal of attention and speculation. Advocates of hemp have gone so far as to claim that hemp can save the world, yet critics inevitably point to the plant’s controversial connection with marijuana and allude to hidden agendas. In recent years world demand for hemp products has significantly increased, spurred in particular by its popularity in North America and Western Europe. Hemp as an industrial fibre crop unquestionably has significant environmental benefits and innumerable potential uses, but is it economically viable?
The principal suppliers of hemp to the world market today are China and Eastern Europe, where hemp production has never been prohibited, and low wages make economically possible hemp’s traditionally labour intensive harvesting and processing. Enabled by changes in legislation, Western European farmers have recently rediscovered hemp, but substantial E.U. subsidies provide a significant economic incentive to cultivate this crop.
This paper is concerned with two principal questions. First, is the recent pro-hemp movement a passing fad, or does hemp offer sustainable competitive advantages as a commercial crop? In other words, for Canadian farmers, can hemp compete economically with other agricultural crops? Secondly, as a fibre source, can hemp economically compete against established commodity fibres such as wood or cotton?
The paper starts with a brief overview of the hemp plant’s properties, its potential uses, environmental advantages and hemp’s historical prominence. The economic investigation commences with a detailed look at the costs of growing hemp for fibre or seed in Canada based on hemp research done in Canada in 1994 and 1995 and reports from around the globe. The results are given as the break-even prices for fibre and seed respectively. The profitability of growing hemp is dependent on market prices for the unprocessed hemp above these break-even levels.
Next, the principal markets for hemp, and hemp’s suitability and economic viability in these varying applications when compared to established and other emerging alternatives is examined. Hemp processing, in particular fibre separation and seed pressing, is then explored in order to determine the value of hemp’s end products, and thus the realistic cost of hemp to the end user. Since hemp requires considerable processing for certain applications, the economic viability of these processes will be crucial. Pulling all of these factors together, the paper’s conclusions respond to the one overriding question – does commercial hemp cultivation for cbd in Canada make economic sense?
Hemp is an annual herbaceous plant of the species Cannabis sativa, meaning “useful hemp.” It is a high yield commercial fibre crop which flourishes in areas with temperate climates, such as Canada. Hemp grows successfully at a density of at least 150 plants per square meter, and reaches a height of two to five meters in a three month growing season. Every part of the plant can be used commercially (see Exhibits 1 and 2).
The stalk of the hemp plant is harvested for its fibres. The fibre length and the content of cellulose and lignin are important quality parameters for raw material used in the cordage, textile, paper and fiberboard industries. Hemp plants yield three different types of fibre:
Hemp has traditionally been grown for its valuable and versatile high quality (primary bast) fibres. The production of these fibres has traditionally been a very labour intensive process. After harvesting, the hemp stalks are soaked with water to initiate a process of retting (the decompositional separation of the bark-like bast fibres from the inner woody core). After the retting process, the plants are dried and then the fibre must be separated from the hurds, shaken out, and cleaned. Recently, alternative fibre separation processes have been developed, using technologies such as ultrasound and steam explosion, which as much less labour intensive. Once separated, the bast fibres are ready for spinning and weaving into textiles, or for pulping into high quality pulp. Because of their high tensile strength, bast fibres are ideal for such specialized paper products as: tea bags, industrial filters, currency paper, or cigarette paper.
Bast fibres come in two varieties:
1. primary bast fibres which are long and low in lignin. These fibres are the most valuable part of the stalk, and are generally considered to be among the strongest natural fibres known to mankind.
2. secondary bast fibres which are medium length and higher in lignin are less valuable and become more prevalent when the hemp plants are grown less densely (therefore less competition for light), and thus grow shorter, fatter stalks.
The hurds are the short fibred inner woody core of the hemp plant which comprises 70-80% of the stalk. They are composed of libriform fibres which are short and high in lignin. The hurds are essentially the by-product of the process of extracting bast fibre from the hemp stalks, and were traditionally considered waste. Though the fibres are shorter, the lignin content of hurds is similar to wood, so there are opportunities for using the hurds for tissue of newsprint pulp. Hurds can also be used to produce a wide range of products including rayon, biomass fuel, cellophane, food additives, and industrial fabrication materials.
Hemp seeds are also a potentially valuable commodity. The seeds have exceptional nutritional value. They are second only to Soya beans as a source of complete vegetable protein and hemp seeds contain all 8 essential amino acids in the correct proportions humans require. Hemp seeds also contain 30-35% oil by weight. Hemp seed oil is approximately 80% polyunsaturated essential fatty acids (EFA’s). Furthermore, the proportion of these oils in hemp seeds most closely match the ratios which have been determined to be most beneficial to human nutrition. However, although the oil is very healthy, this high percentage of polyunsaturated fats also makes hemp seed oil somewhat unstable and so subject to fairly rapid rancidity unless preserved. Hemp seed oil can be extracted or expressed and used in cooking, or industrial uses such as paints, varnishes, detergents, cosmetics, and lubrication. The left over seed casings are a rich source of protein which can be ground into flour.
The flowering tops and to a lesser extent, the leaves of the Cannabis sativa plant contain delta-9 tetrahydrocannabinol (THC). This chemical substance gives marijuana its psychoactive properties. Generally Cannabis sativa strains with a THC concentration of less than 0.3 % are classified as low-THC or “fibre” hemp. At this low concentration, the psychoactive properties of the hemp plant are nonexistent. Marijuana, on the other hand has an average potency of 5-15% THC. In any Cannabis plant, no THC is to be found either in the stalk or the seeds.
In both its cultivation and uses, hemp is considered an exceptionally environmentally friendly crop. Hemp requires little or no pesticides as it is naturally pest resistant. Hemp is also a natural herbicide known for its ability to smother weeds when grown at a density suitable for producing high quality bast fibre. Hemp also has a lower net nutrient requirements than other common farm crops, since it can return 60-70% of the nutrients it takes from the soil when dried in the field. However, prior to the nutrient recycling, hemp extracts more nutrients per hectare than grain crops due to its fast biomass production. Its deep root system is also very beneficial as it is effective in preventing erosion, cleaning the ground, providing a disease break, and helping the soil structure by aerating the soil for future crops, when it is grown in rotation with other crops.
Hemp is also a particularly high yield fibre crop. In fact, an acre of hemp produces more biomass than most other crops. As a result hemp can be used effectively in many applications as an alternative to wood or fossil fuels. For example, hemp can be used as a renewable, low polluting source of biomass fuel, or hemp pulp could easily replace wood pulp in paper making.
Production of hemp originated in Central Asia thousands of years ago. There is evidence of the use of hemp and marijuana in almost all ancient, and many modern civilizations. In fact, the oldest surviving piece of paper in the world, discovered in China and dating back over 2000 years, was made from hemp. From the 16th to the 18th century, hemp and flax were the major fiber crops in Russia, Europe and North America. Ropes and sails were made of hemp because of its great strength and its resistance to rotting. Paper and textiles were other important historical applications.
As early as 1801, the Lieutenant Governor of the province of Upper Canada, on behalf of the King of England, distributed hemp seed free to Canadian farmers. The government offered to pay premiums and bounties to the “deserving cultivators and exporters of hemp in the Province.” As a result hemp became an important Canadian cash crop. The London, Ontario region was especially well suited to the cultivation of hemp. At its peak, several thousand acres of hemp were grown in Western Ontario alone.
During the late 19th and early 20th centuries, increasing labour costs encouraged a shift away from hemp to cotton, jute, and tropical fibers which were less labour intensive. The decline which continued with the advent of synthetic fibers such as polyester and nylon was accelerated by changes in legislation. Because of its association with marijuana, the cultivation of hemp was declared illegal during the 1930’s in many industrialized as an extension of newly imposed bans on marijuana.
Prior to its prohibition, hemp made a significant contribution to the economic and social fabric of society. It was used extensively for ropes, twine, tough thread, textiles, paper, building materials, cellulose plastics and resins, as well as food and oil from the seeds. World production peaked in 1940 at about 832 000 tonnes of fibre.
Since 1992, a number of European countries including France, the Netherlands, England, Switzerland, Spain, and most recently Germany have passed legislation allowing for the commercial cultivation of low-THC hemp. In fact, the E.U. has recently been promoting hemp cultivation by providing subsidies of approximately C$1400 per hectare to grow hemp. In 1992, world production of hemp fiber was 124,000 tonnes with India, China, Russia, Korea and Romania as the major producers. In these countries, the cultivation of hemp has never been prohibited.
In 1937, the United States government imposed a heavy tax on hemp producers under the Marijuana Tax Act. Canada prohibited marijuana, and thus hemp production in 1938 under the Opium and Narcotics Control Act. Production restrictions were lifted from 1943 to 1945 in support of the war effort, when hemp supplies from the Far East became scarce. In 1961, the Canadian Narcotics Control Act (CNCA) allowed Cannabis to be grown at the discretion of the Health Minister for research purposes only.
In 1994, under the CNCA, one license was granted to a Canadian company, Hempline Inc., to grow low-THC hemp in Canada under the strict supervision of the authorities, for research purposes only. This was the first time that a such license had been granted under the CNCA to a private sector organization. As a condition of receiving this approval, the originally planned crop of 12 plots covering approximately 100 acres was reduced to one experimental field totaling 10 acres in size. The license granted to Hempline was valid for one growing season only. Reapplication was required on an annual basis for permission to grow subsequent experimental crops.
A second condition of licensing by the government was that the produced crop was to be donated to interested parties (that also required government permits in order to process hemp) for experimentation and research only and Hempline was prohibited from receiving revenue from any of the hemp crop. Also, the permit required Hempline to hire police officers to keep constant surveillance on the crop, and the authorities retained the right to periodically and randomly test the plants to ensure that they fell below the allowable THC level of 0.3%.
In 1995, research licenses were granted to seven groups across Canada ,under identical conditions. A number of these studies were joint efforts between private industry, academics and government.
In Canada and the United States the possession or sale of processed fibre hemp or hemp products has never been prohibited, although importing of hemp products into Canada is formally prohibited, but in practice is not restricted. Clothing, paper, rope, twine, oil, and bird seed have been some of the most common uses for hemp in Canada. In order to meet the demand for these and other hemp products, Canadian industry has been forced to source hemp internationally.
There are two potentially viable approaches to growing hemp commercially: growing hemp for fibre or for seed. If hemp is grown for fibre, it is sown very densely (a seed rate of 55-70 kg/ha is standard, though for very high quality textile fibre a much higher seed rate can be used). Since hemp grows so quickly, at this density hemp can effectively out compete weeds, and so weed control measures (herbicides) are not needed. If hemp is grown for seed, it is grown much less densely (typically 10 -15kg/ha) and is not as effective at suppressing weeds, so herbicides will probably be required. Hemp seed may be drilled or broadcast, though drilling is recommended for uniformity. A standard grain drill or modified alfalfa seeder can be used for sowing.
Pesticides are generally considered unnecessary in the cultivation of hemp, although researchers in Manitoba in 1995 reported that several pests had to be contended with. For the purpose of this paper, pesticide use will be considered to be nil to reflect the majority of findings and hemp’s organic farming potential. Another positive aspect of the crop is that once planted, no further husbandry is required until harvest, thereby minimizing labour costs and energy consumption.
Presently, one of the most significant costs of growing hemp for fibre relative to other crops is the cost of seed. To ensure that seed strains being used will meet the generally accepted THC level of <0.3%, certified varieties from Europe will have to be imported since North American hemp seed germplasms have completely disappeared as a result of hemp’s prohibition. Not only are the transportation prices very high (over half the cost of the seed), but certified seed demands a substantial premium because of current low world supply (perpetuated by the strict certification system) and continuously increasing demand, especially from Western European farmers. Based on recent experience, certified seed can be brought into Canada for approximately $2700/tonne. At a rate of 55-70 kg/ha, this translates to $61.80 to $78.75 per acre.
Although hemp generally requires no pesticides or herbicides, it does have significant nutrient demands. The figures of 120 kg/ha Nitrogen, 100 kg/ha phosphate, and 160 kg/ha potash are used for the purpose of cost calculation. These figures derived from Hemcore’s U.K. hemp growing experience are consistent with other research. Irrigation is required if precipitation is less than 200mm over the course of the growing period. Harvest period is critical, since after flowering, the quality of the bast fibres starts to decline.
The operations required for growing hemp for fibre are: seeding, cutting, baling, and bale handling. According to a number of researchers, hemp can be cultivated using existing farm equipment, however, for harvesting some alterations maybe required. The machinery operating, investment and depreciation costs used in these calculations are based on Ontario and Manitoba corn production costs, but reflect the need for more robust equipment and /or higher repair costs due to the toughness of the crop. Storage may also be necessary, depending on the specific end use of the crop.
Claims for hemp fibre yields vary radically. Reported dry matter yields range from 5-15 tons/ha, of which 12-40% can be bast fibre. The yields generated by hemp depend greatly on the strain of seed being grown, and farming practices and conditions. Seeds bred for area with a shorter growing season, for example, will tend to flower too early, and so will have a reduced dry mass yield. Hemcore has, for example, reported that the Hungarian varieties they have tested have had a 70% greater biomass yield than the French varieties. Furthermore, three years of trials resulted in average yields of approximately 10.5 dm(dry matter)t/ha, while their first year of commercial crops yielded only 5.0 dmt/ha. Having no seeds bred specifically for its growing conditions, the U.K., like Canada, depends on seeds developed for other climes, so initial commercial results are naturally relatively low.
The natural, or “unimproved” content of bast fibres in hemp stalks is only 12-15%. Through selective breeding programs, primarily in France, Ukraine, and Hungary, the current average is over 20% and many strains have been reported to yield over 30% bast fibre. Only in Hungary has any work been done on developing high yielding hybrids, and so as Dave West points out, “the genetic load of the crop is probably quite high, which would indicate opprtunity to significantly improve the crop’s productivity.”
Initial results from Canadian hemp researchers reveal dry mass yields lower than in other parts of the world. Australian farmers reported yields of 8-10t/ha, Ukrainian farmers 8-10t/ha, Dutch farmers 10-14t/ha, while in the U.K., in contrast, commercial yields of only 5-7t/ha were reported. Jack Moes, New Crops Agronomist for Manitoba Agriculture reported yields from their first year of test of 4500-7700 kg/ha for seven different varieties, while A.E.Slinkard of the University of Saskatchewan reported yields of 7100-9500 kg/ha. For the purposes of comparison, then a low and high estimate of dry matter and bast fibre yield will be calculated. A low , but realistic first crop yield of 6t/ha will be compared with realistic future yields of 10t/ha. Such yields would very likely be achievable on a commercial level after a few years of cultivation experience and seed breeding. Also, a low bast fibre yield of 22% will be contrasted with a high yield of 30%, for a range of 1.3-3.0 t/ha. This difference can be accounted for by seed variety and planting density.
Exhibits 3 and 4 detail the expected costs per acre of growing hemp, and compares it to the costs of growing canola and spring wheat in Saskatchewan, and canola and grain corn in Ontario. Machinery costs are estimated using equipment intensive corn cultivation and harvesting as a comparable, and the high demands hemp places on equipment have also been factored in. The final figures are in line with the experience of Canadian hemp farmers, but lower hemp farmers in some other countries. Australian farmers, for instance, estimated their costs to grow, harvest, manage and secure their hemp crops to be US$240/t. This figure however, includes irrigation and storage costs, and the crop was also picked up by hand after being cut by machine and left to ret in the field. Note that the most significant cost of hemp relative to the other crops is the cost of seed, over half of which is the cost of transport.
Below are the prices required at farmgate for break-even, depending on the yield of stalk realized. These prices are intended to cover ALL fixed and variable costs incurred by the farmer.
PRICE REQUIRED FOR FARM GATE BREAK-EVEN Yield (tonnes/acre) 2.5t/ac 3t/ac 3.5t/ac 4t/ac Seeding @ 55kg/ha 107.24 89.37 76.60 67.00 Seeding @ 70kg/ha 114.00 95.00 81.43 71.25
The cost of growing hemp for seed is reduced since the seeds are planted much less densely. At the generally accepted rate of 10-15 kg/ha, the cost of seed is $11.25-$16.88/acre. These savings, however, are largely offset by the need to use herbicides, since at this density the hemp crop will not effectively smother the competing weeds. As no research for the necessary requirements of herbicides is currently available, the cost of $15.00/acre for suppressing annual grass and broadleaf weeds is slightly more than the sample costs for growing canola in Ontario, but significantly less than that required for growing corn, since the crop will still have natural pest and weed suppressing abilities. The fertilizer and irrigation requirements for growing hemp for seed are comparable to growing hemp for fibre.
Harvesting requirements for seed differ somewhat from fibre. Although the primary revenue will be generated from the seed, the remaining stalks, though of lesser quality than those grown specifically for fibre, will also be of value and will have to be harvested. The additional operation (hence cost) required is combining, where the combine cuts the upper parts of the plants, and threshes and cleans the seeds. Subsequently the crop is mown and left to dry.
As with growing hemp for fibre, reported seed yields vary considerably. Seed yields, as well as the seed’s oil content depend on the seed variety and growing conditions. Average expected yields range from 0.7-1.2 t/ha, and oil content is generally between 30-35%. The yield of dry matter stalk when growing for seed will also vary, but is generally expected to be in the same range as hemp grown for fibre, if planted density is at least 15kg/ha. The fibre quality is significantly lower, however, since the plants are subject to less competition to grow vertically (resulting in fine slender stalks and fibre), and fibre quality also declines once the plants go to seed.
Break-even Price for Seed Only (Farmgate $/bushel): Yield (bushels/acre) 14.3bu/ac 19bu/ac 23.8bu/ac Seeding @15kg/ha 16.6 12.5 10.0
Note: Assuming 1 bushel of hemp seed = 21kg low yields of 300kg/acre, medium yields of 400kg/ha and high yields of 500kg/ha translates approximately into the expected 0.7-1.2t/ha seed yields.
This analysis is based on a range of prices for hemp seed derived from the average market prices for comparables (flaxseed and canola) from 1989-1993. Flaxseed hit a low of $5.00 in 1991, while canola reached $7.30 in 1993. Since hemp seed is such a rich source of protein (25%) and is rich in nutritionally exceptional oil, these prices represent the low range of realistic estimates. Furthermore, since there is generally some loss of stalk yield resulting from the seed harvesting, only low fibre yields of 2.5 and 3.0 tonnes/acre have been considered. For each seed price the resulting break-even price for the “leftover” stalk is given in $/tonne.
Break-even Price per Tonne of Stalk ($/t) Price/bushel Low/Low; 14.3bu/2.5t Low/Med; 14.3bu/3.0t Med./Low; 19bu/2.5t Med./Med.; 19bu/3.0t $5/bu 66.40 55.33 57.00 47.50 $6/bu 60.68 50.57 49.40 41.17 $7/bu 54.96 45.80 41.80 34.83 $8/bu 49.24 41.03 34.20 28.50
A potentially substantial and unknown variable in growing hemp commercially is the expected need for special licensing. The current procedure for obtaining a research permit is very elaborate and time consuming. Hopefully if commercial cultivation were legalized this procedure would be largely standardized and simplified. Also, there is an additional cost to the authorities of surveying and testing the crops. Furthermore, as long as the granting of these permits is at the discretion of the Minister of Health, there is no certainty that a farmer will be able to grow the crop. This is a risk not only to the farmer, but is also a substantial disincentive for industry who would rely not only on the economic viability of the crop, but also on its guaranteed availability.
Finally, assuming that the current maximum level of 0.3% THC will continue, there is an additional and significant risk of the crop testing above this legal level. If, for instance, the crop were to test at 0.5%, the authorities would retain the right to destroy the crop, and hence all revenues (and, theoretically, criminally charge the farmer in question). Certainly this risk will be at least partially alleviated by using only “certified” seed, but then will the seed provider be financially responsible for any variation? If so, the resulting need for additional insurance will likely result in even higher seed prices. Also worth noting is that to date, no research permits have been granted for the production of seed, although this is an area of significant strategic importance considering the high price, short supply and unadapted nature of imported varieties. Please note also that these break-even points are based on farmgate prices, so no transportation costs have yet to be factored in.
Market returns for hemp stalk, fibre, hurds or seed depend on a number of factors, including:
- crop quality
- suitability for intended end use
- amount of value-added processing that the crop has been subjected to
- available quantity of similar crops and substitutes
- proximity of producer to end user
The Canadian hemp industry is at a stage in its development where the actual income per tonne is difficult to determine, because full scale production has not been attempted. Economies of scale are expected to reduce costs significantly, but actual processing and capital investment figures can only be estimated, and are largely based on the experiences of other countries. The market prices expected for hemp are derived from current market prices for the next best alternative.
Although hemp has innumerable potential uses this study will focus on the more common, large scale commodity products for which hemp has promise as a potential alternative input. The most often quoted uses of the fibre which define the necessary processing technology are as follows:
Because of its high yield potential, hemp has been acclaimed as an ideal biomass fuel. It can be burned as is, or processed into charcoal, methane, methanol, ethanol, or gasoline. Typical methodology for the processing of hemp for fuel is destructive distillation or “pyrolysis”. Destructive distillation involves the subjection of hemp hurd to heat and distillation in the absence of air. Hemp charcoal as a biomass fuel can be burned in today’s coal-powered generators. Alternatively, Methane can be produced by the anaerobic decay of hemp. Also, ethanol is typically made from cellulosic biomass, and hemp is an excellent source of high quality cellulosic biomass.
Although no processing would be required for this application, high transport costs would necessitate regional processing or power generating plants. The economic potential of this application in the short term is questionable, however, since hemp would have to compete with other agricultural waste products. North American agriculture currently generates over 350 million tons of cellulose waste a year (straw, corn husks, etc.) much of which is burnt in the field but has energy generating capacities generally at least equal to hemp (see table below).
Plant Energy Output (kJ/kg) Corn 16510 Grains, Cereals 17610 Rape 20170 Wood 18660 Hemp 16450
Source: H. von Buttlar, “Hemp: Perspectives for use as a Boiler Fuel,” GHK Kassel/Universitat
Since these agricultural “waste” products currently generate no additional revenue for the farmers, any amount would be incremental income. To grow hemp specifically for this purpose, then, would neither take advantage of hemp’s unique fibre qualities, nor would it command any premium price over the likely nominal costs for such agricultural waste.
The possible building material applications for hemp range from an input for fibre board to insulation to hemp houses. Although the bast fibres, because of their high tensile strength, have significant potential as replacements for glass fibres for fiberglass or as a replacement for asbestos in fibre cement, such applications would require the bast fibre to be separated from the hurds. Joe Hickey of the Kentucky Hemp Growers Co-op has reported that a major fiberglass manufacturer calculated the market value of bast fibre to be $2000/ton.
Composites, which include paneling, medium-density fiberboard, trusses, and support beams, comprise the fastest-growing segment of the wood-products industry. In 1994, building materials accounted for 20 000 tons of assorted crops, in 1996, it is expected to account for 500 000 tons. Washington State Univ.’s preeminent Wood Composite Laboratory has tested hemp for use in medium-density fiberboard, and lab results show that hemp is up to twice as strong as wood. Certain other low-cost agricultural waste products are already being used in this process (straw, for instance), but hemp has a significant advantage because of its high tensile strength. Current prices for wood chips used in fiberboard production are approximately US$100/t, while straw is sold for as little as US$10/t for animal bedding.
Hemp hurds, traditionally considered a waste product are now being used fairly extensively in France for insulation materials and when combined with lime naturally petrify to create a pourable building material. This material is five times lighter, yet stronger than concrete, and has superior insulation and fire retardant properties. The most renown of these processes has been patented by a French company Isochanvre.
Although in 1994, non-wood fibre sources accounted for only 7-10% of total paper and board production worldwide, they have become the target of widespread interest as traditional wood sources are being depleted, and consumers demand tree-free alternatives. Hemp has additional environmental advantages, since compared to wood fewer chemicals are required to convert the low-lignin fibres to pulp (thus reducing waste water contamination), and hemp requires less, if any, bleaching. Hemp paper also has a much greater resistance to decomposition, is not subject to age related yellowing, and can be recycled much more often than wood.
In Australia there is ongoing research into the viability of pulping the whole stalk, although a study at the Agrotechnical research Institute in the Netherlands concluded that it is better to pulp bast and hurds separately. When processing the whole stalk, a mix of long and short fibres is obtained which has similar properties to (and so would compete price-wise with) good de-inked wastepaper stock, but it drains slowly, and its throughput on standard papermaking machines is two to three times slower than wood.
Australian Newspaper Mills technical manager Len Johnson reports that hemp for newsprint “just looks prohibitively expensive.” Nevertheless, Johnson said that in laboratory experiments “we have confirmed that mechanical pulping gives rise to a useful pulp using the whole stem of hemp.” At the commercial production and marketing level, however, Johnson said that hemp pulp “competes head on” with TMP softwoods. Johnson also said he was still “keeping an open mind” about pulping hemp for newsprint, hoping that the process can be achieved at a lower cost. Separated longer fibers cut to suitable length, he said, can be used to make stronger papers, even as a “reinforcement” for newsprint, where it could replace the 4% to 25% chemical pulp.
While the hurds can make excellent tissue paper and packaging materials, chemical pulping of the shorter core fiber is thwarted by the fact that “it just won’t drain on a paper machine.” Once separated, however, bast fibres are ideal for the higher priced but limited field of specialty papers such as filter, currency or cigarette paper. Bast fibre also has great potential as a reinforcing fibre for recycled paper and packaging. Andy Graves, president of the Kentucky Hemp Growers’ Co-op has, for example, already received an offer from a boxboard recycler who wanted to order 20,000 acres of hemp to add strength to reused cardboard.
As with its application for building materials, hemp faces stiff competition from other non-wood fibres. Long-bast-fiber pulp, for example, may obtain a premium price of up to 20% above top-quality long-fiber pine pulps, but will face strong competition from such fibers as cotton, sisal, flax and abaca. Other non-wood fibres currently being researched for use in pulp and paper are: kenaf, wheat and rice straw, and cereal grasses. In particular, cereal grasses contribute a readily available surplus material from grain cultivation, are cheaper than trees and require less energy to pulp that wood. Another example is seedflax, a fibre very comparable to hemp, and available in Canada in huge quantities virtually for free, since it is a by-product of linseed oil production.
Al Wong, president of the Vancouver-based Arbokem Inc., has compared straw’s low price and low pulp yield with wood’s higher price and higher pulp yield, and has determined that straw comes in at $58 per ton, while wood costs $105 per ton. North America annually produces approximately 200 million tons of fibrous crop waste, from which 100 to 120 million tons of papermaking pulp could be produced. North American wood pulp production for 1993 was estimated by the Canadian Pulp & Paper Association to be only 88 million tons.
Hemp for textiles is perhaps the greatest value added use for hemp, but it is also the most involved. Seeding and harvesting is critical to ensure only the highest quality fibre, while processing is a multi-step, capital and usually labour intensive process. After harvesting, the primary bast fibres are separated from the hurds, after which they are “hackled” to remove any remaining woody particles and to align the fibres into a continuous “sliver” for either wet or dry spinning into yarn. Secondary bast fibres (or “tow”), the by-products of fibre separation and hackling can be carded and then spun into a lower quality yarn or twine. Alternate fiber separation processes such as steam explosion, ultrasound or pulping can be used to obtain various short fibre qualities (see below).
Although flax machinery can be adapted to produce hemp textiles at a similar cost, more robust machinery would be better suited, especially for fibre extraction. The proportion of bast fibre in hemp plants is typically in the 22-30% range, but during processing, a loss of fibre in inevitable. In U.K. trials, one tonne of hemp was calculated to yield 15% or 150kg of line or high quality fibre. Further losses of 35% in hackling and carding, 5% in yarn production and a further 20% in boiling and bleaching the yarn to accept dye, results in an net yield of 73kg, producing 182 square meters of 400gsm (jeans weight) fabric. In addition 100 kg (10%) of shorter or tow fibres would be generated, and 500kg of hemp hurds. The long term price for hemp textiles has been estimated at US$7-10/kg – above cotton, but below linen (flax), since flax has the advantage of having a higher spinning limit, enabling a finer end product. The potential market is difficult to estimate, except to say that, depending on price, it would be between cotton’s 50% of total fibre consumption and flax’s 3%.
When growing hemp for seed a much lower seeding rate (usually only 10-15kg/ha) is used. A number of high yield, monoecious strains have been developed specifically for seed production. These varieties typically yield 0.7-1.2 t/ha, of which 30-35% is oil. This is somewhat lower than the average oil extraction rate for canola of 42-43%, from average yields in Canada of 1.27 tonnes per hectare, but hemp oil has the advantage of having unique nutraceutical properties, and a potentially valuable protein meal and (lower quality) fibre crop by-products. A closer competitor would be flax (linseed) oil, which has very similar uses and an oil content basically identical to hemp. Since plant densities between 80-400 plants per square meter have been shown to have little effect on dry stem matter, seeding at a rate of 15 kg/ha (approximately 80 plants per square meter) should result in both maximum fibre and seed yields.
Given the prohibitive price of importing certified seed into Canada from Europe, another important element to seed production will be the production of viable seed for Canadian farmers. As seed varieties are bred specifically for local conditions and uses, yields of fibre and seed are bound to increase, the cost of seed will decrease dramatically, and thus hemp cultivation will be much more competitive. Finally, a somewhat unusual but serious impediment to growing hemp for seed is that hemp seeds are a favorite meal of birds.
In general, the technology which has traditionally been used to process hemp (and is still being used in China and Eastern Europe) is not ideal for modern agriculture because of the high labour demand and therefore high costs of these methods. Although hemp has not had the benefit of continued cultivation and processing in the West, technology has been developed for similar crops, in particular kenaf and flax, which can be adapted to hemp. Also, in the past few years, a number of European companies have developed innovative new approaches to processing hemp fibres.
The degree and type of processing required is determined by the destination of the crop. End users, including paper manufacturers, building product suppliers and textile mills each require a supply of hemp in different forms, ranging from raw stalks to fibers-only or hurds-only. By transporting unprocessed hemp, shipping costs rise because the “waste” portion of the stalk is shipped with the portion that the purchaser requires as inputs for production. Harvesting for chopped stalk essentially eliminates processing costs, but does not capture revenue for the raw fibre. At advanced stages of raw crop processing, hemp is more marketable and less costly to transport than is unprocessed hemp.
As the requirements to the fibre increases, so does the necessary processing, and this technology also becomes more complicated and costly. To determine the economic viability of hemp, I will therefore focus on three approaches to producing hemp commercially:
Separation of Bast Fibres from Hurds
bast fibres to be used for specialty paper and textiles
hurds to be used for building materials and animal bedding
Whole Stalk – for fiberboard
Seed Pressing – for oil, protein meal and building materials
This is undoubtedly the highest value-added approach to hemp, but it is also the most involved and costly, and the most difficult to estimate. Under optimal conditions, the raw fibre and hurds would be sold separately, generating the most significant returns per hectare. Traditionally fibre separation was a lengthy process of water or dew retting (rotting) the crop after harvest either in water tanks, rivers or ponds, or on the field, followed by breaking the stems, scutching and finally hackling to ensure clean fibre. This basic process has recently been used in France and in trials in England, where processing was found to be “the most difficult part of the whole venture and a key feature in any future expansion.” The UK trials attempted to use as high a degree of mechanization as possible, and so after field retting and baling, the crop was delivered to an existing flax processing factory for decortication (fibre separation).
Although flax processing equipment has proven adequate for hemp, equipment designed specifically for hemp processing would be much more efficient and thus profitable over time. There has been talk of the possibility of mobile processing units to minimize transportation costs, but in the experience of UK’s Hemcore, the amount of equipment needed would make this approach unrealistic. Regional primary processing units, however, may be a more realistic approach to reducing these transportation costs. Since the Canadian climate is ill-suited to field retting, and as there is no existing long fibre processing infrastructure in Canada, a traditional processing strategy is at best a longer term opportunity which is certain to require significant capital investment, and further study.
A cost efficient and effective approach to fibre separation has been developed in the Netherlands by E. de Meyer and W. Huisman. Their process requires ensiling of the stalk for a minimum of 6 months after field chopping. After the ensiling period, the very clean bast is easily separated from the hurds by floatation – the bast sinks, and the hurds float. This process is estimated to cost only about C$5/tonne, versus mechanical decortication which has a much higher rate of cross-contamination between the bast and hurds, and can cost up to C$100/tonne. The disadvantage of this system, however, is that the ensilage period causes a substantial reduction in the strength of the bast fibres, thereby significantly reducing their value for most industrial applications. If a method can be discovered to better preserve the bast fibre strength this would be an excellent fibre separation alternative.
A number of innovative approaches for smaller scale hemp processing have recently been developed on the lab scale, including using steam explosion, detergents and ultrasound, but for the most part these all still lack demonstration at the pilot or production scale. Some of these technologies produce short fibre or “cottonized” hemp which has the advantage that it can be spun on slightly modified cotton or wool processing equipment.
The first commercial project using such technology is being undertaken this year in the former East Germany. Three Flaksy (bast fibre decorticating and preparing) units recently developed in Germany by the Bahmer Company are going into operation in June, each having an hourly processing capacity of two tonnes of flax and/or hemp fibre. Two of the lines are intended to process flax into a fine short fibre for the textile industry, but will likely also process hemp. The third unit is combined with a detergent processing step which produces a very fine, cotton-like flax fibre (FLASIN).
Although such new processes are very promising, this technology is still in its infancy, has limited availability and is expensive to install and operate. The price of a Flaksy line amounts to US$2 707 500 “delivered ex works, Germany” and may be even higher depending on the quality of the breaker / decorticator unit, the number of separation steps and the sophistication of the dust collection system. In addition, operating costs per shift for any of these lines are likely to be US$195 000 – $325 000. It will be some time, therefore, before such technology will be economically and technologically feasible to implement in Canada.
The high cost of purchasing this machinery from overseas vendors has led to an increased interest in the development of domestically produced equipment. One example is Geof Kime of Hempline, Inc., growers of the first Canadian hemp crop since prohibition. Kime’s expertise in the field of equipment design and Hempline’s early entry into the business has given Hempline Inc. a distinct first mover advantage. Nonetheless, for the time being it seems that it will be cheaper to import finished textiles from such low-cost hemp producing countries as China and Hungary.
When growing for the whole stalk of the hemp plant, very little processing is required. The crop can be mowed and then baled with conventional combines. The only further processing required is drying (which can be done in the field after mowing) and chopping which can be easily done with existing equipment. If the highly valued bast fibre is not to be separated from the hurds, however, it makes more economic sense to grow hemp for stalk and seed, and harvesting the stalk after the seed (see below).
The principal challenge in pressing hemp seed for oil is that hemp seed oil is so highly unsaturated that rancidity begins as soon as the oil is exposed to heat, light or air. In 1986, advanced seed oil companies began using technology that could extract oil in the absence of all three. This proprietary technology uses inert gasses and vacuums to cold press the seeds without contaminating the oil with oxygen, and so avoids starting the chain reactions that create rancidity. Using this technology reactive oils like hemp can be pressed into a product which can be kept in a bottle for up to a year without going rancid. 
Hemp oil is currently very expensive (about three times the price of flax oil), but again this is almost exclusively due to the high cost of importing seed. Since they have almost identical yields, and oil contents, and flax is also very highly unsaturated they should compete head to head price wise. Hemp, however, has the advantage of being flavorful, while flax oil is generally considered unpalatable, and is almost always sold for consumption in capsule form.
Since the pressing technology best suited for hemp seed is presently being used for other highly volatile oils, in particular therapeutic oils, hemp would at least initially compete in this high value specialty oil niche. Its main competitors would be oils such as: evening primrose oil, borage oil, black currant seed oil and flax oil, all which are also typically taken in capsule form. Hemp seed oil would likely not compete against cooking oils, since the extreme heat of frying changes its molecular structure and may diminish its nutritional value.
Hemp oil can also be used for commercial purposes, in particular as a lubricant or in the production of varnishes and oil paints. For centuries hemp oil was the principal oil used for oil paints as it is a particularly good vehicle for ground pigments, and is very quick drying. In these uses hemp seed oil’s proneness to rancidity is not a significant factor, since it can be easily stabilized and preserved with the addition of vitamin-E. In these applications, again its most serious competitor is the less ideal flax oil, which many manufacturers of paint supposedly were forced to switch to after hemp’s prohibition.
After harvesting hemp for seed, a substantial stalk crop remains. As has been previously discussed, the lower fibre quality would not make this crop suitable for fibre separation even if the processing technology were available. The whole stalks are a valuable input for fibre board and other composite building materials, however. Since harvesting and baling the whole stalks does not present any significant difficulties, the only potentially limiting factor is the potentially high transportation costs were the crops to be grown far from the board manufacturer.
According to UK trials, Sue Riddlestone reports that when processed on a commercial scale, one tonne of raw hemp stalk would conservatively produce 182 square meters of 400gsm fabric (73kg). At current wholesale market prices of approximately C$10 per square meter, this would translate into C$1820/t. Given the longer term estimates of C$10-14/kg, however, expected revenue generated from the bast fibre of one tonne of hemp would be C$730-1022. Since 2.5-4 tonnes of hemp can be grown per acre, the total primary bast revenue per acre would be C$1825-4088. These prices, however, must cover the very substantial processing required to achieve a fine hemp textile.
As an alternative input for fibre glass, one tonne of stalk should yield a minimum of 150-200kg of suitable primary bast fibre. At the reported market price of C$2800/t, this would generate C$420-560 per tonne of stalk, or C$1050-2240/acre.
As an alternative to imported jute, Canada Cordage of Kitchener, Ontario has offered $800/tonne for raw bast fibre for processing into yarn, rope and electrical cable filler. Although a superior fibre, at this price, bast fibre from an acre of hemp would generate $300-640/acre.
As an input for high quality, specialty paper, it has been estimated that hemp in the long term could command a 20% premium over top quality long fibre pine pulps.  Presently, however, because of its limited supply, the market price for hemp pulp is in the US$2100/t range, versus around US$600/t for a standard grade of softwood pulp. This premium is deceptive since the price of the input is typically a small proportion (approximately 16.5%)of the final cost of the pulp. In late 1995, for instance, standard softwood pulp prices hit an all time high of US$1000/t. At the same time, standard softwood wood chip prices were also at their height at US$165/t. At current hemp pulp prices, then, hemp bast only commands C$485/tonne.
The most likely use for the principal by-product of processing, the hurds, would be as a building product raw material, or as animal bedding, specifically for horses which because of its superior absorbency and rapid composting in Europe fetches US$130-250/tonne. In either case, the main competitor is wood shavings, and more recently other non-wood crops such as straw or flax shives. These materials are typically in the C$55-$70/t. Even at a very low final yield of 1500-2400 kg/acre (60% hurd yield), these very low prices would generate an additional C$83-$168/acre. At the premium generated by hemp hurds elsewhere, this additional revenue would be C$285-684.
The uses and thus price for whole hemp stalk is likely to be similar to hemp hurds, although the inclusion of the strong bast fibres may in the future command a premium price as an input for composite building materials. Assuming that when being grown for whole stalk, the hemp is also being grown for seed, for yields of 2.5-3t/ac, the projected revenue from whole stalk would be C$137.5-$210.
Until hemp can be grown for seed in Canada (or the U.S.), hemp seed and hence oil prices in North America are very inflated due to the cost of transport. Currently, hemp oil sells wholesale for US$135/gallon or approximately US$38.50/kg (C$54/kg). Thus, at an extraction rate of 35% and seed yields of 0.3-0.5t/ac, at current prices an acre of seed pressed for oil will gross C$5670-$9450! Of course, once grown domestically seed and oil prices would fall, probably to a level similar to flax and canola. Since hemp oil is presently about three times the price of flax oil, this translates into a more realistic equilibrium price of C$1890-3150. Again, these prices reflect wholesale prices, and therefore include transportation of the seed to the pressing facility, pressing and packaging costs, distribution costs, margins, etc. 
In the event of the legalization of commercial hemp production, the likely farmgate price for raw hemp seed has been estimated at C$7.50-$9.25/bu. This price is comparable with, though on the higher end of prices for other similar seed crops. At this price, an acre of hemp grown for seed would generate $107.25-$220.15/acre.
Given these expected revenues and projected yields, I estimate that growing for seed and fibre will generate combined revenues of $244.75-$430.15/acre. Since the total expected costs of growing hemp for seed are $237.50/acre, even in a “worse case” scenario, a minimum return of $7.25 is expected. As illustrated in the table below, this is slightly better than the expected return from spring wheat, when using average prices from 1989-1993. The median expected hemp yields and prices generate expected returns which are more than double the next best crop, Ontario canola, and the highest estimates (which should still be considered conservative) are really quite exceptional compared to the other crops. It is worth noting again that this high potential profitability is the result of hemp being two crops in one. If hemp were grown only for seed OR whole stalk, it would likely generate negative returns even in best case scenarios.
|Canola (Ontario)||Grain Corn||Spring Wheat||Low P/Y Hemp||Average Hemp||High P/Y Hemp|
|Ave. Yield (bu/ac)||33||109||41||14.3bu/ac; +2.5t/ac||19bu/ac; +2.75t/ac||23.8bu/ac; +3t/ac|
|Ave. Price ($/bu)||6.30||2.86||3.59||$7.50/bu; $55.00/t||$8.38/bu; $62.50/t||$9.25/bu; $70.00/t|
The further advantage of growing hemp for seed and whole stalk is that very little is required in terms of capital investment for new harvesting or processing technology and facilities. The crop can be planted and harvested with existing machinery, requiring at most only slight adaptations, and existing processing facilities can transform the crop into valuable oil and composite building products, both of which have certain qualities which are superior to products currently being produced out of more traditional raw materials.
Because of the labour intensive nature of traditional fibre separation, in order to competitively grow hemp for its valuable bast fibre requires processing technology which is not yet proven at a commercial level. In the future, the viability of this process will have to be determined by weighing the probably significant capital investment required to establish this industry, and the processing costs against the expected incremental revenues this value adding procedure will generate. A primary stage of processing resulting in clean, separated bast fibres will service industry requiring these fibres in their raw form (for specialty paper or fiberglass, for example). If the high revenues that, in particular, fiberglass would seem to generate were to be realized, it seems there will be more than ample incentive to further pursue this alternative.
Creating a Canadian hemp textile industry require an additional, secondary level of processing. After the bast fibre is separated from the hurds, it must be combed, then processed into a sliver (an assemblage of fibres in a continuous form), then into a rove (a finer sliver) before being ready for spinning and finally weaving. Since Canada presently does not produce ANY agricultural crops for fibre, we do not have even the basic infrastructure available. The potential revenues are substantial, however, and if any of the new “cottonizing” technologies prove themselves on a commercial level, this may yet be a viable opportunity. The other possibility, especially more in the short term may be to export raw bast fibre to the U.S. for processing into textiles, since the U.S. already has established cotton and more importantly flax processing infrastructure in place.
Since hemp would seem to be financially very without having to make any of these significant capital investments, it seems that if hemp production were legalized it would be able to more than adequately support itself, and further research into the best approaches to value adding processing could then be undertaken using Canadian grown hemp. Furthermore, if Canada were to legalize hemp in the near future, Canadians would also have an important first mover advantage in relation to the U.S.. Since the U.S. is a huge potential market which cannot satisfy its own pent-up demands for hemp, a high demand and thus price level for Canadian grown hemp would be assured
Legalize commercial hemp production, the sooner the better to capitalize on first mover advantage
Granting of permits should be under the ministry of agriculture, and the process simplified to reduce the risk of not being able to guarantee supply (the most substantial risk for potential industrial end users)
Canadian grown seeds are essential to ensure hemp’s competitiveness:
to reduce seed cost
to reduce exposure to unstable international supply of certified seed
to produce seeds which are specifically adapted to Canadian (even local) growing conditions
to produce seeds which maximize yield of desired qualities (i.e. stalk yield or bast or oil content)
since it will take a number of years to properly establish a well adapted and diverse Canadian hemp seed germplasm, work on this should commence as soon as possible (despite research licenses having been given out the past two years, all crops were required to be harvested prior to going to seed)
Canadian seed must also be “certified low-THC” to ensure that farmers will not be at risk of losing their entire crop because of being even slightly above the allowable THC limit.
Don Wirtshafter, “Why Hemp Seeds?” Hemp Today, p.173.
Gordon Reichert, “Agriculture and Agri-Food Canada”s Bi-Weekly Bulletin,” Vol.7, No.23., 1995.
Gertjan van Roekel, jr. “Hemp Pulp and Paper Production” Journal of the International Hemp Association 1:12-14.
Gero Leson, Toronto Industrial Hemp Conference, 1996.
Ian Low, “UK Hemp Production”, Hemcore Ltd., 1995.
David West, “Industrial Hemp Farming” and “Hemp Agronomy”
Ian Low, 1995.
Jack Moes, “1995 Manitoba Hemp Trials” : Lygus plant bugs and Bertha armyworms attacked the leaves and deer like to nip off the tender growing points but leave the tough fibrous parts alone.
Gordon Reichert, 1995.
James Davis “Report on Australian Hemp Trials from James Davis to Joe Hickey,” Jan. 15, 1996; Ian Low, 1995; “Hempline Inc.,” Western Business School, 1995; Jack Moes, 1995; Dr. R. Kozlowski “Breeding, Cultivation and Applications of Hemp in Poland,” 1995.
Jack Moes, p.19; also: Hempline Inc., Joe Strobel of Hempline, Inc. estimated their first year operating costs to be very comparable to corn (costs included cultivating and harvesting expenses for chopped whole stalk using modified hay harvesting machinery).
P. Goloborodíko and John Masura, “Hemp Research and Growing in the Ukraine,” Institute of Bast Crops, Glukhov, Ukraine, 1995; Dave West, “Hemp: The Technical Obstacles”
Dave West, “Hempís Technical Obstacles, Breeding”, p.2.
James Davis, 1996; Note also that their stated millgate price was over twice that determined by Dutch farmers.
Crop Budgets, Ontario Ministry of Agriculture, Food and Rural Affairs, 1995.
Dr. W. Huisman, “Harvesting and Storage of Hemp,” Agricultural University of Wageningen, 1995: French method of seed harvesting.
P. Goloborodíko and John Masura, 1995; 1913 U.S. Dept. of Agriculture Yearbook reported average yields of 16-18bu/ac; Dave West, in a personal correspondence, reports that :in Hungary, Bocsa has developed the “unisexual” [monoecious] type, hybrid and all female, [which produces] 1600kg/ha,” @ 21kg/bu.
Joe Hickey, Kentucky Hemp Growers Co-op, 1995.
P. Goloborodíko and John Masura, 1995.
“Crop Budgets,” Ontario Ministry of Agriculture, Food and Rural Affairs, 1995, p.14.
Popular Mechanics, “The Billion Dollar Crop” 1938; Gero Leson, nova Institute: Depending on the source, estimates range as high as 25 000-50 000 possible uses.
Wayne Roberts, “Fill ëer Up…With Straw” Now, April 11, 1996, p.18.
Wayne Roberts, p.18
John Roulac, ed., Industrial Hemp, pp.24-5.
Jim Rosenburg, Editor & Publisher Magazine, January 20, 1996
Manfred Judt, “Hemp: Papermakers should take it with a pinch of salt” Pulp and Paper International, Oct., 1994.
Sue Riddlestone, “Back to the Future for a Profitable New Industry: Non-wood papermaking” Pulp and Paper International, Nov., 1994.
Jim Rosenburg, Jan. 20,1996.
Wayne Roberts, p.18.
Manfred Judt, Pulp and Paper International, Oct. 1994.
Ir. Gertjan van Roekel, “The 1994 TAPPI Pulping Conference”
Jim Rosenburg, Jan. 20,1996
Sue Riddlestone, “Hemp Textiles in Britain – Opportunities for Bioregional Development”, 1995.
P. Goloborodíko, 1995.
AGRA Europe, May 12, 1995.
Udo Erasmus, Oils that Heal, Fats that Kill, Alive Books, 1993.
H. van der Werfe, et al. “Agronomic Research on Hemp in the Netherlands,” 1995, p.4.
Ian Low, 1995, p.3.
E. de Maeyer and W. Huisman, “New Technology to Harvest and Store Fibre Hemp for Paper Pulp,” IHA Journal, Vol.1, 1995, pp.38-41.
Michael Karus and Gero Leson, “Update: Industrial Hemp in Germany”, May, 1996
W. Fritz Mezger, personal correspondance, May 7, 1996
Michael Karus and Gero Leson, “Update: Industrial Hemp in Germany”, May, 1996
Don Wirtshafter, p.176.
Sue Riddlestone, “Hemp Textiles in Britain,” Bioregional Group, March 1996.
Joe Hickey, 1995.
Manfred Judt, Pulp and Paper International, Oct. 1994.
Gertjan van Roekel jr. “Hemp Pulp and Paper Production,” IHA Journal Vol.1, 1994, p.14.
Bloomburg Business News, March 1996. Note: for conversion purposes US$1=C$1.40.
The Ohio Hempery, Wholesale Catalogue, 1995.
The high protein seed casing are also of value, as they can be ground into a high protein flour or used for animal feed. On a per acre basis, however, their value is negligible ($0.05-$0.10/LB), and is therefore not included in the calculations.
Gordon Reichert, Market Analysis Division, Agriculture and Agri-Food Canada, personal correspondance, March 1996; In Europe organically grown hemp seed fetches US$1.30-$2.60/kg, Gero Leson “Update: Industrial Hemp in Germany” May 1996.
The exception to this would be if hemp were grown only for stalk, at very high yields and high prices it would still generate positive returns (e.g. at 4.0 t/ac x $70/t, expected returns of $42.50/ac).
Prof. Dave Shaw
Prof. Al Mikalachki
Masters of Business Administration
Ivey Business School
University of Western Ontario