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THE CONCEPT

The Hemp Agro-Industrial Zone (HAIZ) is an optimization concept that grew out of GHG’s efforts to carve a niche of its own in the spectrum of hemp industries. It seeks to build cooperative mechanisms between capital, farmers and labor, and across industrial sectors, focused on different parts of the hemp plant, to produce greater social and environmental benefits with substantial financial reward to capital.

SOCIO-ECONOMIC BENEFITS OF HAIZ

Benefits of the HAIZ are measured in the payments to farmers for products delivered to the processing plants, the number of jobs created and the salaries paid. The way GHG views the relationships with its key suppliers, the farmers and with the workers, is an additional benefit of significance as it shifts the mode of operation from a competitive to collaborative.

ENVIRONMENTAL BENEFITS OF THE HAIZ

GHG is fully committed to a carbon free economy and the HAIZ concept is an embodiment of this commitment. First at the farm level it promotes a farming system that minimizes carbon-based inputs through soil enhancing rotations to minimize fertilizer inputs

The more important environmental benefits of the HAIZ will be found in the range of its products, principally those made from the straw: hempcrete bricks, clean fibres for the textile industry, interior panels for the auto industry.

The following table, comparing individual strategies, illustrates the point.

By far the most profitable strategy would be to farm high CBD hemp varieties for flowers and leaves only, under controlled conditions, specifically for the extraction of CBD. This would yield very high ROI with little job creation and no positive impact on the environment. The current prevailing strategy of farming for grain has a lower return on investment and slightly better impact on job creation and no impact on the environment. A “Straw only” strategy has a lower return on investment, but very significant impact on job creation and the environment. A hybrid strategy scores as well on the socio-economic and environmental fronts as the Straw only strategy, but at a somewhat lower rate of return on investment than the flowers and leaves strategy.

FARMING FOR THE HAIZ:
Variations on the theme of contract farming are currently in use in hemp agriculture. Farmers sell their crop to a processor at agreed price, quantity, and quality. Currently, only seed is marketed. In case of over production, contracts are not renewed and farmers must reallocate their resources to other crops.

Under the HAIZ farming model, contracts are also negotiated, but for all parts of the plant; seed, straw, flowers & leaves and the respective prices depend on the markets for the various products. The farmers stake in the overall HAIZ reinforces their commitment to these contracts. Farmer revenue is consequently more stable.

 

 

INDUSTRIAL PROCESSING IN THE HAIZ:
Processing takes place at two levels in the HAIZ: primary processing, which is a simple extraction of the various raw materials available from the hemp plant, and secondary processing where considerable value is added through the manufacture of consumer goods.

Primary processing includes decortication for hemp straw, CBD extraction from flowers and leaves, pressing hemp grain to extract oil and cake. Such processing calls mostly for off-the-shelf technologies, designed to the scale of the operation. Leaders in this industry are TEMAFA in Germany, and CRETES in Belgium, both offering integrated systems capable of processing from 1 to 10 tons of straw per hour, into bales of hurd and fiber and big bags of pelleted dust. Significant economies of scale can be achieved in such systems, thus favoring the larger units.

DunAgro has designed a smaller system (2 tons/hour) integrating all aspects including harvesting using CRETES equipment. The renewed interest in hemp cultivation is prompting the development of alternative system of lesser scale. The D8 decorticator designed by Textile Composite Industries is a case in point. This is a smaller and less costly system that can even be made portable. Creative Biofiber Technologies is also developing a smaller unit that could eventually bring straw processing to the farm and contribute to a decentralization of the industry. These activities are performed under the direct control of GHG, who then provides feedstock (oil, cake, raw fiber, hurd, CBD) to secondary processing plants of the HAIZ at contractual prices.

Secondary processing uses the output from primary processes as feed for manufacturing of intermediate or final added value products. Under the HAIZ model, partnership agreements are negotiated with owners of proprietary technologies capable of adding significant value to the raw materials for the goods they produce for the market.

Cottonization of hemp fibers is one such example. Fibers separated from the hemp straw are found in bundles of tiny fibers bound together by sticky non-cellulosic materials. These bundles are broken down into tiny fibers, roughly of similar size and length as cotton fibers, through various chemical and enzymatic processes called cottonization. The spinning qualities of these fibers depend on the nature of the cottonization process, the hemp varieties and the decortication techniques, thus GHG’s interest in an integrated process. Cottonized fibers can then be spun on traditional cotton spinning equipment while retaining the highly valued properties of the hemp fiber (light weight, quicker moisture transfer, lower carbon footprint, antimicrobial/antibacterial, along with greater ultraviolet resistance).

Another example of downstream processing of hemp straw is found in hemp hurd. The hurd has been used for a number of years in combination with lime in the construction industry to produce low carbon buildings. Rachel Bevan and Tom Woolley, authors of Hemp Lime Construction: A Guide to Building with Hemp Lime Composites, are leaders in this field and have produced an excellent reference manual on this construction technique. Because of its poor resistance to compression, the hemp-lime mixture is cast in forms around a structural element as can be seen below.

Such buildings have a remarkable performance in terms of CO2 sequestration, thermal and hygrometric properties, protection against fire and pests. Unfortunately, this type of construction comes at a slight premium to the cost of building with traditional materials that are more harmful to the environment.

However, new construction methods were developed in the past years to overcome this cost disadvantage. Hemp bricks were developed by JustBioFiber and TTS, both from Alberta, Canada. The first one in particular, makes significant productivity gains in construction. These building techniques require more elaborate manufacturing processes to transform hemp hurd into hemp bricks/blocks. The end product is a building with all the advantages of the hemp-lime contraction but at a lower cost. CMF Greentech from Italy has also developed structural panels for home construction which also promises to match high environmental qualities with improved building productivity. Discussions are underway with several of these manufacturers to incorporate their technologies in the HAIZ.

Cannabidiol (CBD) is an important aspect and currently the most profitable segment of the HAIZ. CBD is derived from an extraction process utilizing the flowers and leaves. While the present wholesale value of CBD is fluctuating as the market matures, creating CBD based value-added products will significantly increase profit margins several fold. Examples of value-added products for both human and animal consumption include; raw paste, refined full spectrum oils, isolates and infused products.

RESEARCH AND DEVELOPMENT IN THE HAIZ
R&D consists of four research thrusts: agricultural research, improving industrial processes, developing new hemp products, and monitoring health & environmental impact of hemp products.

AGRICULTURAL RESEARCH

Agricultural research will focus on developing new cultivars best adapted to the new products and to the industrial processes that will produce them. Particular attention will be paid to breed varieties that will be easier to decorticate, provide high quality fiber, while improving the CBD content of flowers & leaves.

In addition to breeding, research will be conducted on improved farming practices, to minimize inputs and maintain soil structure and fertility. Issues such as crop rotation, minimum tillage, and cover crops will be investigated. Farming practices also influence the overall output of the HAIZ. For instance, seeding density impacts negatively on yields of seed, flowers and leaves, but positively on straw production. Similarly, optimal harvest time for straw and seed do not coincide. Research will seek best practices in the interest of the whole group.

INDUSTRIAL PROCESS

Processes used in the transformation of hemp primary products, still require improvement. For instance, effective decortication is still the domain of large capital intensive plants. The long-term interest of the industry may well reside in smaller units, operating at a farm level, or at least at community level, close to markets for the final products. Such units are currently in development elsewhere. GHG will seek to attract and support this kind of research at its facilities.

DEVELOPING NEW PRODUCTS

The wide variety of products that can be manufactured from hemp is well known. However, many other products are either little known or produced at non-competitive prices. A good example of this is cotton, which is currently heavily subsidized indirectly, since its production cost, and therefore its price, does not reflect the considerable environmental damage it causes. Hemp fibres on the other hand, cause no such damage, but still can be produced at a competitive price, largely determined by cotton and carbon-based synthetic fibres.

Bio-degradable plastics made from hemp fibres are comparable to oil based plastics. Until such environmental costs are factored into the production of these goods, manufacturing of hemp-based substitutes must strive for improved processes, to produce under less than favorable market conditions.

MONITORING HEALTH AND ENVIRONMENTAL EFFECTS OF HEMP PRODUCTS

Many claims are made regarding the benefits of hemp products, but not all have been properly validated scientifically. For instance, the hemp brick has been tested extensively, to meet the standards of the building industry. Use of this building technique and materials will be monitored under real conditions, through samples of customers over extended periods of time.

Such monitoring will be particularly important for health claims regarding food and nutraceutical products. GHG will seek partners with solid research experience to lead this research program, in collaboration with university food science departments, to monitor the health benefits of those products.

Contact

PHONE : 424.354.2998
EMAIL : info@globalhempgroup.com

Address

#106 – 1169 Mt. Seymour Road, North Vancouver BC V7H 2Y4

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