Posted on

The High Cost of Hemp’s Vertical Integration: A Deep Dive

Vertical integration, the practice of controlling every stage of production, from raw materials to finished goods, is a seductive proposition for hemp businesses. By owning the entire supply chain, companies aim for increased efficiency, cost savings, and higher profit margins. However, the reality of vertical integration in the hemp industry often presents a formidable financial hurdle.  

The Cost Breakdown:

  • Farm-to-Table (Food):
    • Cultivation:
      • Land Acquisition/Lease: Significant upfront investment, especially for prime agricultural land.
      • Infrastructure: Building greenhouses, irrigation systems, and storage facilities.
      • Labor: Hiring skilled agricultural workers for planting, harvesting, and pest control.
      • Equipment: Tractors, harvesters, and specialized equipment for hemp cultivation.  
      • Seed Sourcing: Ensuring high-quality, consistent seed supply.
    • Processing:
      • Extraction: Investing in sophisticated extraction equipment (e.g., CO2 extraction) and skilled operators.  
      • Refining: Refining hemp oil into food-grade products like hemp seed oil, protein powder, and hemp hearts.
      • Packaging & Distribution: Investing in packaging lines, transportation, and a robust distribution network.
    • Research & Development: Continuous investment in research to improve cultivation techniques, extraction methods, and product development.
  • Farm-to-Floor (Industrial Hemp):
    • Cultivation: Similar costs to food production, with a focus on fiber and grain varieties.
    • Processing:
      • Fiber Processing: Investment in decortication, scutching, and spinning machinery to convert hemp stalks into fibers.
      • Grain Processing: Investing in equipment for cleaning, milling, and processing hemp seeds for animal feed and other uses.
      • Wood Processing: If utilizing hempwood, investing in sawmills, kilns, and wood processing equipment.
    • Manufacturing:
      • Textile Production: Investing in looms, knitting machines, and dyeing equipment for fabric production.
      • Construction Materials: Investing in equipment for producing hempcrete, hemp-based composites, and other building materials.

Beyond Capital Expenditures:

  • Regulatory Compliance: Navigating a complex regulatory landscape with varying state and federal laws adds significant costs.
  • Quality Control: Maintaining consistent quality throughout the entire supply chain requires rigorous testing and quality control measures.
  • Inventory Management: Managing inventory across multiple stages of production can be challenging and costly.
  • Risk Mitigation: Insuring against crop failures, market fluctuations, and other potential risks is crucial.

The Potential Rewards:

Despite the significant costs, vertical integration offers potential rewards:

  • Improved Profit Margins: Eliminating intermediaries can increase profitability.
  • Enhanced Quality Control: Greater control over the entire process allows for stricter quality standards.  
  • Brand Differentiation: Offering unique, vertically integrated products can create a strong brand identity.
  • Increased Market Share: Controlling the supply chain can provide a competitive advantage.

Conclusion:

Vertical integration in the hemp industry presents both significant challenges and potential rewards. Careful planning, robust financial modeling, and a deep understanding of the market are essential for success. While the initial investment may be substantial, the long-term benefits of controlling the entire supply chain can be significant for businesses that can navigate the complexities and capitalize on the growing demand for hemp products.

Disclaimer: This article provides general information and should not be considered financial advice.

Note: This article provides a general overview. The actual costs of vertical integration will vary significantly depending on the specific products, scale of operations, and chosen business model.

Sources:

Posted on

The need to develop super capacitors

iHemp Washington
‘The center of all things hemp’
The need to develop super capacitors

With over 500,00 uses for the hemp plant claimed it may come as no surprise that none of the plant need go to waste. Researchers are using so called waste fibres and fines from the decortication of the stem to create lower-cost energy storage.

Alternet Systems, a company dedicated to energy storage and EV tech, has purchased land in New York to grow and process hemp as a component in supercapacitors, a form of energy storage that can be charged much faster than lithium-ion or any other type of battery.

Using hemp for energy storage

In February 2019, Alternet Systems hired David Mitlin, a professor at New York’s Clarkson University who has been researching hemp for energy storage for years. Mitlin’s research uses hemp bast, the bark of the hemp plant and a waste product during hemp production, as a replacement for graphene, a much more expensive material, in supercapacitors.

Because of its strength and light weight, manufacturers use graphene, a material composed of an atom-thick layer of carbon, to create nanosheets for capacitor electrodes.

However, it’s quite expensive. The hemp bast Mitlin uses is much cheaper than graphene and, on top of that, Mitlin says their hemp supercapacitors have been able to store 12 watt-hours of energy per kilogram – over 2x as high as conventional supercapacitors.

By heating the hemp bast for 24 hours at 350 F, then adding even more heat afterwards, Mitlin found they can turn the bast into carbon nanosheets, just like the conventional graphene nanosheets.

In a 2014 interview with American Chemical Society, Mitlin noted: “We’re past the proof-of-principle stage for the fully functional supercapacitor,” he says. “Now we’re gearing up for small-scale manufacturing.”

Elon Musk, always the visionary, predicted that supercapacitors, not hydrogen, would be the breakthrough for electric vehicles.

“Ultracapacitors charge and discharge in seconds, have a lifetime of up to 500 times that of lithium-ion batteries, and are highly reliable.”

Supercapacitors charge quickly, but can’t store much energy

Like lithium-ion batteries, supercapacitors are able to store electricity, though each has its own unique benefits and drawbacks that limit their applications.

Li-ion batteries enjoy fantastic energy density, meaning they’re able to hold large amounts of electricity at one time – about 100 to 200 watt-hours per kilogram. They’re also relatively inexpensive, making lithium a good complement for renewable energy systems.

However, lithium-ion batteries aren’t perfect. They take a long time to recharge. They suffer from a limited lifespan due to the wearing down of internal components. And while they can store lots of electricity, they can’t provide a lot of power in a single instant.

Supercapacitors, on the other hand, can charge in seconds and provide huge amounts of power instantaneously. They enjoy almost limitless lifecycle, as there are no internal components that break down, and they can charge and discharge in much wider range of temperatures.

However, supercapacitors have been left on the sideline due to extremely high cost and low energy density. While lithium-ion batteries can hold 100 to 200 watt-hours of electricity per kilogram, supercapacitors can only hold about 5 watt-hours per kg.

This makes supercapacitors worthless as energy storage for renewable systems, as they can’t hold enough energy to really be useful. However, in situations where short bursts of high energy are needed, supercapacitors are the perfect fit. For example, supercapacitors in hybrid buses equipped with regenerative braking are able to quickly harness that energy produced during braking, then immediately release it seconds later to help the hybrid bus accelerate.

Like in the hybrid buses above, supercapacitors work best when paired with a primary energy source, like a gas-fueled engine or batteries. The engine or battery provides the consistent power, and the supercapacitor provides short bursts of high power when needed.

Are supercapacitors the next step in energy storage?

If we were able to increase the energy density of supercapacitors -and decrease the cost-so they were on par with lithium-ion batteries, they could change the face of electric industry. We’d have extremely flexible energy storage with near-endless lifespan. Talk about cost-effectiveness!

Obviously, the allure is enough to peak serious investment in the technology. Energy storage and EV tech companies and researchers are actively trying to solve these supercapacitor issues. Alternet Systems is hoping Mitlin can help bring down the cost (and increase the energy density) of supercapacitors by replacing the expensive graphene with low-cost hemp bast fibre.

Link: Hemp – batteries 

Posted on

10 Reasons to switch the production economy to hemp

1. Sustainability and Environmental Benefits

Hemp is a remarkably sustainable crop, requiring minimal water, pesticides, and fertilizers compared to conventional crops. Its rapid growth cycle allows for multiple harvests per year, further enhancing its sustainability.

2. Economic Diversification and Job Creation

The cultivation, processing, and utilization of hemp can generate significant economic opportunities, creating new jobs and businesses in various sectors, including agriculture, textiles, construction, and biofuels.

3. Resource Efficiency and Waste Reduction

Hemp can replace a wide range of environmentally harmful materials, such as conventional plastics, paper, and cotton, reducing our reliance on these resources and minimizing waste generation.

4. Soil Regeneration and Improvement

Hemp has the remarkable ability to improve soil health by replenishing nutrients and organic matter, making it a valuable tool for sustainable agriculture.

5. Environmentally Friendly Building Materials

Hempcrete, a composite material made from hemp fibers and lime, is a sustainable and eco-friendly alternative to conventional building materials, offering excellent insulation, soundproofing, and fire resistance.

6. Natural and Sustainable Personal Care Products

Hemp-based personal care products provide a gentle and natural alternative to conventional products, offering skin and hair care benefits without harsh chemicals or environmental impact.

7. Nutritious and Sustainable Foods

Hemp seeds are a rich source of protein, fiber, and essential fatty acids, making hemp-based foods a healthy and sustainable addition to our diet.

8. Circular Production Streams and Waste Reduction

Hemp’s versatility allows for a wide range of applications, reducing the need for single-use plastics and other disposable materials, promoting circular production streams.

9. Innovative Applications and Research

Hemp offers a wealth of potential applications across various industries, from textiles and construction to pharmaceuticals and biofuels, fostering innovation and research.

10. Contribution to a Cleaner and Greener Planet

Switching to sustainable hemp production can significantly reduce our environmental impact, promoting a cleaner and healthier planet for future generations.