HOUSE_OVERSIGHT_024828.jpg

COWEN COLLABORATIVE INSIGHTS February 25, 2019 will be destroyed.) Seeds that are certified (sold by domestic and international hemp seed distributors) contain </=0.3% THC or produce hemp with </= 0.3% THC. CBD is more concentrated in female flowers (3%-6%) compared to male flowers making male seeds unwanted. Unfertilized female flowers have been found to produce higher CBD levels than female flowers fertilized by male plants making male seeds unwanted in a production field. We note that seed mix (male and female) costs are significantly lower than feminized seed costs (incremental work is needed to increase the supply of feminized seeds). Conversations with industry participants indicate that clones (first grown in a greenhouse and then transplanted to the field) are becoming more common as they provide a cheaper path to all female flowers in the field. Retail clones can cost $4-$7 each and can be produced for $3 each with access to a greenhouse. e = Test soil for contaminants. We note soil that has been used for corn production has been cited as supportive for maximizing hemp yields. e Water System Installation. A drip irrigation is most effective way to water hemp as it allows roots to breathe and conserves the most water. e = Pesticides: Currently, pesticides are illegal for industrial hemp cultivation which makes plastic mulch an important step. So far, disease pests and insects have not been found to significantly impact yields. e = Fertilizer. Fertilizer requirements similar to wheat are considered adequate with nitrogen the most critical. e Planting. Adequate soil moisture and temperature (>/=50°F), which influences timing for planting, is recommended for successful germination. Industrial hemp can be planted in late April in Kentucky and late June in Vermont. Planting depth for seeds should be ~0.50 inches. Female seedlings, started in a greenhouse approximately 6 weeks prior to planting, or transplanted female clones (planted with root structure), can be planted into black plastic outdoors to control weeds. 5 ft x 5 ft plant spacing has been found to be ideal and results ina population of 1,742 plants per acre. e Harvest. Average time to harvest a 6 inch clone is 90-120 days, Flower buds from outdoor plants are removed by hand or using a debudder machine after using a chainsaw or lopper to cut the plant down. Flower bud harvest is labor intensive and can take ~30 hours per acre. Flower buds in a UVM study were dried at 80°F for 18-36 hours until dry enough for storage without molding. Indoor storage requirements creates a production challenge. As with most crops, variations in yield can result from variations in genetics (variety), soil, weather, and other growing conditions. e = Testing. State Departments of Agriculture conduct field and greenhouse inspections for THC levels, which is the only way to separate hemp from illegal cannabis. Crops that test >0.3% THC will be destroyed. 12 COWEN.COM HOUSE_OVERSIGHT_024828