1 Industrial Hemp: A Grower’s PerspectiveSeth Crawford, Ph.D. Co-Founder, Jack Hempicine LLC

2 Overview Policy and Legal FrameworkCannabis Agronomy: The Plastic Plant Next Steps Disclaimer: I am simple farmer, not a plant scientist.

3 The Promise and Necessity of HempCannabis is Oregon’s most valuable agricultural commodity Over $1 billion in farm gate value in 2014 Roughly 2/3rds that value derived from illegal exports Changes to adult use and medical laws are squeezing out small producers Increased economic inequality, particularly in traditional growing “hot spots” Legalization requires a new approach if Oregon is to remain a leading cannabis exporter

4 Legal Background Possibility for “industrial hemp” elucidated by 9th Circuit USCA in (HIA v. DEA) CSA specifically prohibits synthetic THC and “marijuana” that contains THC Oregon adopts industrial hemp law in 2009 (SB 676) Oregon voters pass Measure 91 in November 2014—directs ODA to issue hemp licenses 2014 Federal Farm Bill defines “industrial hemp” and allows production within states for research purposes, prohibits DEA from intervening (Sec. 7606) HIA v. DEA sets up a new class of cannabis—industrial hemp—by stating that synthetic THC is illegal and high-THC marijuana is illegal (their interpretation of the CSA). That ruling and the 2014 farm bill create “industrial hemp” Measure 91 = Control, Regulation, and Taxation of Marijuana and Industrial Hemp Act

5 2015 Requirements Federal requirements: Oregon requirements:Crop-wide average THC content must be 0.3% or below Production must be research-oriented, but allows interstate commerce Requires a license/registration from/with state ag department OR status as institution of higher education Oregon requirements: Federal guidelines + minimum of 2.5 acres must be cultivated 2 lbs. of plant material for THC testing; at least once in vegetative state and again at least 2 weeks before harvest Reporting and record keeping, seed rules, and other minor bureaucratic details

6 Why 0.3% THC? Derived from Small and Cronquist (1976)“It will be noted that we arbitrarily adopt a concentration of 0.3% Delta9-THC (dry weight basis) in young, vigorous leaves of relatively mature plants as a guide to discriminating two classes of plants. This is based on standard-grown material in Ottawa in gardens, greenhouses and growth chambers, and of course on our analytical techniques. Dr. C. E. Turner, who has conducted extensive chemical analysis of Cannabis at the University of Mississippi, has agreed (pers. com.) that this is a reasonable figure to discriminate two classes of plants.” UN guidelines inappropriately apply this as the legal maximum in flowering plants A practical and natural taxonomy for Cannabis. NOTE: This concentration level is supposed to apply to new leaves on mature, non-flowering plants

7 Hurdles If all requirements are met, this is the only 100% federally legal way to produce and sell cannabis products BUT Fiber production not economically viable in Oregon, grain marginally so (OSU Report) No grain or fiber processing infrastructure exists (2017?) No seeds are legally available in the state…yet First hemp season: 2015 5/11 farms achieve mature crops 2/5 under THC threshold and harvest

8 2016 Season Policy Updates FY 2016 Federal Budget (Dec. 18th, 2015)Clarifies the legality of interstate hemp commerce No DOJ funds can be used against Farm Bill compliant hemp producers or processors Oregon legislative short session (Feb. 1st-March 4th) Removes 2.5 acre requirement in favor of any field size on agricultural land Greenhouse production allowed Propagation freedom (clones re-legalized) Licensing replaced with ODA “registration” Working on funding for OSU—difficult in the short session

9 Opportunities National demand for CBD-infused products substantially outpaces supply CBD market value > THC market value THC and CBD are created through the same biochemical pathways Olivetolic acid  CBGa  THCa OR CBDa CBD is not in the CSA, legal internationally Occasional high CBD mutants exist in drug cultivar populations (~1 in 500) Precursor CBG is very valuable too! $20m / kg (bulk discount?) Cannabidiol (CBD)

10 Key Cannabinoids and TerpenesCannabigerol (CBG)* Cannabichromene (CBC) Cannabicyclol (CBL) Cannabivarin (CBV) Tetrahydrocannabivarin (CBDV) Cannabidivarin (CBDV) Cannabichromevarin (CBCV) Cannabigerovarin (CBGV) Cannabigerol Monomethyl Ether (CBGM) Tetrahydrocannabinol (THC)* Cannabidiol (CBD)* Cannabinol (CBN) Linalool Beta-Caryophyllene* Beta-Myrcene* D-Limonene Humulene* Alpha-Pinene Beta-Pinene Alpha-Bisabolol Carene Terpineol Cineole Cannabinoids on the left, terpenes on the right. I can’t think of another plant species with the level of plasticity seen in cannabis

11 Cannabis Agronomy: The Plastic Plant

12 Cannabis Agronomy: The Plastic PlantGreat rotation crop in organic transition programs Bioremediant Dense plantings = weed suppression Diverse planting depending on production goals Fiber: 300 plants / sq. meter Grain: 150 plants / sq. meter Essential oil: 1 plant / sq. meter? Nitrogen requirements similar to corn and wheat Optimum: 130 lbs/acre We’re experimenting with planting densities ranging from 1 plant / 4 sq. ft. to 64 sq. ft. this season

13 Cannabis Agronomy: The Plastic PlantMany practically monogenic traits… Cannabinoid inheritance Terpene inheritance Photoperiod sensitivity (day length vs. autoflower) Powdery mildew resistance Plant structure Other economically important traits more complex Yield Total cannabinoid content Flower induction timing in photoperiod plants Pest and disease resistance Sex-linked traits VERY similar to hops It is important to note that many of these findings are anecdotal or derived from our own work at this point; we need more genome-wide studies to validate

14 The Promise of PlasticityGW Pharmaceuticals Literature CBD Inheritance (2003) – Bt / Bd CBG Inheritance (2005) – Bo CBC Inheritance (2009a) Cannabinoid Free Plants (2009b) THCV, CBDV, CBGV, CBCV (unpublished) Etienne de Meier et al. 2003:. Thought to be co-dominant alleles at a single locus. THC + CBD = 1:1 F1, segregating to 1:2:1 in the F2. 2005: Same with CBG, except it is produced by a variant SNP of the CBDA synthase 2009a: Juvenile plants are high in CBC, then it declines; CBC can be the dominant cannabinoid when its gene is activated, resulting in low / no CBD/THC plants, rich in CBC The full mechanism is unknown. High CBC genotypes are known as “Prolonged Juveniles” 2009b: Another gene is proposed: this one knocks out all cannabinoid production, but leaves terpene production unaffected

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16 Additional Research Ram and Sett (1982): induction of male flowers in female plants Mandolino et al. (1999): Identification of male markers in Cannabis Alghanim and Almirall (2003): microsatellite markers for DNA typing and genetic relatedness Gilmore and Peakall (2003): more microsatellite markers Pacifico et al. (2005): marker-assisted selection for chemotype Techen et al. (2010): Early sex determination using SCAR in qPCR Van Bakel et al. (2011): draft genome and transcriptome of Cannabis Staginnus et al. (2014): identifies PCR marker linked to THCA synthase polymorphism McKernan et al. (in press): THCA and CBDA synthase variations; polyploidy attributed as potential cause of mysterious THC to CBD ratios Lynch et al. (in press): genomic and chemical diversity in Cannabis

17 Important Synthase FindingOnofri et al. (2015) find that CBDAs and THCAs are not monogenic, but are tightly linked Same chromosome, 8 centimorgans apart Evidence of a gene duplication event Getting the “right” SNP can be critical (Onofri + McKernan) 9 THC variants, 12 CBD variants More to be (publicly) identified soon… “Wrong” SNP likely responsible for 1/5 Oregon hemp farms failing THC test “Hemp” varies from 0-1.5% THC when mature Onofri et al. 2015 Challenges the arbitrary demarcation of Small and Cronquist (1976)

18 829,562 Hops Hops: 829,562 nucleotides sequencedCannabis: 96,241 nucleotides Common ancestor 27.8 million years ago.

19 FY 2017 Federal Legislative GoalsDeschedule industrial hemp S. 134 (Wyden, Merkley, McConnell, Paul) i.e. OR + KY Fund USDA-ARS research position in Corvallis Replace 0.3% THC with genetic validation (unlikely!) Establish “Lowest Observed Effect Level” in consumables EU hemp producers pushing for 5mg THC max per day Concordant rules between countries expands market reach CB1: primarily in the brain CB2: throughout body

20 Research Areas of Interest to GrowersAgronomic Efficiency Water use Maximize biomass production Crop rotation Mechanization (harvest + drying) Genomic-Assisted Breeding*** High cannabinoid/low THC varieties Targeting novel phytocannabinoids Processing Molecular fractionation Pathogens Powdery mildew Botrytis Phytophthora Aspergillus Pests Mites (tetranychidae and tarsonemidae) Corn borers Seed Certification**** Electronic Pinning System

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22 About Us Eric (left) owns a successfullandscaping construction company in Eugene Seth (right) is a cannabis policy researcher at Oregon State University We have 30 years of combined cannabis production experience Expanding to 63 acres in 2016 Currently in R&D stage for 5 new cannabinoid-rich industrial hemp seed lines selected for Oregon’s unique climate