This New Technology Could Bring Marijuana Prices Sky High

This Technology Could Bring Marijuana Prices Sky High

Food vs. Fuel

This is the moniker given to the competing use of certain agricultural products either for human consumption or as inputs in modern biorefineries. In an era searching for renewable sources of energy, emerging technology has made it possible for farmers to reconsider their land, water, and fertilizer use for energy instead of food.

What is worth more? Putting corn on your plate or ethanol in your car?

With land as a limited resource, we saw first-generation biorefineries (those that directly used the edible parts of plants containing easily transformed sugars) create a link between energy prices and food prices.

The literature claims a wide range for price increases; for example, the National Center for Environmental Economics found that for every billion gallons of ethanol consumed, corn prices would rise 2-3%. Keep in mind Americans consumed about 142 billion gallons of gasoline in 2017 according to the US Energy Information Administration.

The National Research Council reported likewise that from 2007-2009 corn prices increased by 20-40% because of demand from the biofuel sector. Despite the range, the numbers all agree on one thing:

Prices of agricultural products go up when technology opens new uses.

Likewise, the price of food goes up when there is less available. Really, this is not a surprising supply and demand relationship.

But what does that have to do with the price of cannabis?

Expanding Source: Second Generation Fuels

Luckily for corn eaters, 2nd generation biorefinery technology focuses on using lignocellulosic biomass instead of the high-sugar vegetables that would make it to the supermarket. That means the farmer can grow corn to maturity, sell it as food or feed, and then use the leftover stems, leaves, and cobs (called stover) in biorefineries.

Unfortunately for cannabis smokers, the implication of second-generation technology is that a biorefinery can look to almost any plant as a potential biomass to synthesize a range of final products.

What plant grows quickly, exhibits natural resistance to pests, and is likely to develop a large infrastructure with trained farmers and facilities?

We see this happening right now with tobacco products in South Africa. As public health initiatives aim to curb smoking rates, the government is searching for a way to handle the decreased demand for tobacco products on the established infrastructure of the tobacco industry. By teaming up with Boeing and creating a new hybrid of tobacco, they have found that tobacco farms can be transitioned into a source of biofuel.

Solaris hybrid

Under the name of Project Solaris, SkyNRG and Sunchem SA have created pilot farms of the high-energy yielding “Solaris” hybrid.

In July of 2015, celebrating South African Airline’s 100th anniversary, a plane flew for the first time completely on fuel derived from tobacco plants.  This offers a use for the tobacco infrastructure, preserving jobs and increasing the welfare of farmers connected to the plant. In fact, the Solaris hybrid is nicotine free. The momentum of this transition is so powerful that the hybrid selection is a complete departure from the plant’s original purpose as a consumable.

A farmer can now choose between two tobacco options: selling to manufacturers of products like cigarettes or selling to biorefineries for jet fuel. What seeds go in the ground is now a zero-sum financial decision.

Where could Cannabis fit in?

The first generation of biorefinery led us to question food or fuel. The second generation expanded that question. If any part of a plant is a potential biorefinery feedstock, what biomass should we dedicate water, fertilizer, and land to?

Using cannabis to create jet fuel

Cannabis, a plant whose massive demand has existed for decades subversively under “war on drugs” legislation. Where legalization occurs, rapid economic growth and infrastructure formation follow.

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To consider the potential use of Cannabis in the creation of jet fuel, the crucial step to transforming woody biomass into other end-products by breaking apart these stable structures and creating a starting point for further transformation needs to be examined.

At the 8th International Conference of Applied Energy, Yuqing Li et al. presented a two-step process treating corn stover with sulfuric acid and steam to create furfural (a versatile platform chemical) and then hydrogenate the solution into c9 and c10 jet fuel alkanes. The estimated cost? $1540 per ton including the operating costs of a facility.

The current global average price of jet fuel as of August 24th, 2018 is 717.1/mt, according to the International Air Transportation Association (IATA). The pilot technology and estimated financial model puts bio-based jet fuel at more than double the price of conventional crude oil sources.

Price of cannabis

At comparable levels of cellulose (about 44% in Cannabis shives compared to the 39% in the corn stover used in the study), if this process or another process can become more economical, the value of the cannabis plant over the value of the consumable buds would become a decisive factor.

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So how will this change the price of cannabis consumption? First, hybrid selection could follow a similar route to tobacco in South Africa, choosing plants to produce more suitable biomass for feedstock as opposed to the highest quality buds (e.g. THC or CBD content). That would lead to a shift in the use of cannabis infrastructure, reducing the supply of consumables. 

Right now, we see many entrants into the recreational and medical cannabis markets driving prices down and tightening margins, so for growers that may not be a bad thing.

Second, Cannabis is already being used as a simple, economical heating source in places like Sweden in the form of hemp briquettes and pellets.

A technological pathway of bringing the energy value of the plant to biodiesel and jet fuel would mean the extra nutrition, lighting, and labor costs of harvesting the bud may not be worth it.

Third, the theoretical energy value of hemp is already being considered against traditional energy crops. In addition to the plant’s high-energy value, Thomas Prade wrote in his doctoral thesis:

“Advantages over other energy crops are also found outside the energy balance, e.g. low pesticide requirements, good weed competition and suitability as break crop in cereal-oriented crop rotations. Improvements in hemp biomass and energy yields may strengthen its competitive position against maize and sugar beet for biogas production and against perennial energy crops for solid biofuel production.”

Conclusion

If the scale of Cannabis’s use in energy products starts to beat sources like corn, we could see a cannabis industry that begins to exhibit the characteristics of the corn industry in the food vs. fuel debate. Will our next weed vs. jet fuel?

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