Date of Graduation

8-2022

Document Type

Thesis

Degree Name

Master of Science in Agricultural Economics (MS)

Degree Level

Graduate

Department

Agricultural Economics and Agribusiness

Advisor

Michael P. Popp

Committee Member

Sunjin Ahn

Second Committee Member

Wim Verbeke

Keywords

Cannabidiol, CBD, Farm Management, Hemp, Willingness to pay

Abstract

This thesis is comprised of studies examining cost of production differences between outdoor (open-air) and indoor (greenhouse) production of hemp flower on a small-scale hemp farm. Investigated also are oil extraction processes as well as drying costs and methods i) under controlled ambient conditions (air-drying) for 14 days at 65-70°F and 45-60% ambient humidity, ii) using infrared radiation (IR) for varying durations at an intensity of 2.51 kW per square meter, and iii) freeze-drying or lyophilization based on literature review. Critically, these drying methods involve tradeoffs related to time required, amount of energy consumed, and investment required. Also, they impact dried hemp flower characteristics (cannabinoids, terpenes, presence/absence of molds and fungi) that in turn are expected to drive Cannabidiol (CBD) oil quality. With costs for quality attributes of crude CBD oil quantified, the study examined the consumer willingness to pay (WTP) for CBD oil at varying CBD concentrations for alternative drying methods. Willingness to pay estimates assist growers with decision-making about what end users to target to maximize profit, whether consumer preferences could dictate one of the three drying methods and at what CBD concentration to sell. Cannabinoid conversion was increased when using IR-drying whereas air-drying significantly increased the synthesis of cannabinoids in their acid forms. Results have shown that hemp production can be profitable at small scale (< 1 acre) and that production and processing methods used need to take final product attributes into consideration. CBD concentration in CBD oil is reflected in prices charged and among the major factors driving consumer preference as well as cost of production. Lastly, WTP results suggest that most consumers are not sensitive to drying method. These findings provide information to this emerging industry by providing recommendations that assist with marketing CBD oil while managing cost of production.

Available for download on Monday, October 07, 2024

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