STONEHEDGE MAKES PITCH TO FARMERS TO GROW INDUSTRIAL HEMP

Stirling - Stonehedge Bio-Resources Inc. is looking for farmers to
grow industrial hemp that can be turned into insulation, biomasonry
concrete and fuel pellets. It's also in the market for a site to
build a 60,000-square-foot manufacturing plant somewhere along the
Highway 401 corridor between Belleville and Port Hope that will
employ more than two dozen people.

"The total project is probably going to be in excess of $15
(million), maybe close to $20 million," John Baker, president of
Stonehedge, said in an interview. More than half of that will spent
on specialized equipment developed in Europe where industrial hemp is
used extensively in a variety of products, including auto parts.

The decortication factory will be the first of its kind in North America.

The Stirling-area company has "commitments" of capital from investors
in the United Kingdom and the United States who need "a supply chain
. to grow their business," - mainly hempcrete, Baker said. They're
"ready to develop the U.S. market."

Other potential investors have expressed an interest in purchasing
equity in Stonehedge as well and Baker has approached the provincial
and federal governments for financing in the form of loans.

However, even though "there are all kinds of government programs for
the green sustainable economy," the funding is "hard to access,"
Baker says. "It's a slow ... frustrating process.

"It's like the programs were designed to fund the multinationals, not
really startups (or) small companies," he said. "The mechanism is
constipated ... We just have to be patient."

Baker said he hopes to have all the financing he needs to launch the
venture in place by May 1.

In the meantime, Baker will be reaching out to farmers in Hastings
and Northumberland counties to sign contracts to grow hemp.

Stonehedge has scheduled two information sessions next week - March
16 at the Centreton Community Hall in Northumberland County and March
17 at the Ivanhoe Community Hall in Hastings County. Both meetings
begin at 1:30 p.m.

Baker has already held focus groups with a number of farmers to find
out what they would need in order to add hemp to their regular crop
rotation of corn, soybean and wheat.

"I believe it will be one of the most profitable crops they can grow,
if not this year, within a couple of years," he said. "It will be
much more stable in pricing than the volatility they see with other
cash crops ... It will be a very stable long-term type of venture."

Hemp is attractive in other ways. It's an "extremely deeply rooted
crop (that) leaves the soil in beautiful shape," Baker said, and its
input costs are lower as it doesn't require pesticides or herbicides,
"but you do need to feed it fertilizers."

Roy Taylor, a cash crop and beef farmer from Roseneath, attended
Baker's presentation at the Quinte Farm and Trade Show in Trenton
last month and was one of about two dozen who expressed an interest
in learning more about growing hemp. Prices for cash crops have been
good but "are a little bit lower right now," he said, so adding hemp
to the mix could be "another egg in the basket."

He said he would like to try growing "a little bit" this year to
determine its potential.

Baker plans to sign only single year contracts at the outset, in
order to find out what works and what needs tweaking. After that it
will be three-to five-year contracts. His preference is for 50 acres
at minimum but it might take "a whole lot of people growing 25."

The planting should be done in mid-April.

Harvesting the hemp, which can grow to a height of 15 feet in 100
days, will require the services of a custom operator because special
equipment is needed to cut it. The grower will be responsible for
raking, baling and storing the straw until it goes for processing.

Growers will need to be licensed which will involve having a police
check done to ensure they haven't a criminal record, Baker says. The
sites are registered with Health Canada.

The manufacturing plant will process hemp straw into three components
that Baker believes "there is a strong market for right across North
America." About half of the material would be used to make hempcrete,
one-quarter would go into producing insulation, "and a fairly
significant portion" would be converted into energy pellets. "There's
virtually no waste," Baker said.

The plant will be able to process straw from up to 20,000 acres a
year but production will ramp up slowly. Baker is looking to plant
5,000 acres this year, more than 10,000 acres the following year and
in excess of 15,000 by year three.

Although hemp resembles marijuana, it has little THC, the chemical
that gives marijuana its hallucinogenic properties. Hemp straw is
"regarded as the strongest natural fibre in the world" and the woody
core material is used to make hempcrete, a lightweight alternative to
concrete that is "totally fire retardant," and resistant to moulds and pests.

Baker, a plant scientist and researcher, "stumbled across the fact
that there was remnant historical cannibis biodiversity in this area"
about 10 years ago. The British navy had introduced hemp to Canada to
create an alternative source to its traditional supplier, Russia, in
order to continue manufacturing rope and sailcloth.

"It was a military crop," Baker says, introduced to this country when
relations with the United States deteriorated to the point that it
led to the War of 1812.

Baker began "bioprospecting" and discovered that seeds originally
from Russia had "learned how to adapt and survive here in isolated
pockets." He collected and preserved more than 25 different lines of
biodiversity and then began planting research plots to determine if
the plant had any agricultural value. He cross-bred Upper Canada hemp
with the best grown in Europe and was able to achieve "tremendous
improvements (in) yield, adaptability, seed size, a whole series of
traits," Baker said.

He's registered one of the varieties he developed and has another
four "in the pipeline," each of them with characteristics suited for
a particular application.

He told those who attended his farm show presentation that the
"unique germ plasma" he's developed will give hemp growers in Canada
"a distinct advantage worldwide."