The company currently produces bio-coal, a green energy alternative to traditional coal, using timber waste as feedstock.
With a high energy density of up to 13,000 BTUs/lb, the company’s bio-coal is said to comply with the renewable portfolio standards and renewable energy credits (RECs) in the US.
Under the latest deal, Vencor will supply bio-coal samples made using industrial hemp.
Vega will test the samples for ash, sulphur and volatile content, and fixed carbon and BTU content, to evaluate if it qualifies as bio-coal.
Vega Biofuels chairman and CEO Michael Molen said: "With the explosion of the cannabis industry in the US, industrial hemp could very quickly become an extremely valuable agricultural commodity.
"We anticipate that the testing will be positive and that we will be able to show that bio-coal can be manufactured from industrial hemp plants."
A variety of Cannabis sativa, Hemp belongs to the same plant species as marijuana.
Industrial hemp varies genetically and is distinguished by its chemical characteristics. It has been used as a non-drug compound to produce industrial and other goods in the US.