Commercial Hemp in Canada - Year two

Roddy Heading

Hemp Futures Study Group
P. O. Box 1680, Niagara on the Lake Ontario
LOS IJO Canada, e-mail: rheading@becon.org

        Industrial hemp is growing in 9 of 10 Canadian provinces in 1999, our second fully commercial year. The only province not attempting to grow hemp was Newfoundland, whose short growing season and harsh North Atlantic climate will not adequately ripen corn (Zea mays).
        Official totals for the 1999 Canadian crop will not be available until the late fall, but according to an informal survey of licensed hemp growers conducted in June by the Hemp Futures Study Group, we estimate that Canada has approximately 30,000 acres (13,600 ha) of licensed hemp sown, an almost five-fold increase over the initial hemp crop of 5,500 acres in 1998.
        If this rate of exponential expansion continues, Canada will become one of the world’s most prolific modern hemp producing nations in the new century ahead. Canada enjoys a brief monopoly as sole hemp-providing nation in the Americas.
        Health Canada reported that most of the 1998 harvest of hempseed was exported to the United States for processing into human foodstuffs. About one third of the 1998 seed harvest, was certified as organically grown and sold at a premium price. Early estimates for the 1999 hemp "grain" harvest reveals that more than 1,500 acres are being grown certified organic. Most Canadian hemp farmers growing hempseed for export told our survey that they will likely expand their organic grain production in 2000 and are willing and eager to meet international criteria when it appears. They see organic hemp grain as the best return for their investment. They are currently delivering to New World organic food processors at premium rates, but are preparing to enter the lucrative European organic food market as soon as possible.
        Now that the perception of Canadian hemp has evolved beyond off-color pot jokes and into a responsible, respectable raw materials export industry, Federal Minister of Health Alan Rock has replaced the original "Hemp Project" boss, Ms. Jean Peart of the Bureau of Dangerous Drugs Surveillance with Mr. Neils Hanson-Trip, an inductee from the Canadian Department of Agriculture. A new "hemp boss" with a farming background, taking over the position from a federal drug regulator, suggests that our federal government has become a little more relaxed with their role as guardians of string and salad oil.
        Health Canada granted 750 hemp licenses in 1999, from more than 1,000 applications received. Those who did receive hemp licenses were able to choose from a list of 23 approved varieties of hemp - for seed oil and fibre end use - that the Health Minister allows to be sown in the Dominion of Canada for the 1999 growing season.
        Manitoba is growing more than half of the Canadian hemp crop this year, about 4,800 hectares (12,000 acres), an impressive increase over the 1998 provincial total of 690 hectares. The 1999 season will see about 125 licensed Manitoba farmers growing hemp. Many of them are now experienced hemp cultivators and most are on contract to Consolidated Growers and Processors (CGP). Manitoba farmers have placed an additional 2,000 acres of choice Manitoba farmland on reserve for even more hemp in case CGP is able to secure additional seed stock for sowing, which was in short supply this year.
        In spite of alleged CGP stock transfer irregularities and the resignation of Canadian operations president in the Spring, CGP is proceeding with plans to erect a new hemp processing factory in Dauphin, Manitoba. They hope to have this factory up and running by 2001 with a combined annual capacity of 100,000 tons of stalk and 15,000 tons of seed. Their proposed new 15 million dollar factory will create more than 100 new careers in Cannabis.
        The Dauphin hemp works, conveniently situated in the heart of the best Manitoba farmland, is also accessible to prime Saskatchewan farmland where CGP plans to contract farm much more hemp in upcoming years. The standing offer by CGP to purchase all the seed and stalks its contract growers can produce for the next three years is a well received market incentive that signals a bold commitment to the economy of scale; and at the same time makes it much easier for Western Canadian hemp farmers to qualify for standard crop insurance, for which they were not able to qualify for during their first year growing commercial hemp.
        Ontario, the second largest Canadian hemp producing district, has sown 3,500 acres of hemp for the 1999 season. Kenex and Hempline remain the major provincial hemp producers. Kenex engineers, working all winter in a converted popcorn factory in Painscourt, Ontario perfected critical techniques of hempseed dehulling, achieving levels of 95% seed jacket elimination and succeeded in delivering several container loads of hempseed meal from their 1998 seed harvest to American food processors. They are still processing the tail end of the 1998 seed crop and will be ready to prepare the current seed crop when it is ripe in the Autumn.
        A dozen small, but none-the-less determined, commercial Ontario hemp concerns are also cultivating or contracting production of organic quality hempseed "grain" this year. These ambitious new players are processing, packaging and distributing a narrow range of marketable hempseed products, including oils and cosmetics, entirely by themselves. All are developing direct marketing strategies for dehulled seed destined for export to Europe and America.
        Kenex sales agents in California, vending their commercial hempseed in the US, created a bit of marketing friction this Spring, the first recorded within the new Canadian hemp production orbit, with what leading American hemp food manufacturer Richard Rose calls "practically a trade war". Mr. Rose alleges that certain Canadian hempseed sales agents selling direct to medium-sized American hemp food manufacturers have irreparably damaged the profit level expectations of the entire new world hemp industry. He points out that, as a result of Canadian hemp meal sales strategy blunders, the price of top grade hempseed meal fell from US$20 to about US$5 per US pound.
        Mr. Rose is also displeased with the narrow range of offerings that have appeared on the market, as only certain low THC hemp cultivars are all that Canadian hemp growers are allowed to sow, these chosen from a list of approved varieties compiled by Health Canada. He would prefer to purchase his own choices of hempseed varieties, especially ones that develop much richer levels of specific nutriceuticals and are usable for his successful line of hempseed food products. These "other" improved varieties are readily available to Canadian hemp grain farmers, but will likely produce somewhat higher levels of THC, at maturity, than Health Canada drug content guidelines for the Canadian hemp industry allow (10 parts per million THC for oil, 0.3% THC for the growing plant). Switzerland permits up to 50 ppm of THC in their domestic hemp oil, but there are, as yet, no international standards in place that govern THC in edible oil destined for human consumption. The sooner such international standards are in place, the sooner these problems will be resolved. Cannabinoids tend to accumulate within the vegetative parts of Cannabis cultivars when grown in Canadian latitudes, but as Mr. Rose correctly points out, this does not, in any practical way, affect THC levels within the seed or de-hulled meal derived from them. Furthermore, when properly cleaned of leaf and flower dust particles at a licensed facility before export, hempseed will show, upon testing, THC levels well below Health Canada requirements.
        Ontario-grown hemp fibre has not shown the same significant market advances as the hemp grain sector, and some of last year's harvest of baled, dried hemp stalks are still in storage. Lack of hemp processing machinery and a shortage of skilled labor are the chief difficulties facing our new hemp fiber industry. The hesitant "wait-and-see" attitude within the North American vegetable fibre market is another hurdle that has to be overcome in order to attract long-term contracts to justify far greater expansion of hemp fibre production in the province of Ontario. Kenex, with substantial hemp farms near Windsor/Detroit, is growing about the same amount of hemp in 1999 as last year, approximately 800 ha. Hempline is growing slightly more hemp this year (approximately 400 ha) than last year near London, Ontario. Jeff Kime of Hempline verifies the importance of hemp's crop insurance qualification as a potent motive for even more hemp to be cultivated next year. Kenex aims to sell their future hemp fiber to major American automotive industry clients; while Hempline, the pioneer Ontario hemp company, continues to seek even larger purchase orders from American-based carpet mills.
        In the meantime, both Kenex and Hempline have each introduced their own house brand of home-grown baled hemp chips for use in horse, chicken and other livestock bedding. This "all hemp" animal bedding is demonstrably superior to traditional animal bedding based on wood shavings and sawdust as Cannabis hemp is easier and cleaner to apply, more absorbent (thus more sanitary), much longer lasting and somewhat neater to dispose of than expensive wood waste-type bedding. These offerings of Canadian-grown hemp chips arrive on the New World animal markets in convenient, dust-free and compressed 100 pound bales- at about the same price as conventional wood shavings. The recent arrival of Ontario-grown hemp bedding in Kentucky, the state known for its fine hemp and horses, was a potent motivation for their local farmers to further press the American government for the privilege of growing Cannabis once again.
        Even though oilseed hemp does not produce the same yields of hemp stalk as conventional fibre-producing varieties grown for that sole purpose, the former stalks are completely suitable and attractively priced for smaller scale paper manufacturers seeking to develop super virgin hemp paper for export niche markets. As a direct result of hemp’s successful reintroduction into the Canadian agricultural milieu, some cautious fine paper mills in Southern Ontario and Quebec are finally expressing interest in buying these "waste" hemp stems, after the seeds have been harvested. This industrial gesture towards experimenting with hemp-derived paper pulp is perhaps the most important advance for modern hemp in recent years. To a nation like Canada, who derives a large part of our economic livelihood by cutting down trees and cooking them up into paper to feed the printing presses of our planet, even a small shift towards utilizing domestically produced hemp in this enormous industrial process will have a significant favorable impact upon the fortunes of our promising new hemp industry.

Table 1. 1999 Canadian hemp crop in the field by Province (in acres).
Newfoundland (none)
Nova Scotia 350+
New Brunswick 100+
Prince Edward Island 20
Quebec 100
Ontario 3,500+
Manitoba 12,000
Saskatchewan 4,000
Alberta 300
British Columbia 1,000
Total 21,370 acres *
* Does not include figures from:
- first time experimental licensed farms
- First Nations Native hemp initiatives
- commercial non participants in survey
- late license applicants
- unknown license holders
- agricultural research stations