Manitoba hemp firm plans growth

Spectacular revenue growth | Hemp Oil Canada plans to open the new facility by the end of 2014

One of Canada’s most profitable food processing companies is planning to capitalize on its success and increase production of what may be the hottest food item in North America.

Hemp Oil Canada, which processes hemp seeds, hemp seed oil and hemp flours, is planning to double or triple the capacity at its location in Ste. Agathe, Man.

“Next spring is when we look to break ground on that (new) facility and have it done by the end of the year,” said Brenda Giesbrecht, sales and marketing assistant with Hemp Oil Canada, which describes itself as Canada’s largest wholesale supplier and private label packager of hemp food products its website.

The size of the new plant hasn’t been determined, but Giesbrecht said it should be twice the size of the existing plant or larger.

Hemp Oil Canada needs to increase production capacity because over the last five years its sales have grown by 221 percent. Profit 500, the guide to Canada’s fasting growing companies, ranked Hemp Oil Canada eighth in the country amongst food processing and distribution firms in terms of revenue growth in the last five years.

In addition to Hemp Oil Canada’s expansion plans, Manitoba Harvest, the other major hemp processor in Manitoba, is expected to increase its production capacity.

Demand for hemp foods in North America and other parts of the globe is mushrooming, said Anndrea Hermann, who runs Ridge International Cannibus Consulting.

Hermann said sales of hemp food products in the U.S. reached $500 million in 2012 and Canada is the major supplier to that market.

As a result, Canadian hemp acres have increased dramatically over the last several years.

According to Health Canada, which grants licences for hemp acres, Canadian acres were just under 14,000 in 2009 and hit nearly 55,000 in 2012. The majority of those acres are in Manitoba, Saskatchewan and Alberta, with a few thousand acres in other provinces.

Industry analysts were expecting acres to rise this year, but Kevin Friesen, who contracts hemp acres for Hemp Oil Canada, said prairie growers likely planted 45,000 acres of hemp in 2013.

“It’s probably down slightly. Last year was a decent crop across the board,” said Friesen, who farms near Laird, Sask. “I think there was a little extra grain produced than people expected.”

In addition to leftover stocks of hemp seed, Manitoba acres dipped in 2013 because of contracting problems, said Jeff Kostuik, Manitoba Agriculture diversification specialist in Roblin, Man.

Kostuik said a contractor was planning to sign up hemp farmers this spring, but those arrangements fell through in the last minute.

Despite the slight acreage de-crease in 2013, hemp is highly competitive with canola, Friesen noted.

“Especially right now, when you’re looking at $10.50 (per bushel) canola … There’s a few hundred dollars, additional profit, growing hemp per acre.”

Contracts for conventional hemp are averaging 70 cents per bushel and organic hemp is around $1.20 per bu.

“If you are doing a 1,000 lbs (per acre), which you should easily get as a conventional grower, you’re getting $700 gross revenue (per acre),” Friesen said.

Looking forward, he said that kind of revenue and profit should result in more conventional hemp acres, so Canadian companies should have sufficient supplies of hemp grain.

It’s a different story for organic hemp grain, as demand still exceeds supply, Friesen said.

“On the organic side, it’s more of a challenge.”

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