Hemp market smoking with U.S. rule changes

Kroeger Foods and Costco are among new American customers

MOOSE JAW, Sask. — At least one Canadian company sees nothing but good times ahead as the United States loosens its rules regarding hemp production.

Clarence Shwaluk, director of farm operations at Manitoba Harvest Hemp Foods, said demand is so strong that Canadian producers shouldn’t be worried about losing markets.

“Right now they’re just at the research stages,” he said of the most recent U.S. farm bill, which allows hemp to be grown for academic research.

“I expect them to go very, very quickly from research into full-scale production.”

He said Costco has just taken its first container from Manitoba Harvest’s Winnipeg plant, and large American retailer Kroeger Foods has agreed to sell hemp products.

“We know in the U.S. we’re just scratching the surface,” Shwaluk told the Farming For Profit conference.

He said there was a lot of excitement among farmers about this “new” crop in 1998, but it was a rocky start. Overproduction led to price crashes at least twice, and producers grew reluctant to take another chance.

However, he said processors now use contracts to ensure a steady supply and reliable market.

Canadian producers grew 66,000 acres of hemp in 2013.

“This year my prediction is that we’ll hit 90,000 to 100,000 acres,” Shwaluk said.

Most of that is grown on the Prairies.

“A crop like this, because of its background, is not without its administrative burden,” he said.

Growers require police background checks and must supply GPS co-ordinates for their fields.

There might be mandatory THC testing on the crop, depending on the variety.

Cannabis sativa contains two main chemicals: THC and CBD.

THC is found in marijuana, and it takes one percent of the chemical for users to get high, said Brandon McFadden, assistant professor at the University of Florida.

CBD, the chemical in hemp, counterbalances the high of THC and is leading to increasing medical use in people with seizures.

“Technically, to be classified as hemp most people say it would require a level of THC of 0.3 percent or less,” McFadden said.

“At that level, from what I understand, you would die of smoke inhalation before you ever felt high.”

Shwaluk said marijuana and hemp look different in the field, and growers shouldn’t worry that someone might try to hide marijuana in their hemp crop.

“The biology says it won’t work,” he said.

The plants would cross-pollinate, the hemp would “win” and the THC content would be gone.

Hemp growers must use certified seed, which costs $2.50 per pound. The seeding rate is 25 to 30 lb. per acre, and the price for conventional hemp is 81 to 84 cents per lb.

“Our conventional growers, depending on the yield, will get in the neighbourhood of $650 per acre of gross revenue,” Shwaluk said.

“Organic, the price per pound is quite a bit higher and they can average on a good yield about $725 an acre.”

He said there is significant demand for organic hemp.

Hemp is similar to canola in terms of inputs. Shwaluk said harvest, storage and cleaning are critical. Most conventional equipment can handle the crop, but growers will need grain dryers.

Potential growers should talk to a processor before starting production.

Manitoba Harvest is building a new processing facility at Gilbert Plains, and Shwaluk met recently with a company from the United Kingdom that wants to establish a fibre operation in Alberta.

He said fibre processing would complement the food business and add a secondary revenue stream.

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