Hemp opportunities seen for grower, value-added

The last couple of years have been problematic for Canada’s hemp industry because of an over-production of seed, stagnant acreage growth, the potential of U.S. competition and excessive regulations.

Yet, despite the difficulties, many people in the sector remain confident about the future of hemp, a crop that has been legal to grow in Canada for nearly two decades.

“I’m even more convinced at this point in time, than I ever was, that the hemp crop could be a significant revenue opportunity, both in terms of return to the producer and processing, value-added,” said Russ Crawford, president of the Canadian Hemp Trade Alliance president.

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Crawford is optimistic because hemp seed cultivation and production of hemp food, such as oil and protein, has grown from a tiny industry in Canada to one that was worth more than $100 million last year.

Hemp food consumption and exports are up, but acreage is flat in Western Canada.

The industry was expecting acres to rise to 250,000 by 2018, up significantly from recent levels of 70,000 to 100,000 acres, but farmers produced more seed than food processors needed in 2014 and 2015, resulting in a glut.

The industry has been working through the excess thanks in part to increased sales to South Korea.

Canada’s hemp trade will gather at a conference in Saskatoon in November to discuss production, exports and the state of the industry.

The number one point of discussion will likely be Health Canada regulations that govern the production of hemp, such as testing for THC, the active ingredient in marijuana.

The alliance wants the government to modernize hemp regulations because it believes many of the rules are extreme, outdated or unnecessary.

“As an example, you’re not al-lowed to leave grain (hemp seed) in the seeder over night,” Crawford said. “The seed needs to be left under lock and key.”

Those sort of regulations, plus the burdensome paperwork, deter some farmers from cultivating hemp.

The alliance is asking the government to ease back several rules, such as:

  • reduce testing for THC content
  • reduce criminal record checks for growers
  • permit use of the whole plant, including flowers, and leaf material

The last one could be critical because there is booming interest in cannabinoids, which are phyto-chemicals found in the flowers and tissue of hemp plants.

Health Canada prohibits the harvest of hemp flowers and tissue to extract such compounds. Evidence suggests that cannabinoids could be used for pain relief and anti-inflammatory and anti-seizure treatments.

“We are asking for total crop utilization because we can’t make something as benign as essential oils because we can’t work with the flowering parts of the plant,” said Anndrea Hermann of Ridge International Cannabis Consulting.

“We can’t make hemp tea like our colleagues in Europe can.”

Crawford envisions a future where cannabinoids could be a significant source of revenue for hemp growers.

“My gut tells me there’s going to be more value coming out of industrial hemp from the cannabinoids than the food and the fibre combined,” Crawford said. “There is a medicinal application for this that could be global in nature.”

However, Canada is falling be-hind other jurisdictions that permit extraction from hemp and testing of cannabinoids.

“Ironically, in the United States they’re allowed to do that kind of testing … (but) here we are, standing on the outside, watching all this happen,” he said.

“We (Canada) are doing a good job on food, we’re doing a terrible job on (hemp) fibre and we’re doing zero … on any kind of therapeutic or medicinal applications of the plant.”

Crawford and others are concerned about Ottawa’s position on the whole plant use of hemp. Prime Minister Justin Trudeau has committed to legalizing marijuana use, and hemp might be ensnared in those regulations.

“I have a fear they are going to bring the two (hemp and marijuana) closer together,” said Gary Meier, president of Hemp Production Services, a hempseed production company.

“I think there’s a complete lack of understanding at the federal level … that there is a significant difference between industrial hemp and marijuana…. There seems to be a thought process that they have to regulate the cannabidiol business and combine (it) with the THC business.”

Crawford has heard similar rumours.

“It’s our understanding that they’re wanting to treat the cannabis plant as a single entity. Whatever you do for marijuana it applies to hemp,” he said.

“We (the hemp trade) don’t want that for a whole bunch of reasons.”

The CHTA is a relatively small group, so it’s looking for allies who may have influence in Ottawa.

Crawford said Alberta Agriculture Minister Oneil Carlier has provided a letter of support, and the alliance has reached out to agriculture ministers in Manitoba and Saskatchewan for similar help.

Crawford also sent a letter to federal Health Minister Jane Philpott in the spring but hasn’t heard back yet.

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