The CBD market dominates the industry as the American government legalizes hemp production in that country
Denver, in late March, hosted the NOCO Hemp Expo.
The event began six years ago and about 300 people attended the trade show in 2013.
This year, the event attracted more than 10,000 people
“There are 50,000 uses for industrial hemp,” Elizabeth Knight, one of the organizers, told 9NEWS in Denver. “From clothing to paper, all kinds of materials for building, for insulation, for animal feed and fuel for nutritional items.”
There may be 50,000 uses for hemp but in reality there was only one topic of conversation at the NOCO Hemp Expo — CBD.
Cannabidiol is a compound found in the leaves and flowers of industrial hemp plants. Some studies suggest CBD provides pain relief, has anti-inflammatory properties and may help combat anxiety.
Jeff Kostuik, director of operations for central Canada, the United States and international markets with Hemp Production Services, a Canadian company, was at the hemp expo in Denver. The company promoted its food ingredient solutions at NOCO, but most of the 10,000 people were there to learn about CBD.
“That seems to be the majority of the focus, right now, in the U.S. (hemp industry),” he said. “In my opinion it’s the highest risk (market) but potentially the highest reward.”
The 2018 U.S. farm bill, which became law in December, legalized hemp cultivation in the U.S.
Farmers in a number of states, including North Dakota, have been growing hemp under pilot projects since 2014. There will still be state and federal restrictions on growing hemp, but U.S. farmers will have much more freedom to produce the crop.
Consequently, U.S. acres are expected to jump in 2019.
In 2017, American farmers seeded about 35,000 acres of industrial hemp. Kostuik, based on conversations with U.S. producers and industry reps, believes U.S. acres will hit 150,000 this year.
If the estimate is correct, American hemp acres will be nearly triple Canadian acres in 2018. Last year, Canadian farmers seeded about 56,000 acres of industrial hemp.
The U.S. production likely isn’t a huge threat to Canada’s hemp sector because Americans are focused on CBD and Canadians produce hemp grain for food.
“Which is a benefit to Canada, for sure, because that (hemp food) is our forte,” Kostuik said.
The excitement around hemp CBD and a human health market potentially worth billions is pulling U.S. farmers toward a different production model for hemp.
“I think the model they’re looking at is these individual plants, placed five feet apart. It’s (almost) a Christmas tree farm,” Kostuik said.
“They’re growing a lot of what I would call ‘strains’ … a term from the marijuana industry. It’s low-grade marijuana … that they are harvesting at a certain time so they remain compliant, so it’s not going over that 0.3 THC (level)…. They just keep monitoring, monitoring. When it gets close to what they call “hot,” then they harvest (leaves and flowers) at that time for CBD production.”
That means many hemp fields in the U.S. won’t be producing hemp grain because the varieties aren’t designed to produce seed.
The American emphasis on CBD is attracting a great deal of interest in hemp, which is positive for consumer awareness and the broader market for hemp products.
That should benefit Canada’s hemp sector but the CBD fervor is also attracting thousands of new entrants. Some of those new firms will be reputable and some will not.
“Because they (the U.S.) have basically … separated THC and CBD, anybody can essentially set up their own (CBD) extraction plant, whether it’s in their garage (or larger),” Kostuik said. “In Canada it has to go through a (licensing) process.”
As for hemp grain and production in Canada, acres have bounced around for the last four or five years.
Canadian farmers planted a record crop of 138,000 acres in 2017, hoping to cash in on strong hempseed demand in South Korea. But that market dried up when China starting selling hemp grain into Korea. Canadian growers seeded a much smaller crop in 2018 and acres this year could be static because of more competition in the hemp grain marketplace.
“There still is, probably, an overproduction of (hemp) grain in the world,” Kostuik said. “(Because) the Europeans and Chinese and et cetera, who have switched their industry focus from fibre to grain.”