Canada: Hemp Industry-In-Progress
After several years of field research and lobbying, Canada developed regulations for the cultivation and processing of industrial hemp in 1998.
The government's move to join the world hemp community was prompted by lobbying on the part of the agricultural and business community, pressure from within caucus and a wave of hemp populism from across the country.
The 1998 hemp decision was seen as a political dream: "win win" for everyone. There was very little opposition to the idea of industrial hemp: the biggest obstacle was government foot-dragging on the issue.
Alan Rock, Health Minister at the time (and minister in charge of the hemp office) said, "This new crop has a tremendous potential for creating new jobs in agriculture, industry, research and retail."
Great expectations were raised then. However, many cautioned that it would take many years for the crop to be established.
Now five years in, many these expectations have not been met and the cautious have been vindicated. The growth of the hemp sector has been modest and hemp has proven not to be immune to the struggles typical of any new industry.
Last year (2002), comparatively very little industrial hemp was grown across the country. According to Health Canada, Canadas licensing body for hemp (Canada has a licensing regime similar to the European Union), 1530 hectares were licensed. In the modern history of hemp cultivation in Canada, this represented a small increase from 2001, which had the smallest crop on record, 1300 h.
(Planting for previous years: 1998: 2200 h, 1999: 13, 000 h., 2000: 5,500 h.).
The outlook for 2003 is much better. Last year's drought has led to very little inventory this winter. Growing markets will also help drive production. Most production will be concentrated in the Canadian west, notably Manitoba and Saskatchewan.
At this point, most hemp production in Canada is for hemp grain. Fiber production is limited and has been concentrated in Ontario where there are two processing plants: Kenex of Chatham and Hempline of Delaware. Both companies process the valuable long fibers for advanced new uses, such as automotive composites and building materials. High quality stable bedding is a by product.
Out west, the Prairie provinces have concentrated on hemp grain production and processing. This is instep with the regions history with other oilseeds. A lack of hemp fiber processing capabilities in the west has thwarted other kinds of development.
Fiber processing in Canada faces many challenges including technology shortcomings, insufficient financing and unfamiliarity with markets.
The fiber situation is slowly improving. An Ontario company, Wellington Polymer, has also been using hemp fibers as a component in making eco-friendly roofing shingles. In Manitoba, Erosioncontrolblankets.com has started manufacturing and marketing Rolled Erosion Control Products (RECPs) made from straw, coir and locally grown industrial hemp. The company needs a steady supply of machined-shortened hemp fibers to engage in this kind of production on a regular basis.
Also in Manitoba, the Dauphin-based Parkland Industrial Hemp Growers Co-op have plans for a $15 million CDN fiber processing facility. The 200 member strong co-operative, with members drawn across the Prairies, have been working on this development since the spring of 2000. Their proposed facility tooled with technology developed by the Biocomposite Centre at the University of Bangor, Wales - -- will process hemp fibers for the horticulture matting, insulation, and the paper/cardboard recycling industry. With technology available and purchase orders in hand, the co-op hopes to be able to complete financing and start construction this year.
The Dauphin initiative holds extra significance because it involves the core of farmers who were once contracted by the American-based Consolidated Growers and Processors (CGP). During their short corporate existence, CGP was widely criticized for growing significant acreages of hemp without evidence of markets: the companys bankruptcy in 2000 was a blow against establishing hemps credibility as a new crop.
Limited fiber research for pulping and papermaking is also underway, notably at the Alberta Research Council. Canadas Domtar experimented with a hemp-content paper, importing European made pulp to do so, discontinued the line because of high costs.
The Canadian textile sector, dominated by wool and cotton processors, has not embraced hemp. The industry itself is shrinking, as production is shifting offshore in search of lower production costs. Low margins in the Canadian textile industry mean there is limited means to innovate. While some modest experimenting has been done with processing Canadian-grown hemp in smaller Quebec mills, this has not yet become commercial scale. Canadian textile companies working with hemp such as HempTown Clothing Company, Great Canadian Hemp Company, Spiritstream, Mad River Clothing Company etc.- -- continue to import yarns and fabric from foreign sources.
Analysts say that one of the major constraints towards the use of natural fibers in Canadian industry is a general lack of knowledge, vision and will on the part of the private sector, farmers, government and academics to take advantage of the opportunities available.
While shortcomings of the fiber infrastructure have slowed the growth of the hemp industry, overproduction of hemp grain has contributed to smaller acreage in recent years.
Much of the overproduction is attributable to the ambitions of the now-departed CGP. A real problem of "too much too soon." However, overproduction is not a unique-to-hemp problem. Observers of New Crops note that boom or bust scenarios are distressingly common: alternative crops such as Echinacea, ginseng and borage have also experienced similar growing pains.
However, the recent downturn in hemp cultivation is buoyed by a steady increase in the processing of hemp, and the development of many small businesses who are developing new products or engaged in marketing work. None of the major players in Canadas Agrifood sector have displayed much interest in hemp yet so the field is wide open to entrepreneurs and visionaries.
There are many Canadian companies -- including Hempola Valley Farms, Fresh Hemp Foods, Ruths Hemp Foods, HMG Sales and Marketing, Hemp Oil Canada, Cool Hemp, Natures Path, Honeybar, among others -- working with hemp foods. This is very competitive marketplace. Many of these companies have strong regional distribution, but there is no clear national market leader
While hemp foods are not for everyone, a growing number of customers enjoy these products and are very loyal to them. Companies in the sector are reporting good growth. A visit to the health food store or surf on the internet confirms that more hemp is reaching the markets.
One trend worth noting is that much of the hemp food industry has switched to certified organic production because of strong demand. It is estimated that between 1/3 of Canada hemp grain production is certified organic.
Other markets for hemp grain still need to be opened up. One opportunity for hempseed may be in the feed market the fastest growing sector of the Canadian farm economy. However, more research needs to be done. Industrial oils and applications also need to be developed. There is some work beginning on this front.
Bioethanol is another avenue of development. As Canada has signed on to the Kyoto Accord on Climate Change, the country is starting to investigate alternative and greener forms of energy. Hemp might play a very valuable role here, especially if research into using biomass-for-ethanol production continues.
While Canadas hemp industry started out with expensive European strains of seed, Canadian-bred cultivars are now making it to the seed markets. Ontarios Industrial Hemp Seed Development Company developed the first three Canadian grown cultivars. The Western Canadian company Nutris made another cultivar available this year.
In general, the emphasis on seed production to date has been seed with good Essential Fatty Acid profiles with higher GLA, shorter stature, seed yield, and to a lesser degree, low THC.
Interestingly, the federal agriculture ministry has been collecting feral hemp seeds, and have initiated a number of research trials involving these heritage finds. The potential here is very intriguing.
Health Canada is in the midst of review of the Industrial Hemp Program and will be developing amendments to the existing regulations. The sense from coast-to-coast is the regulations so work to help increase ensure quality, but could be made to work better.
The regulatory situation in Canada is in stark contrast to the situation in the USA. American authorities have been unsure of how to deal with hemp since Canada started growing the crop in 1998 and exporting product to the large US market. Since then, there have been many events, policy changes and reversals south of the border which have disrupted the growth of this industry.
Currently, the debate about hemp in the US concerns trace THC content in hempfoods. This past year, a number of companies from both sides of the border filed a joint court challenge to confusing new rules being passed down in the USA by the Drug Enforcement Administration. Canadian company Kenex has also filed a NAFTA Chapter 11 suit, a provision in our free trade deal which allows private companies to sue national governments. The outcome is uncertain, but it is likely that there will be no comfortable resolution for some time..
Another dynamic to consider is Canadas increasing liberalization of cannabis to extend towards medical uses. The decriminalization of marijuana for personal use is also being tossed around. In Canada this trend will lead, eventually, to a lightening up of Canadas industrial hemp regulations.
However, from a foreign policy perspective, such liberalization throws salsa at the face of the American DEA. Now unlike their southern neighbors, Canadians have agreed to distinguish between "rope" (hemp) and "dope" (marijuana). In the US, the DEA believes in making no distinctions, so continues to confuse the issue with such statements as: " "Hemp" is part of the cannabis plant, which is also known as marijuana" and " "Hemp" and marijuana are actually separate parts of the species of plant known as cannabis."
It's unknown as to whether American authorities will clamp down harder on the hemp trade because of Canadas marijuana liberalization. If recent statements by John Walters of the ONDCP threatening tougher border controls are more than empty threats, then there will be some blow black.
Of course, rhetoric is a big part of politics, and no one in Canadas hemp sector is planning on the worst case scenarios. Like farmers everywhere, the industry is determinedly optimistic. Hemp is always in next year country.
Thoughts for developing this industry
Unlike south of the border, there is no organized opposition towards hemp in Canada; the country offers a supportive political and social environment to grow hemp and to develop hemp-based industries.
But there are many issues that need to be handled.
Marketers comment that more consumer education as to the benefits of hemp products is needed. Industry needs more technical data to make informed decisions regarding hemp; for fiber industries, steady supply is also an issue. Technology gaps need to be closed and market opportunities have to be clearly identified. Agriculture is also viewed as a poor investment climate, so capital has not come to hemp as quickly as the industry has liked.
So how is it all going to play out? Here's one five-year vision for Hemp in 2008:
Increased clinical research on hempseed will help mark hemp as an important contributor to human health and vitality. THC content will become a non issue. Someone will have built a hemp/nonwood fiber mill pulp mill in western Canada. There will be half-a-dozen hemp fiber processing facilities operating across the country. An ethanol-from-cellulose plant will be constructed in western Canada that will have hemp as one of its feedstocks. With fiber production kicking in, hemp acreage will hit 100,000 acres a 3300% increase from 2002 levels! While this vision is relatively modest compared to many other forecasts, this is still a very ambitious scenario (3300 % growth?), and calls for a LOT of growth and change. To get there Canadas hemp sector has many rivers to cross, and many bridges to build along the way. And while hemp will still be illegal to grow in the United States by 2008, more and more American companies and individuals will be involved in creating opportunities with hemp in Canada. They will be investors, partners, distributors, marketers, researchers they will be playing many roles. And as the American participation and investment in hemp in Canada deepens, only then will regulators will take a serious look at legalizing hemp in the United States.
Arthur Hanks has been researching and writing about hemp in Canada since 1997; currently he is manager of the Saskatchewan Hemp Association and the editor in chief of The Hemp Report.