Canadian Hemp Overview: May 2006
Canada developed regulations for the cultivation and processing of industrial hemp in 1998. Alan Rock, health minister at the time (whose ministry remains in charge of licensing hemp), said, “This new crop has a tremendous potential for creating new jobs in agriculture, industry, research and retail.”
Size of Production
At this point, most hemp production in Canada is for seed or grain destined for the North American health food/natural bodycare market. Field production fluctuated in the early years, experiencing a peak of close to 1,400 h. in 1999, and falling to a low of 1,300 h. in 2001. Since 2002, field production has consistently risen, and by 2005, 9,725 h. were licensed. Production trends have followed the growth of the consumer market. Most production is now centered in the prairie provinces: licensed acres in 2005 include Manitoba’s 5,000 h, Saskatchewan’s 3,400 h. and Alberta’s 916 h, 85 percent of Canadian production. Acreage could be over 15,000 h in 2006.
The markets for hemp are growing, driving a steady increase in the cultivation and processing of hemp with the corresponding development of many new businesses, new products and marketing initiatives. The Canadian Hemp Trade Alliance, established in 2003 to better represent the sector, currently represents over 80 businesses in Canada. It is estimated that the hemp sector has directly created 100-150 new jobs in the country, as well as contributing to the profitability and expansion of existing businesses and giving farmers a valuable crop choice.
Hemp Seed Markets
Hemp seed attracts interest because of high protein and fibre content as well as a strong essential fatty acid profile. Most of the market is in health food, nutraceuticals, supplements and natural bodycare. The expansion of hemp markets has trended with the growth of the global organic and natural foods markets. As a niche product not found in many grocery stores it has been difficult to measure and track hemp sales. However, a recent 2005 SPINS report (SPINS.com) estimated that the U.S. market for hemp foods in select stores had grown 49.9 percent over 2004-2005 to reach (at least) $5.1 U.S. million. Based on voluntary company reporting, this represents about half of the total market. Additionally, the market for natural bodycare products using hemp oil as an ingredient is estimated to be at least $10.9 million, representing a 15 percent growth over 2004-2005.
Currently, much of the hemp marketplace is in the U.S. As the U.S. does not permit hemp farming, there is a large captive market for Canadian production south of the border. Much of the American market is in the large, natural-food conscious California market.
Hemp has been sold into the international birdseed market but faces stiff competition from cheaper overseas sources and other seed crops. The potential for domestic pet/vet markets is very promising; as well, the potential for feed (cattle, fish) is significant. Both remain underdeveloped and hemp seed is not yet approved as an animal feed in Canada.
Any new crop can take between 15-50 years for markets to mature, as seen historically with such crops as canola and buckwheat.
Hemp Fibre
There is great interest nationally in fibre uses; however fibre production opportunities are closely tied to processing capabilities. These are very limited. Interesting markets under development include nonwovens, composites and animal bedding. Canadian pulped and made hemp-content paper is under research and development. Garment textiles represent a particularly challenging scenario – there is yet no “Dirt to Shirt” production in Canada – though it remains a goal of some companies. Much work is happening on all levels across the country to make the fibre side of the hemp equation work.
A rising demand for alternatives to wood and synthetic fibres in a variety of industries points towards hemp’s potential. As well, the rising prices of fossil fuels, used to make synthetic fibres, are helping make hemp fibre much more competitive in the marketplace. In general, fibre processing in Canada faces such hurdles as: technology and infrastructure shortcomings, insufficient financing and unfamiliarity with end markets. Analysts have concluded that the major constraints on 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 researchers to take advantage of the opportunities available.