For more than 20 years, advocates have promoted industrial hemp as a near-perfect crop for Canada’s farmers. A source of fibre for construction, plastics and textiles, not to mention the myriad food uses for its grain and oil, hemp’s potential is extraordinary. It has sparked interest and even excitement in the marketplace with promises of solid domestic growth and robust exports.
Then the reality hits home, like the 19 years of missed acreage targets and the numerous startups that have ultimately stumbled and fallen, all under the watchful eye of the Controlled Substances Act.
It’s enough to dampen the spirits of many hardy entrepreneurs, developers and farmers.
Keanan Stone isn’t one of those, however. She and her husband Reuben operate Valley Bio Ltd. near Cobden, Ont., and have been working on hemp since 2009, first as an alternative crop, and then in the hope for something more.
It was 2009 when Reuben first contacted Dr. Gord Scheifele, then at Ridgetown campus of the University of Guelph. Scheifele had been a long-time advocate of industrial hemp production in Ontario, dating back to the early 1990s, promoting it as an annually renewable source of fibre, suitable for textiles, animal bedding and stationery. He also worked to develop varieties, and took samples to exhibitions and fairs.
It was also 2009 when Reuben joined the Ontario Hemp Association (OHA) and grew a crop of hemp. That crop yielded well enough that he purchased the OHA breeding program that had originally belonged to Scheifele.
From there, Reuben and Keanan developed the program into UniSeeds Inc., a hemp genetics development and marketing business, owned and operated as a partnership with two other shareholders in the company — Céréla Inc. of St. Hugues, Que., and Centre de Criblage Marc Bercier in St. Isidore, Ont. Between the three shareholders, they’re producing a large share of the hemp seed grown in Eastern Canada.
“We work with food processors in Ontario and in Western Canada to sell the grain to go in various food products,” says Stone, adding that sometimes, it’s hard to keep pace with all of the different uses. “There are other industrial manufacturers that are starting to ramp things up in paints and stains made from hemp oil. There’s a lot going on in terms of developing the fibre market, where there’s a company in Quebec that makes insulation similar to pink fibreglass with a hemp mat made of the bast fibre. There are also people working with hempcrete in building houses.”
Change is coming
It’s important to differentiate the many distinct traits found in hemp. The plant can be broken down into two types of fibre — bast and hurd. The bast fibres are suited to the fibreglass-like insulation while hurd fibres give hempcrete its strength for use in construction. There are also examples of hemp being used in biocomposites, and for making plastics and car parts.
Hemp is still a niche crop in terms of acreage across Canada, especially measured against the juggernauts of corn and soybeans in the East, and canola and wheat in the West. Yet Keanan maintains times are changing, not only in Canada but around the world.
“Particularly with the United States, where they’re changing their regulations and allowing research programs through the universities and state departments of agriculture that have legalized hemp in those states,” Keanan says.
The law in the U.S. only changed in 2014 and progress isn’t what some might call rapid, as not all states have loosened their regulations. “But the work that’s being done there is really pushing the industry ahead quite quickly,” Keanan says. “We exported quite a bit of seed to the U.S. for planting this year, so we’re encouraged by the market growth.”
Growth in seed sales to New Zealand is expected too and the Stones are working with a food processor in Australia as well. They’re also working with the largest co-operative of hemp growers in Europe — Fédération Nationale des Producteurs de Chanvre (FNPC) — which has a long history of developing hemp products and using the hemp in different markets, all for fibre. It’s a small but dedicated market in Europe, and the Stones maintain there are signs of growth.
Food and fibre are also finding a kind of parity on the two sides of the Atlantic. In the past, North America’s focus for hemp was on food production while Europe’s was on fibre use. Today, there are signs that North America is working towards more of the fibre usage, while Europe has started showing interest in the food sector.
That points to another important evolution in the hemp trade — i.e. fibre versus food varieties. Kim Shukla, a professional agrologist and executive director of the Canadian Hemp Trade Alliance, cites the emergence of differentiated varieties as a significant change in the hemp industry in the past few years, allowing farmers to focus on food markets, where there’s less need for investment in processing equipment and infrastucture.
Another reality that’s hard to discount is that raw fibre can’t be moved more than about 100 km before the economics begin to run out. The alternative is to have primary processing close to the farm, with secondary and tertiary processing at a greater distance, but Shukla acknowledges such a solution leaves economies of scale to deal with, and that issue never disappears.
“For the fibre sector to take off to any great degree, there’s significant investment capital that’s required and producers would need to have the confidence there would be a market exclusively for the fibre,” says Shukla, who’s based in Manitoba. “So it’s a chicken-and-egg situation. Which comes first, and who’s prepared to take the risk?”
The other challenge is that not all fibres are created equal. Environmental conditions can affect the quality, as can different varieties, and not everyone wants the same kind of fibre.
“There’s a significant amount of research that needs to happen,” says Shukla. “We’re getting much closer to being able to characterize the fibre that’s required for the different specific markets, but there’s still a long way to go.”
Shukla also mentions a change in regulations and increasing demand in China and South Korea, but it’s all food-based.
As for the quality of hemp, Shukla maintains Canada is the preferred source for hemp, particularly food-grade varieties.
Of course the other hurdle is hemp’s association with marijuana. Granted, it’s the same species (Cannabis sativa L), yet the cultivation and end-use are considerably different. Hemp’s field density is closer to wheat, since it’s grown for the stalks and the seeds. Marijuana, by contrast, is grown with much lower populations to encourage bud and leaf growth.
As well, in order to be considered “industrial hemp,” the concentration of delta-9 tetrahydrocannabinol (THC) must be lower than 0.3 per cent.
Both Shukla and the Stones hope the legalization of marijuana in Canada will loosen restrictions on hemp.
“This year, they did make some adjustments to the industrial hemp regulations and the processes, which made it a little bit easier for the growers, and for new farmers to get involved, which was nice to see,” says Keanan.
In past, farmers were required to grow at least 10 acres, plus submit field maps with GPS co-ordinates, planting dates and seed varieties, all before planting. But Stone says that’s been changed in the past year: a grower can apply for a general license, which Health Canada will grant. Then they have 15 days from the time of planting to make their Declaration of Cultivation, including the acreage, maps, GPS co-ordinates and variety.
“There’s a significant amount of paperwork, and the markets are probably not as transparent as they would be for the corn or soybean market,” adds Shukla. “It’s really the need to bring the processors and the manufacturers and those who are contracting the crop together with the farmers. We’ve done a really good job of that in the West, but it’s really just starting in Eastern Canada.”
The West is also well ahead in marketing, processing and promotions. Shukla notes that western production has increased more steadily in Manitoba and Alberta, thanks in part to government support. There’s a willingness to look to the future and invest, albeit with some added funding.
“What we found is that there are certain regions where hemp can be grown quite successfully,” Shukla says, referring to the Gilbert Plains, Man. region, where hemp was rediscovered. “Their concept was that if they could have a co-operative there, it could grow enough acres that could sustain a fibre-processing facility.”
But there are also more western-based champions who commit to the cause of hemp production and are working to drive the market forward. Agencies and businesses such as the Composites Innovation Centre and Parkland Industrial Hemp Growers can provide valuable lessons. Yet Shukla points to the Stones as the only producer champions that she knows of for the hemp industry.
Not that different
The other bit of good news is that hemp is a relatively simple crop to grow. Planting, harvesting and soil management are no different than for most crops that are favoured in either Eastern or Western Canada. The Stones, for instance, use a seed drill to plant hemp and a combine to harvest it, with the big difference being that the crop must be harvested while there’s still a large amount of green tissue visible. Waiting for it to dry down like corn or soybeans will cause the fibres to bind like baler’s twine, making harvest very difficult.
In that sense, the Stones say growers who have experience with a higher-maintenance crop such as edible beans or identity preserved (IP) soybeans might find hemp an easier fit. The Stones themselves do a dual-purpose harvest where they’ll cut the top two or three feet off the plant for grain, then swathe it and bale it to get the stalks for fibre.
“Hemp can grow on almost any kind of land, but the more you put into the hemp crop, the more you get out of it,” says Reuben Stone, adding that some herbicides have been registered, with more on the way. “If you pay attention to it, give it fertilizer and take care of it, and help it out-compete the weeds early on, you can maximize your yield potential, both for grain and for fibre.”
“Give a Canadian producer a crop to grow and they’ll grow the hell out of it,” says Shukla. “That has never been a challenge for us, whether it’s something obscure such as ostrich or emu or something traditional like corn. The biggest challenge is in getting the infrastructure in place for processing, both fibre and food and, secondly, how to market the product.”
Quick facts about hemp in Canada
- Hemp industry began in 1998 (with the Industrial Hemp Regulations under the Controlled Drugs and Substances Act).
- Currently more than 100,000 acres of hemp grown across Canada.
- Canada is the world’s largest producer of food-grade hemp.
- Exported $146 million worth of hemp products in 2016.
- 1,200 jobs related to hemp production and processing in Canada.
- Processed hemp sales forecast to exceed $1.0 billion in value in the next seven years.
- No public safety issues in 19 years of production.
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