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A Maritime Industrial Hemp Product Marketing Study

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A. Background

Industrial hemp, sometimes referred to as marijuana's misunderstood cousin, has less than 0.3% THC (the psycho-active ingredient) whereas the illegal crop has THC levels ranging much higher. Following a 60-year ban, it became legal to grow hemp in Canada on April 1, 1998, under license from Health Canada under Bill C8.

B. Study Objectives

The primary objective of the research is to gather statistical and market information on industrial hemp to provide:

C. Methodology

C.1 Data Collection

We conducted an extensive literature search and contacted knowledgeable industry participants and observers (a contact list is found in Appendix H).

C.2 Disclaimer

This study relied heavily on information from key contacts and reports that are publicly available. It depicts the Canadian hemp industry as of the writing of this report and to the best of our knowledge based on available information.

Considerable research, product and market development is underway that will address many of questions and issues raised within this paper. Readers are reminded hemp is in a dynamic stage of development. Which products and markets, if any, will ultimately prove to be commercially viable is still an open question. Many government agriculture personnel agree they have never before seen the level of hype surrounding a new crop as has occurred with industrial hemp, Cannabis sativa L. (hereafter referred to as simply hemp).

D. Hemp in North America: A Brief Look Over Time

E. Production

E.1 World Production

E.2 Canadian Production in 1998

Canadian hemp cultivation is in its fifth year with 1998 being the first for commercial licenses. Health Canada is in the process of compiling a complete list of commercial and research licenses issued in 1998. A report of licenses issued to the end of June 1998 is provided in Appendix A (see Exhibit 1). This information is found, along with license applications, at their websit (HTTP:// Our own research shows at least 5,300 acres have been planted under the research and commercial license issued this year (see Table1).

About a half dozen companies or consortiums account for the bulk of this production. As such, hemp production is concentrated in specific areas across Canada but is still composed mainly of small acreages. Maritime producers account for about 150 acres of the total while a half dozen other groups together planted over 80% of the total land area in Canada this year. Profiles of the key growers and processors in the Maritimes and the rest of Canada are found in Appendix B.

Table 1: 1998 Hemp Production in Canada

Prov. Known Research and Commercial Licenses Acres (1) Apparent Mkt
BC Granby Hemp Co-op (Grand Forks)
Transglobal Hemp Products Corp.(Vancouver Island)
WestHemp Cooperative BC (Lower Mainland)
Canadian Hemp Corp. (Contracts: BC, AB, SK)
Jack Dobb (Dawson Creek)
27 ac.
approx. 35 ac.
approx. 20 ac.
<1 ac. (research)
Grain, Fibre
AB 8-12 commercial growers
Chinook Applied Research Station (SE AB)
1 research license near Edmonton
150 ac.
20+ ac.
Unknown (research)
Primarily Grain (oil)
SK Western Growers Seed Corporation (mostly organic)
GenEx (several organic growers, Regina)
approx. 250+ ac.
40 ac.
Grain, Seed
MB Canterra Seeds Ltd. (Winnipeg, 15-20 growers)
Consolidated Growers & Processors (Winnipeg)
Prairie Hemp (40 growers, contracted to Hempola)
HempOil Canada Ltd. (St. Agathe)
approx. 200 ac.
pprox. 800+ ac.
approx. 500+ ac.
approx. 40 ac.
Grain, Fibre
ON Kenex Ltd. (Pain Court, 54 growers contracted)
Hempline Inc. (London, about 20 growers contracted)
Natural Hemphasis/Six Nations Reserve (Grand R.)
Approximately 30 others (various locations)
approx. 2,000+ ac.
approx. 500 ac
10 ac. (research)
approx. 300-500 ac.
Fibre, Grain, Seed
Fibre, Grain
Grain, Fibre
PQ Chanvre Esprit (Michael Gaudreau, organic prod'n)
Orverd (Sylvain Donvierre, Lac St. Jean)
Jerzy Prytyk, Ayers Cliff (assoc. w/GenEx in Regina)
20 ac.
25 ac.
20 ac.
Oil, Grain, Fibre, Seed
Grain (Oil & Food)
NB Dr. Chuck Schom (St. Andrews, plots widespread)
NB Department of Agriculture (Fredericton)
Canadian Hemp Company Ltd. (Fredericton)
Al Geddrey (Cambridge Narrows)
10 ac. (research)
<1 ac. (research)
84 ac. (64 contracted)
10 ac.
Fibre, Oil
NS New Century Farms (Billtown, Kings Co.)
Don Hunter (Pugwash area)
NS Department of Agriculture & Marketing (Truro)
11 ac.
13 ac.
<1 ac. (research)
Fibre initially
Fibre, Grain
PE Maurice Van Daele/Island Hemp Co. (Pt. Pleasant) 17 ac. (research) Fibre, Grain
NF No production 0 ac. -


approx. 5,300+ ac.

Note: (1) All acreages are estimates based upon personal reports and news reports available on the Internet.

F. Trade

F.1 World Exports

F.2 U.S. Imports & Exports

F.3 Canadian Imports and Exports

G. Economics

G.1 Value of Hemp Products

There are many uses for hemp as shown in Figure 1, but finished hemp products can be costly. This is to be expected given the cost of importing, manufacturing and its status among health-wise and enviro-conscious consumers. The following hemp prices were gathered from published reports and interviews.

Fibre for Textiles:



Certified Seed:

Other Contract Prices:


Body Care Products:

G.2 Costs of Production

We have provided two examples of estimated production costs in Appendix C for Manitoba and Kentucky (which sourced Canadian growers for some of the cost estimates).

Recent cost estimates suggest hemp has the potential to be a profitable crop. Estimates from Manitoba suggest hemp grain can be grown for about $245 to $300 per acre depending on yields of 300 and 500 lbs/ac, respectively (see Table C.1 in AppendixC).(4) This suggest the hempgrain must sell for at least 60¢ to 80¢/lb to break-even, depending on the yield.(5)

A recent University of Kentucky analysis estimated profits for fibre, grain, certified seed or fibre and grain could be in the order of US $316, $220, $606 and $319/ac respectively (see Table C.2 in Appendix C). These results suggest hemp producers would enjoy greater profits when compared with other US crops such as alfalfa, corn, barley or wheat (Table C.3).

Kenex Ltd. estimated net returns for fibre contract, fibre and grain contracts and cleaned grain (10% moisture) to be in the order of $337, $421 and $550/ac, respectively.

The cost of producing hemp under various Canadian conditions and management regimes will not be known until independent and methodologically similar studies have been completed.

Interested growers must ensure their own estimates are accurately calculated and include all relevant costs.

Basic agronomic information is presented in Appendix D of this report. Appendix E provides an overview of hemp processing techniques.

H. Investment in the Canadian Hemp Industry: Actions to Date

Despite claims by some observers that many government departments have adopted a "wait and see" attitude to industry support, there is evidence to the contrary. The following are examples of hemp research and development in Canada:

Clearly, there is government support for an industrial hemp industry in Canada. Hemp in North America is also supported by a diverse group of individuals and corporations. Supporters include farmers, non-agricultural businesses, scientists, unions (such as the Canadian Auto Workers), environmental advocates, financial institutions such as the Bank of Montreal(6) and marijuana advocates.

I. Analysis of Market Potential

I.1 Introduction

The markets for hemp products can only be described as developing. This industry is in its infancy, having lain dormant on the supply-side for 60 years. Despite increased imports into Canada in recent years, volumes of imported raw fibre and manufactured goods are small. Little is known of the extent of markets available for Maritime, or for that matter, Canadian hemp produced.

The existing North American market for hemp is estimated to fall between US $28 and $30 million with annual increases of $8 to $10 million. The global market for hemp is valued at between $100 and $200 million annually.(7)

Many of the independent growers with whom we spoke are quickly approaching harvesting dates yet have not secured markets for their crop. In some cases, they are unsure of how they will harvest and process the crop and are frequently unsure of the price they will receive for what they harvest. Maritime growers are for the most part seeking out the same local markets. This is in sharp contrast to some of the key Canadian players who have made inroads in establishing not only markets but also new and in some cases innovative methods of processing hemp fibre and manufacturing final goods.

In general terms, the demand for hemp products is expected to ride the wave of the growing market for environmentally and economically sustainable products through:

The following discussion presents our research findings and conclusions on major new and emerging hemp product markets. They include:

I.1.1 Oil

I.1.2 Health Foods

I.1.3 Textiles-Woven and Knitted

I.1.4 Textiles-Molded or Pressed

I.1.5 Pulp and Paper

I.1.6 Building Materials

I.1.7 Alcoholic Beverages

I.1.8 Livestock Feed

I.1.9 Livestock Bedding

I.1.10 Biomass Fuels

In summary then, the various markets for hemp products are developing and should generally be considered at an immature stage. The best example of a concrete opportunity for Maritime fibre (the focus of our growers) is expressed interest from Minas Pulp & Power. On a more general level, the oil, food and body care markets are said to growing and require less infrastructure investment than with fibre processing. Unfortunately, we must wait until at least 1999 before there are opportunities to rigorously test the suitability of available oilseed varieties to Maritime conditions.

We have prepared responses to a set of market potential questions that are based on the findings of this section. These are found in Table F.1 in Appendix F. A glossary of hemp industry terms has been provided in Appendix G. Appendix H lists the individuals contacted as part of the research for this study.

J. Overcoming the Obstacles to Growth

The results of the last section suggest a number of obstacles must be overcome before widespread development can occur in the Maritimes, or for that matter, the rest of Canada. These are described below.

J.1 Better Understanding of the Technological Hurdles

J.2 Access to Seed and Appropriate Varieties Developed for Local Conditions

J.3 Access to Information and Expertise

J.4 Biophysical Conditions

J.5 Competition

J.6 Markets and Marketing

J.7 Vertical Integration

J.8 Partnering

J.9 Price Uncertainty

J.10 Quality

J.11 Quantity

J.12 Regulatory Environment

J.13 Testing Facilities

K. Conclusions and Recommendations for Industry Direction

K.1 Conclusions

K.2 Recommendations


1. Industrial Hemp: Global Operations, Local Implications, July 1998, Valerie L. Vantreese, Department of Agricultural Economics, University of Kentucky.

2. Hemp Entrepreneurs and U.S. Public Policy: The 1996 Hemp Business Survey, July, 1996, John Gettman.

3. Kenex Ltd. is attempting to secure long-term growing contracts from farmers while pursuing long-term market contracts with buyers such as General Motors of Canada. They deduct the costs of management, harvesting, retting, baling, etc., from this price unless the grower assures responsibility for these activities.

4. In comparison, 1995 estimates for growing costs for hemp for fibre and hurds ranged from $268 to $285 per acre. Growing hemp for seed was estimated to cost $238 per acre. Source: Gordon Reichert, Market Analysis Division, Agriculture and Agri-Food Canada, 1996 Crop Budgets 1995, Publication #60, OMAFRA.

5. The net returns from growing hemp for fibre are estimated to be between $100 and $300/acre, depending on the growing region and the management practices. More accurate data is expected by January, 1999. Source: Mike Columbus, OMAFRA.

6. The Bank of Montreal has recently announced a Sponsored Advertising Program whereby they pay for advertising costs in Commercial Hemp Magazine. Companies must be in the start-up phase (less than one year). For more information, requests can be faxed to 604-662-8621 or e-mailed to (the publisher of the magazine).

7. Source: G. N. Chaudhary, Special Products Team of Alberta Agriculture, Food and Rural Development in Alberta Hemp Symposium Proceedings in Red Deer, (March 10) and Edmonton (April 8, 1998).

8. In 1996, Alcell Technologies, a subsidiary of Repap Enterprises, experimented with pulping both wheat straw and whole hemp stalks. Alcell Technologies Inc. is a patented process that pulps hardwood, annual fibres and agriculture residues. The process is said to result in product yields of 76% to 86%, compared with conventional pulping processes yielding 51%. Sale of the company put the project on hold. A news release posted March 2, 1998 at the Pacific Rim website indicated Malaspina Capital Ltd. was at the time negotiating with Repap Enterprises Ltd. to purchase shares in Alcell Technologies Inc. and stated there is enormous potential for the technology in Asia and other international markets. Currently, there is an idle demonstration plant at Atholville, New Brunswick.

9. We have been unable to confirm these reports with the company.

10. It is important to note corrugated cardboard does not require the same level of processing as that of higher grade papers produced by many of the other Maritime mills.

11. As found on the website for the Washington Hemp Education Network (WHEN) located at HTTP://

12. Tilby Systems Ltd., of Victoria, BC has a long history in sugarcane, kanaf and sweet sorghum fibre separation techniques. They are awaiting green hemp stalk to test the viability of using existing equipment to determine what modifications, if any, are needed for hemp. Another piece of machinery, The Tornado, marketed by Bolton-Emerson Americas Inc. of Massachusetts, has been developed to process non-wood fibres into papermaking material. While there are conflicting reports as to its effectiveness, the non-plugging machine is said to accommodate plants directly from the field and processes them into a homogenized fibre slurry by subjecting the fibre to repeated scissors-lime action thereby cutting the fibres into shorter lengths. Another piece of machinery, the Chaflin, then refines the pumpable slurry into papermaking stock. This has potential to eliminate the need to cook the slurry. For more information, visit their website at HTTP://

13. There are 26 approved cultivars in Canada for 1998. Kenex Ltd. has reported there is seed left over from this season as orders were reduced due to delays in licensing. Furthermore, seed prices are expected to fall by 10-15% in 1999.

14. For example, the following statement can be found on the Kenex Ltd. website: We have compiled a great deal of knowledge, expertise and technology at a very high cost over the last several years. Much of the information has been provided to the public at no charge but we hope you understand we must maintain some proprietary information in order to create a sustainable business.

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This page last updated on 18 April 1999.