Hemp has room to grow, but nowhere to go

PROCESSORS NEEDED Though seed and oil processing is established, the hemp industry needs 
fibre processing to really flourish

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The hemp industry in Alberta has potential, but is held back because of an incomplete value chain, says a recent report prepared on the emerging commodity.

The study by Serecon Management Consulting for Alberta Agriculture says there is a sustained and growing interest in hemp production and hemp products in Alberta. In 2010, Alberta trailed Saskatchewan and Manitoba in hemp production with 2,086 hectares, but moved to first place with 6,434 hectares in 2011. However, growth potential is limited by the lack of processing facilities, particularly for fibre. In 2010, hemp exports in the form of seed and oil were valued at over $10 million, with $8.5 million imported by the U.S. Only a small fraction of the exports were in the form of fibre.

The study notes several failed starts in the hemp-processing industry and attributes the lack of success in this area to undefined end markets, and an underdeveloped value chain for using both seed and fibre.

However, there are some bright spots on the horizon — Edmonton’s TTS Inc., has struck a partnership with the town of Drayton Valley and Weyerhaeuser to develop a non-matting woven line in an old wood plant, using equipment moved from a closed plant in Vancouver.

A hemp straw-processing plant in Emerson, Man. has been active for several years, and a second Manitoba fibre-processing plant is in the works. Other projects are in the research stage, some in conjunction with various levels of government. The study says the hemp industry in Europe is better established and the public’s current focus on sustainable, clean energy may help fuel the industry forward.

Banned in the U.S.

While Health Canada is content to merely monitor hemp production, the U.S. still insists on banning it entirely. It’s difficult to know with certainty whether the American situation helps or hinders Canada’s hemp industry, which needs a critical mass of seed and fibre demand.

If hemp growers become too gung-ho before the facilities or consumers are ready, the overproduction can cause such a severe correction that very little is grown the following season, which leaves processors short of product.

The study concludes that commitment is needed from all partners in the chain — producers, processors and researchers — to fully develop processing capabilities and market demand for hemp, and its myriad of proven and potential products.

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