But while there are more products on store shelves, more cultivars than ever before and high prices for the crop, demand for hemp has been mixed.

“I think the hemp industry (in Canada) is struggling,” said Calgary-based hemp consultant Russ Crawford.

A former president of the Canadian Hemp Trade Alliance (CHTA), Crawford added that while hemp is a viable and profitable crop compatible with Canadian agriculture, he thinks it has a stigma attached, as regulations by Health Canada have steered away prospective growers.

“There are some challenges, not the least of which its affiliation with cannabis,” he said. “It is still overseen by Health Canada and on that basis, there’s a certain amount of requirements for farmers and processors to be registered and licensed and checked and double-checked by Health Canada… Hemp is still struggling with reaching its full potential.”

Other high-priced crops and a relative lack of investment in market development were also cited by Crawford as challenges. Nevertheless, he anticipates a small increase in acres in Western Canada.

“It’s not going to be a huge jump, but it will be a modest increase,” he said.

Meanwhile, Manitoba-based hemp consultant Anndrea Hermann called the hemp industry in Western Canada “growing and prosperous,” citing its increased use as feed.

“We’ve seen a constant gain in the grain side. We have further gains in feed production with having more varieties listed now than ever,” she said, also citing the presence of new fibre processing facilities.

Hermann added that this year’s hemp harvest is critical as supply from previous years is tightening.

“We need more acres this year because what we’ve seen this year is all the organic grain that was grown in 2021 has already been spoken for and/or mostly processed by now,” she said. “It’s not like some years ago when we had such a huge glut (of conventional grain) that we can peel away at that glut for two years.”

As international markets open up to hemp, there will be demand for Canada’s crop, according to Hermann.

“Especially on the food side, Canada has really mastered a lot of the standard production and quality parameters that we’re not quite seeing yet out of the U.S.,” she said, adding that there is budding demand for building materials made of hemp.

“Once we have these manufacturing facilities that can transform this stock fibre, that’s going to increase the demand because we’re going to have more product and we’re going to have that product here in North America versus having to import that product from our colleagues in Europe,” Hermann added.

Clarence Shwaluk, director of farm operations for Manitoba Harvest Hemp Foods, said his company worked with 80 growers across the Prairies for last year’s harvest and currently has 60 under contract. The company also showcased its new products at the Natural Products Expo West in Anaheim, California last March.

“We introduced a number of new products (there). We’ll be doing some exclusive work with Whole Foods Market based in the U.S. for 90 days and then we’ll expand those products into additional markets,” Shwaluk said.

“Those products are more in line with using hemp as a baking ingredient or in smoothies. (They’re) an additional play on our protein product lines.”

Manitoba Harvest has also been collaborating on a project with Protein Industries Canada since last year, developing new pea and hemp varieties for use in food and ingredient processing with aims to increase protein content while improving starch content and texture.

Overall, Shwaluk seems optimistic about hemp’s standing in the markets.

“I think hemp is positioned well for the protein markets and hemp has some really good attributes as far as the nutritional side of things,” Shwaluk said. “We had a couple of good production years, but we’re going to be a little bit down on acres this year.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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In 2018, 41,200 acres were planted, according to Statistics Canada, but the total more than doubled the next year to 91,100. In 2020, that number went down to 53,000, but 2021 was projected for growth to 66,600 acres.

While that estimate is likely to fall short due to oversupply, weather-related issues and competition from high-priced commodities, there is still room for optimism for hemp growers.

“(The industry is) on the edge of turning,” said Kory Lulashnyk, general manager of Parkland Industrial Hemp Growers (PIHG) at Dauphin, Man. “There might be lower acreage currently in 2021, but 2022 and forward looks pretty promising for grain and fibre production.”

Hemp prices reached 80 cents/lb. in 2017 and 2018, but a surplus dropped the price of food grain hemp to 50 cents, according to Lulashnyk. Last spring, companies offered 70 to 75 cents/lb. — not enough to compete with high-priced crops.

Industrial hemp is from the same species of plant as cannabis, but the former must have less than a 0.3 per cent concentration of tetrahydrocannabinol (THC), the main psychoactive compound in cannabis, in the flowering heads and leaves.

Along with the use of its fibres for textiles, hemp’s seeds and their oil have found space on store shelves as health products.

“The grain market seems to be steady and increasing. Personally, I haven’t seen where the grain and the food use are increasing where they’re getting used as an ingredient for some of the bigger food processors and packagers,” Lulashnyk said.

“On the fibre side, we’ve probably seen a lot more inquiries this past year than in previous years. I’ve had inquiries to grow hemp for fibre pretty much across the country.”

Hemp production was first legalized in Canada back in 1998 but is still heavily regulated by Health Canada. In 2020, 1,269 industrial hemp licenses were issued by the federal government, including 582 in the Prairies, with 499 of those for cultivation.

Two of the cultivars PIHG created, Joey and Canda, combined for about 1,876 acres seeded in 2020.

“Here in the Parkland (region), it’s a little restricted as to what crops you can grow. Hemp offers a great choice for the crop rotation and, at the same time, it has a good cash return with a little bit…Herbicide and fungicide inputs are a lot lower,” Lulashnyk said.

Despite the hot and dry weather which has damaged crops and will limit their yields across Western Canada, PIHG’s 2021 crop is growing well.

“(The crop) looks good. It’s growing well. I think it doesn’t like a high amount of moisture and obviously we didn’t have that this spring,” Lulashnyk said. “We have to stay tuned to see how the flowering and the seed development go for the rest of the season.”

While more countries are starting to legalize the growing of hemp, adding competition for the Canadian product, Lulashnyk believes the industry will continue to grow.

“On the bigger picture, there will be a lot of opportunity when it comes to other countries having legalized hemp. Whether it’s selling seed into those places or selling the end products whether it’s the grain or the fibre into other countries that are now going to start processing.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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The $65 million facility is expected to process up to 20,000 tonnes of yellow field peas annually and will be the world’s only commercial-scale food-grade canola protein production facility. No figure for the plant’s canola processing capacity was provided.

The plant is to be operated by Merit Functional Foods, in a joint venture with Burcon NutraScience.

Merit Foods — whose leadership comes from Shaun Crew, Barry Tomiski and Ryan Bracken, formerly of Hemp Oil Canada, which was recently acquired by Tilray — is expected to invest up to $16 million into the facility.

Vancouver-based Burcon announced its partnership with the former Hemp Oil team last month, having already announced plans in May to build a joint-venture pea and canola protein plant at an unspecified site somewhere in Western Canada.

The plant is expected to employ up to 85 people and will be located somewhere outside Winnipeg, though officials with Burcon declined to specify where.

Merit said Monday it had already entered a purchase agreement for the land and plans to start construction this fall.

Unique to processing, the plant is expected produce a canola protein for human consumption using non-genetically-modified canola. It will be blended with pea protein to create Nutratein.

Burcon already processes and markets pea protein products under the names Peazazz and Peazac, along with canola protein products Supertein and Puratein, and Clarisoy soy proteins. In 2013 it commissioned and today operates its own protein isolate production plant in Winnipeg.

“As canola is rich in the essential amino acids that pea is deficient in, the combined blend delivers protein quality equal to or exceeding that of dairy, eggs or meat,” Burcon CEO Johann Tergesen said.

Nutratein is to come in two varieties: one for veggie burgers, the other suited for protein-fortified beverages such as almond milk or pea milk.

“The ability to blend our pea and canola proteins to create nutritionally unparalleled plant protein combinations, while preserving the highly desirable functional properties the proteins naturally possess, will give us a true competitive advantage,” Tergesen said.

The plant will contract with farmers to provide a reliable supply of peas and non-GMO canola, he said.

This is the second major pea processing operation announced recently for Manitoba, following Roquette’s announcement of a $400 million, 125,000-tonne-capacity plant near Portage la Prairie, due also to open in 2020.

— Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting. Includes files from Glacier FarmMedia Network staff.

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The hemp industry is experiencing somewhat of a boom as hemp products of all stripes enter mainstream consumer markets.

“Health Canada is running at least double the number of hemp license applications,” said Ted Haney, executive director of the Canadian Hemp Trade Alliance.

About 80,000 acres are slated to grow hemp, and will produce hemp hearts, hemp oil and livestock feed.

“The vast majority of hemp acres seeded and harvested will generate grain, mostly for human consumption,” said Haney.

Similar to barley produced for either malt or feed, hemp that does not meet food standards is reclassified and sold as livestock feed.

“The feed market is a support market, not the primary market, though it’s from the same product,” said Haney.

“It becomes feed if it’s off weight, or has colour issues, or sat in inventory for too long,” he explained. “Then it becomes reclassified.”

Haney also explained that producers make the decision to sell hemp seed for feed grain if they don’t want to wait for a scheduled food processor pickup.

“If they want to generate cash immediately, they move their inventory to the livestock market,” he said.

Human consumption drives most of the hemp market, due in no small part to the significant legal red tape that is involved in producing other hemp products. Hemp growers can also sell the product’s flowers and leaves to cannabis processors, who extract CBD oil.

“Legally, right now, CBD can only be sold by a licensed processor. That’s the only legal pathway,” said Haney.

Conventional hempseed is currently selling between 50 to 60 cents/lb., while its organic counterpart is between $1.25 and $1.60/lb.. Hemp fibre is between $100 and $150 per tonne, and biomass is around 40 cents/lb.

“This industry was built, from 1998 to 2018, by one revenue source, and that’s food,” said Haney.

In 2018, the hemp industry generated $96 million in exports, and $42 million in domestic sales, according to the CHTA.

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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The deal comes after the U.S. farm bill, which legalized commercial production of hemp in the country, opened access to a large market for Nanaimo, B.C.-based Tilray and its peers.

Winnipeg-based Manitoba Harvest, majority-owned by Compass Group Diversified Holdings, and Tilray will develop wellness products and hemp-based consumer food products.

Manitoba Harvest’s product lines include Hemp Hearts, Hemp Oil, Hemp Yeah granola and protein powder and Hemp Bliss milk, plus a new Hemp Yeah wellness bar the company said it plans to launch in North America this summer.

Hemp is a type of cannabis plant with no or extremely low concentrations of the psychoactive compound known as THC, the ingredient in marijuana associated with “high” feelings.

The cash and stock deal helps Tilray expand beyond the food category, including extracts giving access to a broad portfolio of products currently distributed in 16,000 stores across North America said analysts at Cowen and Co.

Tilray said the deal will bring Manitoba Harvest expertise in working with cannabinoids, including cannabidiol (CBD) while allowing Tilray to “accelerate” its expansion into the U.S. and Canadian markets for CBD products where legal.

Tilray will initially pay $277.5 million in cash and stock at the close of the deal, expected within the next 30 days. The remainder will be paid six months after closing and on achieving certain milestones.

Compass Diversified Holdings’ shares were also up three per cent at $16.15.

— Reporting for Reuters by Shanti S Nair in Bangalore. Includes files from Glacier FarmMedia Network staff.

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Canadian hemp farmers are only permitted to use certain parts, the stalk and seeds, of the plants they grow. As a result, the growers are missing out in the market, said Kim Shukla, executive director of the Canadian Hemp Trade Alliance (CHTA).

The Steinbach, Man.-based CHTA is pushing for reform on the regulations that control how much of the plant can be used, Shukla said, and she hopes a new government has the potential to bring change.

Industrial hemp plants contain low levels, about 0.3 per cent, of the psychoactive ingredient THC. Marijuana plants typically contain five per cent or more.

The parts of the plant that can’t be harvested also contain cannabinoids such as cannabidiol (CBD), which can treat schizophrenia, anxiety and post-traumatic stress disorder, according to Dr. Steve Laviolette of the University of Western Ontario.

“While we are struggling and fighting against these archaic regulations, other countries are beginning to really come on as powerhouses,” Shukla said.

There is a strong market demand for hemp, but the Canadian industry has struggled with its ability to process product and move it through the channel.

Shukla cited a 2013 fire at a major hemp processor as a setback. The processor wasn’t able to work at full capacity until 2014.

Next year’s hemp acreage in Canada will likely stay static at about 100,000 acres, she added.

“So we can begin to manage some of our processing challenges, and as more processors come on board, and as more folks are involved in the marketplace, we’re looking forward to 2017.”

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

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It’s a demand becoming tougher to fill, according to an industry expert, as the general public becomes increasingly interested in the plant.

“You talk about canola being the miracle crop? Well, hemp has even more uses,” said Kim Shukla of the Canadian Hemp Trade Alliance at Steinbach, Man.

Smoothies, cereals, milk, salad dressing and biodiesel are just some of the uses customers have come up with, with most of the demand coming from the U.S.

Protein powder is another common hemp product, she said, but where in the past it was aimed exclusively at the bodybuilding market, now it’s directed towards the general public.

“That’s where we’re seeing it, in the smoothie market for people’s breakfasts.”

Canada’s crop this year is expected to measure 100,000 acres, about the same size as last year’s.

According to Shukla, the 2015 crop looks like a typical one despite some periods of excess dryness in Alberta.

The industry generally considers “decent” yields to be between 750 to 1,000 pounds an acre. Those numbers were reached last year and Shukla said she believes they’ll hit them again this year.

“We’re expecting decent yields based on the reports back,” she said.

The majority of the acres have been sold, though, with Shukla estimating 90 per cent have been contracted to five key processors across the country.

“There’s no way we can meet market demand at this point in time. We’re always looking for more processors to address that market demand that exists.”

According to Shukla the average price for hemp right now is between 65 to 85 cents per pound, which is about the same level as last year.

“Farmers are quite happy with the return they’re receiving,” she said.

Organic acres continue to demand the top end of that price range, due to customer demand.

Producers are about a third to halfway finished harvest, Shukla said. However, excess moisture has been a problem.

“In Saskatchewan I talked to one producer who told me the crop was 25 per cent moisture and he was looking for 15 per cent moisture.”

That farmer, she said, is waiting for the moisture to decline and won’t likely start harvesting for another seven to 10 days.

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

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