The Canadian Industrial Hemp Promotion Research Agency has been in the works for years, with a vision to create an organization to spearhead public outreach, bolster hemp’s image and consumer recognition and be a hub for research.

“I think it was about 10 years ago that we started investigating how to get the research and promotion agency set up,” said Don Dewar, a Dauphin-area farmer who will serve as the board chair.

The agency was launched Oct. 25 and was highlighted Nov. 11-14 during the Canadian Hemp Trade Alliance conference in Montreal.

Why it matters: Canada’s hemp sector is seeking new and consistent markets that will help it grow past its current niche.

The new agency will operate on producer checkoffs. That money will be used for primary research, market development and creation of standards for better trade of hemp products. Clarence Shwaluk, board chair of the Canadian Hemp Trade Alliance, said check-off dollars will come from sales of all industrial hemp products in the country.

“It’s not a lot different than, say, the national pork levy or the beef check off,” he said. “The amount of funds collected will be one half of one per cent of all sales within Canada.

“That small amount will be collected by processors such as the one that I work for,” said Shwaluk, who works for Manitoba Harvest Hemp Foods. “It’s collected from the farmers by companies who are the primary buyers, and then the CIHPRA board will decide how that money is spent to promote the industry.”

Shwaluk said formal approval of the checkoff is a turning point for the hemp industry.

“What it will do is allow mobilization of funds for market development purposes. We do want to have the industry grow.”

The board of directors will consist of producers from across Canada.

Industry footprint

Hemp was legalized in Canada in 1998, and the Canadian Hemp Trade Alliance was founded soon after by several processors and hemp farmers.

It remains a niche crop. Canada planted 55,400 acres of hemp last year and produced more than 24,860 tonnes, according to Statistics Canada. That is equivalent to about 0.35 per cent of Canada’s soybean production, 0.33 per cent of Canada’s barley or 0.82 per cent of it’s oat production.

Of that, most comes from the Prairies. Alberta led the way last year with 20,000 acres, followed by Saskatchewan at 16,100 and Manitoba at 13,400 seeded acres. Quebec also produces the crop.

Hemp reached peak acres in 2019, shortly after cannabis legalization.

“There was a lot of excitement at the time about hemp being grown for extractions, for CBD,” Shwaluk said, citing the nutraceutical that many hoped would provide new marketing opportunities after hemp’s lucrative South Korean market evaporated.

Those hopes were muted following cannabis legalization, when processors ran into logistical issues around extraction and regulation and a learning curve that dampened the attraction of the new market.

“Those acres have dropped off significantly and what we’re left with is hemp grown primarily for food and fibre,” Shwaluk said.

Building crop promotion

The committee behind the new agency includes hemp producers from each province, as well as importers and exporters. The committee realized the project would have to be a national effort, Dewar noted. There weren’t enough hemp growers in any one province to fund a commission and Alberta is the only province with a provincial producers group dedicated to the crop.

Hemp producers were surveyed about the initiative preparatory to applying for a checkoff. That in itself was a challenge, Dewar noted, because privacy issues made it hard to find growers.

“I think we identified about 60 per cent of the growers,” he said. “Ninety per cent of those were in favour of putting the checkoff in place.”

First steps

The new agency expects to work closely with the Canadian Hemp Trade Alliance, said Dewar, especially on research projects. Researchers are now evaluating hemp for use in animal feed, for example.

“It has to go through some trials before we can say it’s safe for animals to eat it without the THC ending up in the meat or milk,” he said.

Hemp contains reduced levels of THC, the compound that causes the high when cannabis is consumed, but it is not THC-free. Canadian regulations state that THC levels in hemp can’t be more than 0.3 per cent.

The feed research is “very close to being finished,” Dewar noted.

Hemp’s role in rotations has also drawn interest. It’s long taproot can pull nutrients that are out of reach of other crops, and “it’s priced competitively to other high revenue crops like canola,” said Shwaluk.

The agency will now sort out its bylaws and finish the legal formalities of its creation before approaching hemp buyers.

“This is a very positive event for our industry,” said Shwaluk. “These checkoffs take a long time to come to fruition. Credit really goes to the people who had the vision to start this several years ago, and this will unlock a whole new set of funding to help promote and advance our industry.”

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Jeff Kostuik of Verve Seeds would like to see it get a better foothold, and he thinks new genetics, better tailored for western Canadian conditions and western Canadian markets, can help make that happen.

“We’re a very small, yet mighty company … we probably have one of the largest breeding programs in the world right now in hemp genetics,” he said, speaking at a field day at the Westman Agricultural Diversification Organization near Melita, Man.

Hemp has the blessing and curse of versatility. On the Prairies, its biggest market is food-grade grain, but the industry has also flagged growth opportunity in markets like fibre and nutraceuticals.

Fibre processors have dug niches in animal bedding and absorbent materials, but innovation-oriented organizations have said its uses could extend to sustainable construction materials. High quality fibre could feed into textiles. Grain can be crushed, yielding an oil with good nutritional properties.

There was initially great excitement around CBD (cannabidiol oil), but it was later dampened by logistical challenges.

That wealth of potential end uses, and corresponding demand for different varietal traits, is split between relatively few growers. According to Statistics Canada, about 54,60o acres of hemp were harvested nationwide in 2023.

Targeting grain

The sheer size of hemp plants has made it a harvest headache in the past, particularly to grain growers, for whom the extra vegetation is just more residue to potentially tangle up in the combine.

“Fibre varieties tend to produce more fibre but less seed, so it’s another challenge for the seed company,” Kostuik said. “So the breeding efforts have been to shorten the crop, get it so that it’s more manageable.”

Verve Seeds developed hemp with more uniformity in crop size, which Kostuik counts as a major breakthroughs in their program.

“We’ve got the varieties at the height that we want and now we’re working on yield and making sure that we’re not missing anything on quality assessment.”

A botanical quirk posed yet another problem. Hemp is dioecious; each plant is either male or female. In fibre production, that’s not a problem. For seed or grain, however, the males are wasted production space, taking up room and providing no harvestable material. A field population with greater numbers of females is a more profitable field.

To address this, Verve developed the world’s first dioecious hybrid hemp.

“It’s called T3H2006, but it’s more suited for Kentucky than here,” Kostuik said.“The objective in the hybridity is reduced maleness and we’re probably down to less than 10 per cent of the plants are male as opposed to 50 per cent. If we have more females than males, there should be a yield bump on that right away.”

That sounds like a good deal, according to Clarence Shwaluk of Manitoba Harvest, a company that specializes in developing and marketing hemp food products.

“We’re in the food business so we’re not interested in the big, tall varieties. We’re just looking for the seed,” he said. “What we want to get from a field that’s contracted to us is a good high-yielding variety, one that processes well for us and one that’s good for the consumer.”

Manitoba Harvest has contracted 800 to 1,000 acres of one such hopeful variety, Rak, this year.

“It’s experimental for us, but we’re looking for a variety that works at every level of the value chain,” Shwaluk said.

In an interview with the Western Producer earlier this year, Alberta Hemp Alliance consultant Russ Crawford said he hoped hybrid genetics might significantly improve western Canadian hemp.

Two of the three biggest issues with the crop are rooted in genetics, he said at the time: yield and seed consistency.

It is the industry’s hope that average production could jump from 700-1,000 pounds per acre to 1,300-1,500 pounds per acre. That would give producers more to sell, and might decrease hemp’s cost as an ingredient, making it more attractive for food companies, the Western Producer reported.

Verve Seeds was one of the companies selected by the alliance for hybrid development.

Processing

Shwaluk says Manitoba Harvest processes hemp in two ways. The first is dehulling hemp hearts, the soft and chewy centre of the hemp seed. The result is similar to the inside of a sunflower seed, with a soft, nutty flavour. Those hearts are typically used in salads, sauces or sprinkled on cereal.

“If you’ve seen hemp hearts in the grocery stores, if it has a Manitoba Harvest label, it came from us. We also do some private label, President’s Choice, Costco and there’s a few others that we do as well,” he said.

Hemp hearts make up about 80 per cent of its processing. The rest is crushing, which yields an omega-3 oil that is popular in specialty food stores.

“In addition to that, we also make granola with hemp in it,” Shwaluk said. “We also make our own line of oatmeal with hemp. We have a snack line ready for launch and we’re just getting into the dietary fibre. We’re utilizing the shell that, up till now, (was) a waste product, so we’re looking for multiple uses for the crop and trying to build that market and keep that growing.”

Growing hemp

The food company also has its own line of agronomists tasked with coaching producers who want to grow what is, for many, a novel crop.

“As soon as they sign that contract with us, the agronomist is working to look at soil rotations, what sort of fertility do you need? What sort of crop has been in the field prior and what sort of diseases might you expect?” Shwaluk said.

Hemp is considered an oilseed, and fits fairly well in the rotation for most Prairie growers, said Kostuik. Wheat can do well the year after it. Hemp is susceptible to sclerotinia, but so are other oilseeds a farmer might grow in that slot.

“On the insect side of things, cutworms can be an issue, and that seems to be the biggest one,” he said, adding the European corn borer can be another challenge. — With files from Robert Arnason

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That didn’t happen.

Instead, the committee of experts reviewing the Cannabis Act barely mentioned hemp in its 91 page report published March 21.

The Canadian Hemp Trade Alliance said the report fails to provide “meaningful guidance” on how Canada should manage and oversee hemp production and processing in the future.

“The expert committee … were focused virtually 100 per cent on public health and safety, protection of youth. And they had no expertise and no mandate to consider hemp,” said Ted Haney, president and chief executive officer of the CHTA.

“But they pretty much just kicked the ball down the court.”

CHTA chair Clarence Shwaluk made a similar comment.

He said the committee could have recommended changes to the Cannabis Act that would separate hemp from “drug regulations and removed obstacles to our industry’s growth and development.”

Health Canada has regulated the cultivation of hemp since hemp was first grown in Canada in the late 1990s, requiring farmers to get a license to grow the crop.

Initially, farmers accepted those constraints. But over the last 10 to 15 years, growers and hemp advocates have lobbied the federal government to de-regulate the crop and free it from Health Canada regulations.

In 2018, the federal government legalized the production and recreational use of cannabis. Folks in the hemp industry assumed that legalization of cannabis would help liberate hemp from the Health Canada regulations.

However, the federal focus on cannabis has created more problems, Haney said.

“Being regulated under Health Canada became more difficult after the legalization of cannabis,” he said.

“The focus of the structures … became all cannabis, all the time.”

One major obstacle for hemp is that some bureaucrats and policy makers in Ottawa did understand hemp and the opportunity for Canada’s agriculture and agri-food industry.

However, in the last five years or so, many of those bureaucrats retired or moved on to other opportunities, Haney said.

“We ended up with new officials … (with) very little expertise (and) very little knowledge of agriculture,” he said. “The mandates of Health Canada aren’t related to agronomy … variety approval, licensing, food safety.”

Hemp has been grown in Canada for about 25 years, but the industry has never lived up to its promise. In the 2010s, hemp leaders were predicting that acreage would hit 250,000 by 2018. That target was never reached as the industry went through several boom and bust cycles.

In the last few years, farmers have seeded 35,000 to 50,000 acres of hemp across Canada for the food industry or for fibre.

The expert committee report and the lack of recommendations to de-regulate hemp are a disappointment for Canada’s hemp sector, but Haney believes opportunities remain.

The report and the minimal mention of hemp in 91 pages illustrates that hemp has nothing to do with cannabis.

“They (Health Canada) convened a legislative review, the expert panel has been clear that hemp really isn’t related to their mandate. It doesn’t represent the kind of risks that Health Canada is adept at dealing with” Haney said.

The panel did make one recommendation regarding hemp, saying Health Canada and Agriculture Canada should create an expert advisory body to look at hemp regulations.

For Shwaluk, it’s obvious how that regulatory framework should be structured.

“The government of Canada must fully recognize that hemp is not adult use cannabis or medical cannabis and start treating hemp as a normal agricultural crop.”

—Robert Arnason writes for the Western Producer.

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This value-added research project was meant to identify hemp varieties to add to Health Canada’s list of approved cultivars. It was led by Canadian Rockies Hemp Corp. in collaboration with the University of Alberta, Canadian Hemp Trade Alliance, Alberta Hemp Alliance and Alberta Agriculture and Irrigation.

The project evaluated multiple types, as well as new varieties to Canada, to evaluate which varieties had the best field and processing results. For more information, visit the Alberta Seed Guide website.

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*The company began construction in 2019 and was ready to start processing about eight weeks ago.

“We ended up having about five months of extra additions to the plant to really get the throughput we wanted,” he said.

Canadian Rockies separates the hemp skin from the stalk, removing the fibre (bast) from the woody inner core (hurd). The fibre is processed into three different specifications for use in building materials, pulp and paper, and textiles. Screenings are sold for lower-end uses such as pellet fuel or cat litter.

The company processes 10,000 to 20,000 pounds of hemp a day. It has about 20 full-time employees and just started seven-day, 12-hour shifts.

“We’re hoping to go to a 24-hour shift by the end of April and we would be closer to 50 employees by then,” Barr said.

About 80 per cent of the products is exported to the United States.

The company contracts with growers within 150 kilometres of Bruderheim, including Athabasca, Lloydminster, Red Deer and Westlock. It had 25 growers in 2021 and 45 in 2022. It harvests the crop for the growers.

“This was our best year of growth yet on the fields. It wasn’t a total drought, not a total flood-out, it was what we consider a normal year. It’s nice to see average conditions on the field and we had some good yields. The farmers were all quite happy,” said Barr.

“We want to match our facility production with the number of growers we have so as we increase our plant production, we’ll contract more and more farmers. We’ve designed our plant to be able to process about 25,000 acres a year.

“In the past, we tried to go with more farmers doing smaller acres, to get comfortable with seeding hemp, and see how it goes.”

Barr said some growers started with 40 acres and are now growing 80.

“Now that farmers are comfortable with seeing the results of the crop and how it grows, we’re seeing farmers want to take on bigger field sizes. We’ll probably go with fewer farmers. We see it sitting very well with large grain farmers… They can seed more than they can harvest, because in our model you don’t have to harvest. There’s no combining, no bin drying, so those large grain farmers, this is where it fits with them. That’s where we are going to shift our focus.”

Barr said there’s increasing demand for sustainable biomaterials.

“With these big pushes coming out of Europe, which are now coming into Canada, people are thinking how to use more plant-based biomaterials and that’s why we’re seeing an increased demand. Now that we are able to establish a supply chain in Canada and North America, we’re seeing manufacturers have more confidence and be able to scale up hemp-based products.”

The consumer market

In Calgary, Hempalta is processing hemp into products for consumers.

General manager Brittany McKell said Hempalta buys hemp stalks, mostly from producers who have contracted with food manufacturers to grow the crop for seed.

The stalks are processed at the facility in Calgary and turned into products targeted for the high-end consumer goods market. Hempalta makes HempyCat, a high-absorption cat litter, HempZorb, a product for cleaning up spills, and Hempfreso, pads that can help prevent spoilage of fruits and vegetables. It also sells premium hemp animal bedding, which is used in the giraffe pen at the Calgary Zoo.

McKell said there are more than 25,000 commercial uses for industrial hemp and lots of opportunity for growth in the market.

“We are also looking to supply large volumes of our product streams to any other manufacturer who is looking to use hemp in their manufacturing, such as biofuel or biocomposites and textiles. If there is any other manufacturer who wants to use hemp in their formulation, we can supply it to them as well.

“Last year, a big portion of time was focused on rebranding a lot of products, refining our production co-ordination so we could understand what our supply needs were, and understanding our capabilities. The first year was getting us set up for a successful 2023.”

McKell said Hempalta buys hemp from southern Alberta farmers.

“We want to support our local markets as much as we can. Logistically, it’s a lot cheaper to source it if the farmer is in a three-hour radius from us.”

She said the company plans to scale up from processing one tonne of hemp an hour to four.

“We haven’t had any issues sourcing. There is plenty of hemp sitting out there. Starting this year, we’ll be able to contract a bunch of farmers.”

*Update: the year of construction was changed from 2021 to 2019.

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Hempalta Inc. and Livestock Water Recycling, both headquartered in Calgary, are two of eight ag-focused technology companies on the 2022 Foresight 50 list. The list is compiled annually by cleantech accelerator Foresight and is designed to attract investor attention for promising Canadian start-ups.

Hempalta is the smaller of the two in terms of sales, reporting 2022 revenues of $400,000.

In its pitch to be included on the list, the company pointed to strong and growing demand in North America for a wide range of industrial hemp products.

But most are imported, it said.

“At the heart of the problem is the lack of industrial hemp processing plants,” the company said. “While farmers are interested in growing the crop in many instances, specialized technologically advanced hemp processing facilities are needed to produce high-value products.”

Hempalta, which says it is one of only a few commercial-scale hemp processors in North America, makes consumer products such as hemp cat litter, animal bedding and HempZorb for cleaning up spills without chemicals. It also produces hurd, the woody inner parts of the hemp stalk, for hempcrete and is working on insulation made from hemp.

Livestock Water Recycling, which expected revenues to hit $16 million in 2022, has already attracted large-scale investment and bills itself as “the world’s leading provider of manure treatment technology.”

“LWR’s data-driven technology reduces manure volume and unlocks the exciting profit dynamics trapped inside storage lagoons by converting manure into two distinct, high-value fertilizers — concentrated biogas feedstock and recycled clean water,” the company said in its pitch to get on the Foresight list.

Its system employs both mechanical and chemical treatments to remove manure contaminants and separate fertilizer nutrients at large livestock operations. The company says its process produces potable water (manure is about three-quarters water) along with dry solids with high amounts of phosphorus and nitrogen, and “a concentrated stable ammonium and potassium liquid.”

The system can reduce a “manure footprint” by 75 per cent and eliminate odour at a feedlot or other livestock operation, it said.

Another ag company on the list is B.C.-based Farment BioSolutions, which uses naturally occurring bacteria with nitrogen-fixing capabilities along with fermentation to make nutrients, like manure, more efficient.

“We take organic wastes in different forms and by fermentation turn them into a biofertilizer,” said company official Ryan Klatt.

“We work with dairy farms and feedlots in B.C. and Alberta currently. But there are many different organic waste problems in need of a solution, like municipal wastes, for example.”

The company is also looking at ways it can help fish and insect farms deal with their organic waste streams like sludge in the bottom of fish tanks and frass, the manure produced by insects.

“Currently, fish waste is composted, so getting rid of it represents a cost to aquaculture businesses,” said Klatt. “Our long-term goal is not just to provide a better fertilizer that is rich in nitrogen, but we want to close the loop where we grow fish, and create a better fertilizer for land-based crops that provide feed for those fish. This would create a local supply chain.”

This is the second edition of the Foresight 50 list. Last year, companies named on the list went on to collectively raise almost $600 million in investment.

Other ag companies on the list are:

• B.C.-based Lucent Biosciences, developer of a smart micronutrient fertilizer called Soileos.
• Manitoba’s TheoryMesh that is building traceable and transparent food supply chains for sustainability and food safety.
• Psigryph Inc. from Guelph, Ont., that develops food tech for health, redefining how molecules with health benefits enter cells to improve plant and animal nutrition.
• Takachar of B.C. that turns crop and forest residue into higher value chemicals, biofuels and fertilizers in remote communities.
• Verdi from B.C., builder of a platform that lets growers build, manage and scale precision agriculture systems to deliver plant-level healthcare.

More about these companies and others on the Foresight 50 list is available online.

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One of those is Canadian Rockies Hemp, which just opened the largest hemp fibre processing plant in North America at Bruderheim. The company’s products are used for textiles, building, pulp and paper and bio-composites.

“We’ve invested over $20 million now in infrastructure, building harvesting equipment, building the actual facility, all the processing equipment, as well as a couple million in baled feedstock,” CEO Aaron Barr said in a mid-September interview.

“So our facility is built, and we actually have our engineers here from England as we speak, and we’ll actually be starting production next week.”

Another company, Phyto Organix, is on track to break ground on a $225-million pulse processing facility in Strathmore. The company is making headway on second-phase engineering and design, said Chris Theal, founder of the Calgary company. It is also in the process of securing its final round of equity financing.

“Our plan, really, is to have all that done and start moving dirt in Strathmore in the new year,” said Theal, an oil patch veteran. “We just got rezoning and subdivision approval. Our next big milestone is submitting foundation and development permits.

“Once you see earthmovers in Strathmore, it’s a continuous build for 22 months.”

As well, Lovingly Made Ingredients, the textured protein manufacturing division of British plant-based meat producer The Meatless Farm, is expanding production at its 33,000-square-foot Calgary facility.

“We were crazy enough to carry on launching a major project during the pandemic,” said general manager Chris Shields. “But we managed to hit project delivery on time.”

These three projects may be just the start, said Bill Greuel, CEO of Protein Industries Canada.

Demand for ingredients for plant-based food continues to soar, and in a dozen years, global sales will be measured in the hundreds of billions of dollars, he said.

As a large producer of ag commodities, Canada can own 10 per cent of the market if it seizes the opportunity, and Alberta could have a one-quarter to one-third of the country’s output, he said. That would require a huge jump in processing capacity over the next 10 to 15 years – enough capacity to process 1.5 million to two million tonnes of crops annually.

The groundwork is already being laid, said Greuel.

“A lot of companies in Alberta are developing new and novel ingredient processing technologies and are in the process of actively raising capital to construct facilities,” he said. “That’s tough work because the capital markets are tight. (But) they have good technology and good management teams. I think they’ll be successful.”

What it means on the farm

Anytime a producer can truck directly to a buyer and doesn’t have to rely on railways, “that’s a good day,” he said.

Pulse fractionation enterprises, which break whole pulses into protein, starch and fibre, are on track to join canola crushers as major buyers of prairie crops.

“I think the biggest thing the companies in Alberta are after today is protein extraction from yellow field peas,” said Greuel. “There are different ways that can be done.”

Once up and running, Phyto Organix expects to buy 40,000 tonnes of peas annually from local farmers. The company hopes for an output of 9,500 tonnes of protein isolate, 17,000 tonnes of starch, 3,000 tonnes of process fibre and 4,400 tonnes of pea hull fibre per year.

“That’s one of the things about our plant – call it the overall sustainability pedigree,” said Theal. “Eighty-six percent of what’s in a pea is human consumable.

“The residual, we call it fertilizer cake. That’s either got application in biogas or for regenerative farming and we are exploring both those avenues so there’s minimal waste.”

The range of uses for food ingredients is even wider.

Lovingly Made Ingredients’ end products are used in burgers, soup and cereal. The site currently employs 14 people three days a week but the recent expansion will see production increase.

The company anticipates using 4,000 tonnes of peas next year to produce 1,000 to 2,000 tonnes of ingredients, and that could rise.

“With the machine that we have, we can output about 6,000 tonnes a year,” said Shields.

Not just food

Industrial hemp is nothing new in Asia and Europe, said Barr. Much of the technology and processes being used at the Bruderheim plant have been adapted from countries with developed hemp markets. And the equipment has come “from all corners of the world,” he said.

But raw material – hemp stalks – must be close at hand.

“We contract farmers generally within a 150-kilometre radius of our facility, 40 minutes north of Edmonton,” said Barr.

Although few farmers have much experience with growing hemp, his company is lowering the barriers for newbies.

“In our model we’ve kind of coined the phrase, ‘seed, spray and walk away,’” he said. “We provide farmers with the growing seeds. They do any in-crop management if needed. And then we come in with our harvest crews and we do all the cutting and hauling.”

Cutting hemp stalks isn’t easy and Barr said the company designed its own harvest cutters, deploying six of them this year. Next year he hopes to have 15.

“We process sticks, so there’s not a lot of leaf matter or seed or flower in that,” he said. “We basically have two main products, fibre and hurd, which is that little wood chip. About 20 per cent of our production will be staying in Canada.”

According to The Business Research Company, a global market firm headquartered in London, the hemp fibre market is growing by 40 per cent annually and sales will hit $26 billion by 2026.

That’s tiny compared to demand for renewable diesel.

A new report from CoBank predicts production of green fuel in the U.S. alone will grow six-fold by 2030 to 6.5 billion gallons annually. That will require 17.9 million acres of soybeans, said CoBank, a major American ag lender.

On this side of the border, Imperial Oil’s refinery at Strathcona, on Edmonton’s outskirts, could be one of the largest producers of renewable diesel in the country.

The planned facility could produce around 20,000 barrels (more than three million litres) of renewable diesel per day by 2024, said Keri Scobie, public and government affairs manager at the refinery.

“We’ve been targeting the end of 2024 or early 2025,” she said. “We are going to be building this in our existing refinery footprint. There’s lots of dirt moving at the moment and it’s quite exciting. We are in the early stages of getting some of that space ready.”

Imperial Oil is also looking to leverage hydrogen produced during the process, with carbon capture and storage technology, to help Canada meet low-carbon fuel standards, said Scobie.

Renewable diesel can be used just like regular diesel, she said, noting there are some emissions associated with burning it.

“But it’s the process where we really see the benefits; the clean nature of that by using low carbon hydrogen with the feedstock,” she said. “The carbon is being captured underground, that happens at the Air Products’ facility, so it is a much cleaner process.

“When you think of it from a numbers perspective, it’s expected to realize about three million tonnes of emissions reductions in the transportation centre annually.”

The company is considering canola, soy and camelina oils as feedstocks but canola seems likely to lead the list, with industry officials predicting the renewable diesel sector will be a major consumer of the crop in coming years.

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At a crop demonstration in Manitoba this summer, he pulled apart a hemp stem and showed the hurd, the fibrous, almost woody core.

“This is the strong part, the super absorbent middle part of the plant. This was actually a byproduct seven years ago but it’s what’s driving the fibre market right now,” said Kostuik.

Hurd is used to make hempcrete for the construction industry. It’s a bio-composite material, almost like concrete, made from a hydrated lime binder mixed with processed hemp hurd fibre. The process starts by separating the hurd in the centre of the hemp plant from the ‘bark’ on the outside.

“The process of separating those two is called decortication,” Kostuik said. “The crop is laid on the ground, the microbes come in and eat the pectin and the lignin that hold these fibres together. Then it runs through a hammer mill, essentially, separating them.”

The fibre and lime are mixed and pressed into a hard block. These blocks can be stacked to make something similar to a cinder block wall. The material may also be mixed with less moisture to become a fibrous fluff that can be sprayed into a frame, almost like plaster.

Unique properties

“It’s like a thermal wall,” Kostuik said. “If the house gets flooded, once the water recedes, you don’t have to rip out all the drywall. The house just dries out.”

This is especially important in the southern U.S. states, where hempcrete is popular for building low income housing. The non-weight-bearing walls can be built with the blocks or sprayed in fluid form into a stud frame. It can also be used to restore older stone walls.

This has caused a sudden demand that many hemp growers can’t fill.

Many are servicing the market for CBD market (a cannabidiol that doesn’t contain THC) and farms producing CBD tend to be small operations requiring intense management.

“So you’ve got all these little 10-acre farms scattered throughout the U.S. and then the fibre market comes and they want all this fibre and they’ve got to deal with 100 of these 10-acre farms,” Kostuik said.

“They come up to Canada. We’ve got a grower just outside of Portage who’s growing 4,000 acres of hemp for a fibre one-stop shop and they’re very interested in what we’re doing here.”

Alberta a leader

Along with fibre and CBD, hemp is also grown for grain — and this versatility creates a challenge.

If hemp grain is desired, short plants are needed so a combine can handle it. For fibre, taller plants with lots of tissue are best.

“Hemp is a photoperiod sensitive crop,” Kostuik said. “We get more height and more vigorous growth out of a hemp crop the further north you go.”

Long summer days in the northern parts of the Prairies means hemp grown there will grow a lot taller than hemp grown in Kentucky.

Growers should identify the desired market before planting, he said.

“When you get to a plant stature of 16 to 17 feet, it can be a challenge to harvest it and you need specialized equipment at that point.”

The Europeans have equipment with dual-cut combines to harvest really tall plants. The header sits high enough to combine the hemp heads, while directing stems into a type of forage processor.

On the Prairies, tall plants may be good for fibre but not for grain because of the equipment. Cutting with a sickle mower or a disc bine could work, however, if it’s properly adjusted.

“Another issue, of course, has been the stability of those varieties,” Kostuik said. “In Canada we have a program where you have to purchase certified seed and one of the reasons is that hemp is a very strong pollinator. The pollen will flow and be dispersed for miles and miles and miles.”

Hemp should be treated like an oilseed in the rotation. It’s another host to sclerotinia but none has yet been seen in Canadian hemp fields.

“I’ve never seen a crop failure in Canada because of sclerotinia but I was at a presentation in Wisconsin and a guy showed me a picture of a complete disaster because of their higher humidity and moisture,” he said. “So never say never, is what I learned from that one.”

The bottom line is that there are new opportunities for hemp, which is good news for growers.

“I’ve been doing it for a long time and every year there’s ups and downs just like every other crop and market,” said Kostuik. “But once again, I kind of feel excited about what’s coming down the pipe for hemp.”

– This article was originally published at the Manitoba Co-operator.

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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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One is a $72-million hemp oil-processing operation to be built in a yet-to-be-determined location in southern Alberta while the other is a rare bird in the hemp sector — a facility that will process hemp fibres into bio-composites.

That second facility, which comes with a $75-million price tag, has a chosen site in Vegreville, customers (including Toyota and Winnebago) eager to buy its products, and expects to be in operation by 2024, said David Saltman, CEO of INCA Renewtech.

“The town was anxious to have our business,” Saltman said at a news conference announcing the two projects. “They have a town-owned industrial park that they are trying to develop, and we will be the cornerstone client. Land was a good value.

“Most importantly, it’s right on a CN Rail line. Although our hemp is coming in on flatbed trucks, we will ship some of the refined fibre down to our second factory in Bristol, Indiana, where we will make some of the composites for the recreational vehicle and automotive industries.”

While many people have long touted the potential for processing hurd (the core of the hemp plant) into industrial products, most current hemp production is focused on the grain side — specifically hemp oil, seeds and cannabidiol (also known as CBD).

Those are products produced by Blue Sky Hemp Ventures at its processing plant in Saskatoon. Its new Alberta facility will produce purified hemp seed oil, said company CEO Andrew Potter.

“We take the grain, we crush the oil out of it, and we put it through a heating process to purify it, to increase the smoke point,” said Potter. “It widens the applications we can use the oil for.”

Hemp oil typically has a very low smoke point (that is, the temperature at which it begins to give off smoke) and increasing that means it can be used in frying, he said. It can also be used in the cosmetics market, which is a high-value market for purified hemp seed oil.

Once the oil is crushed, hemp meal remains, and it contains a lot of protein, added Potter.

“We’ve developed a way to hydrate that meal and turn it into a high-concentrate protein product,” he said. “There are some hemp protein products on the market. What’s unique about this is that it has a much higher protein concentration, and a more neutral taste profile.

“It’s more attractive to ingredient buyers because it is easier to blend with other products. We’re very excited about the market potential for these foods.”

Construction of Blue Sky’s new Alberta plant is expected to finish in 2024 and, once open, to process 35,000 tonnes of hemp grain annually. Potter said the company is considering several locations in southern Alberta.

New products, high hopes

INCA Renewtech’s 200,000-square-foot processing and composites-manufacturing facility in Vegreville will be located near InnoTech Alberta, the province’s research facility for hemp composites, genomics and agronomics.

“The goal there is to create the right circumstances to grow dual-use crops,” said Saltman. “We want a hemp variety and hemp techniques where we can get our long, strong fibre and Andrew and Blue Sky Hemp Ventures can get a good seed yield. InnoTech played a very important role in that.”

Being on a main rail line and in a good hemp-growing area are also key, he said.

“It doesn’t make a lot of sense if you’re going to do a hemp-based business to transport those big thousand-pound bales very far,” said Saltman. “We really have to locate our factory within about a 150-kilometre radius of enough hemp being cultivated to feed our factories.”

The facility is expected to need 54,000 tonnes of hemp biomass annually. INCA Renewtech has a team of agronomists and will be encouraging farmers to plant dual-use hemp, said Saltman, adding the company will be contracting its hemp and will pay farmers in advance for fibre and seed.

“We are not only signing off on the agreements with farmers, but we want to remove the risk of planting hemp because in the past, a lot of farmers got burned when they were made promises and they had a lot of hemp in the fields,” said Saltman.

INCA Renewtech has also been working with the InnoTech facility in Edmonton to create a new product called BioBalsa — a lightweight, highly compressive material, which can be a direct replacement for balsa wood in the manufacture of products such as wind turbine blades and boats. This product will also be made in Vegreville.

“That’s a huge production line,” said Saltman. “That is a line that, at full capacity, will be able to create 60 million board feet of BioBalsa a year. We’re not only using the raw materials — we’re creating value added in Canada.”

The company will also be making “pre-pregs” — a combination of natural fibre and polymer that can be shipped to companies like Toyota and compressed into 3D parts.

“In your car today, your seat backs, package trays and headliners are all done with these kind of compression moulded materials,” he said. “We have a joint development agreement with Toyota to develop a brand new set of materials for their electric vehicle program and we have an agreement in place with Winnebago for the bio-panels.”

The company expects the Vegreville facility to be operational by the middle of 2024, and it will hire about 50 full-time workers along with about 20 seasonal workers to help with the harvest. It will handle all the fibre processing including decortication (separation of the outer fibre from the inner core of the hemp). The long bast fibre will be refined to meet certain specifications and will be sent to Bristol to be made into panels and plastics, said Saltman.

“For that product, you really have to locate your manufacturing close to your customers,” he said. “Even though these two factories are separated by 1,600 miles, they really function as a single integrated unit. That’s really important from a logistics standpoint.”

The two projects are getting a total of $900,000 in grants from the provincial and federal governments — and a lot of praise from the province’s ag minister.

“The two projects will transform the hemp industry by creating a new, vertically integrated market for hemp here,” Nate Horner said at the news conference. “This is just the beginning.”

The province currently accounts for about 40 per cent of Canadian hemp production and provincial government officials are working on 19 other hemp-related projects, he said.

“Hemp is already a multibillion-dollar (global) industry, and it continues to grow,” Horner said. “The Canadian Hemp Trade Alliance is projecting a $1-billion hemp industry in Canada by 2025 and Alberta is well positioned to capture more of the world’s global market share with high inputs, and strong research.”

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