National Industrial Hemp Strategy

National Industrial Hemp Strategy
Prepared for: Manitoba Agriculture, Food and Rural Initiative Agriculture and Agri-Food Canada

Contract Number: ARDI III B-27

March 30th, 2008

George Brook, Partner 293 Duncairn Ave. Ottawa, ON, Canada K1Z 7H1 Email: georgebrook@rogers.com Phone / Cell: 613-863-5119 Fax: 613-249-7064 TAG Project Team: George Brook, Kristopher Liljefors, David Brook,Andy Stewart

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Executive Summary
Growth of the Canadian Industrial Hemp Sector
The history of hemp cultivation is as old as the history of civilization. In North America, hemp was a crucial crop during the colonial period, and it continued to be produced right up to and through the Second World War. A combination of regulatory pressuresand changing public perceptions around drug use led to the disappearance of domestic hemp cultivation in North America in the years following WW II. In 1998, Canada joined the large international community of hemp producers by permitting the production of industrial hemp, under a carefully monitored regulatory process. While the growth of the Canadian industrial hemp sector over the past decade hasbeen uneven and at times fraught with challenges, as would be expected from a fledgling industry, there is considerable cause for optimism:

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The market for hemp seed materials for human health, nutrition, and personal care applications is strong and growing. Market price for a drum of conventionally grown hemp oil is approximately $1600 Cdn, with organic hem oil fetching inthe neighbourhood of $2500 a drum (Spring 2008). A favourable court decision in 2004 re-opened the US market, which had been effectively closed in 2000 by the US Drug Enforcement Agency (DEA). This has allowed for substantial and rapid gains in US exports. Recently, there has been dramatic growth in Canadian industrial hemp exports, with the US being the primary importer. Hemp seed exportsincreased 300% from 2006 to 2007. Hemp oil exports were also impressive, increasing 85%. Hemp fibre exports increased 65%. The knowledge base being developed by producers and researchers is expanding rapidly, with experienced farmers now consistently producing good yields. There is an increasing base of experienced organic producers meeting the strong market pull for organic hemp products, some of whomare now achieving yields that rival conventional farming techniques. Acreage under cultivation, while still showing significant annual fluctuations, is now regarded as being on a strong upward trend.

While the growth of the Canadian hemp sector over the past decade has been driven by market demand for hemp seed products, hemp has a broad range of potential product applications. The three primarycomponents of hemp – bast fibres, hurd, and seeds/oil each have attributes that provide distinct competitive advantages in a multitude of food and health, fibre, oils, and personal care applications. As technologies for hemp processing become commercialized and mature, there is reason to anticipate market penetration by hemp based products in such applications as biocomposites (includingbioplastics), textiles, and industrial oils.

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The National Industrial Hemp Strategy
Recognizing the need for concerted sector-wide approaches to overcoming roadblocks to expanded commercial production in the Canadian industrial hemp sector, Manitoba Agriculture, Food and Rural Initiatives (MAFRI), the Composites Innovation Centre (CIC) and theCanadian Hemp Trade Alliance (CHTA) have spearheaded the development of the first national industrial hemp strategy for Canada. Working with a broad cross-section of stakeholders representing producers, processors, researchers and research institutions, and the policy community, the goals of this National Industrial Hemp Strategy include:

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Aligning the value chain players towards...