• Home  / 
  • News
  •  /  Could Hemp Be Canada’s Next Billion-Dollar Industry?

Could Hemp Be Canada’s Next Billion-Dollar Industry?

plants growing on piles of coins

Back in the 70’s, a group of researchers developed a product called canola that has become a popular item located on grocery store shelves everywhere. Now, canola has become a billion dollar industry for Canada, and they are hoping that hemp can do the same. Hemp is a very resourceful product that can be used in numerous different consumable items, like oils, clothing and many other products.

Primarily grown in the three Prairie Provinces, growing industrial hemp had been difficult. Anyone who had an interest in growing hemp had to undergo a criminal background check, due to it being a regulated product. Although it contains no THC, it does contain CBD, which was only recently legalized. For years, the harvesting process was very strict and regulated where only the seeds and stems could be harvested. Farmers had to leave the parts that contained CBD (the leaves, buds, and flowers) behind in the fields.

Fortunately for hemp farmers, the government changed their stance. In August, with the Cannabis Act getting closer to passing, the federal government lessened their regulations towards the harvesting process for industrial hemp. The whole plant can now be harvested with the intent of CBD extraction and sale through a licensed marijuana producer.

Danny Feildberg who not only grows industrial hemp on his certified organic farm also started Altiva Inc., with both his brother and father. Before legalization, Altiva Inc. was more focused on hemp-based “superfoods,” but now Fieldberg is excited for what other lines of business will open up.

“Now that cannabis is legal, we’ve been working with the CBD side. Because that is the immediate income generation that investors will put large capital investment into,” he said. “Our intention is to have Alberta be the hub for hemp production in the world.”

Alberta, Saskatchewan, and Manitoba make up the Prairie Provinces. This area is responsible for growing over 45,000 acres out of the 138,000 acres grown throughout Canada. Alberta, second behind Saskatchewan for producing hemp, had licensed over 325 producers to grow industrial hemp.

That number is expected to grow. The market for CBD products is expected to boom due in part for the medicinal benefits treating chronic pain, anxiety and even cancer to the influx of CBD infused consumer products. The options are endless, ranging from beverages to cosmetics to construction materials. Ted Haney, who is the executive director of the Canadian Hemp Trade Alliance, has stated that his office has received numerous calls from farmers who have no experience growing hemp but want to get in on the action. Haney mentioned that even though there is quite a bit of regulatory work that still needs to be done, growers are already partnering with some of the industry’s strongest. Early this year, one company, Canopy Growth Corp. has already partnered with a hemp processing facility outside Yorkton.

With a market that could reach up to $100 million in additional revenue, hemp farmers will still face some challenges. One of these challenges is just how difficult of a crop it is to harvest. Fieldberg compared running the stalk to running “baler twine through your combine” Another challenge, is the amount of CBD present in most crops. A crop could average only one to two percent CBD, leading to breeding programs that would hopefully raise the level per crop making it more profitable. The last hurdle will be being able to sell their crop. Right now, if a farmer is looking to sell their harvest for CBD extraction, they must ensure a contract in advance with a major cannabis company to purchase the product.

This is ultimately leading to an interesting development because now investors are hoping to bring more processing facilities to Alberta. For example, the Aurora Sun, a cannabis production facility, is being constructed in the city of Medicine Hat. The facility is set to open in 2019 and is expected to be the city’s largest employer, is hoping to bring a hemp processing facility to the region.

John Sookcheff, who is the director of business development at Invest Medicine Hat, hopes that investors will see that Medicine Hat is the perfect location for hemp processing due to all the crop production in the area.

There are some risks involved with hemp being a niche crop. There are a lot of questions that go along with that like regulation, supply among other things. But even with all these risks, there is a possibility for a high reward because the demand driven by consumers towards hemp products is likely to continue.

Click here to add a comment

Leave a comment: