RITA TRICHUR Hemp is fast becoming a staple of daytime TV as Oprah, Dr. Oz and others extol the health virtues of hemp oil, protein powders and pasta. At the same time, industrial interests tout it as a potential base for products ranging from textiles to car parts. As a result, demand is surging in the United States, Germany and Japan. But American farmers are prohibited from growing hemp. That leaves farmers in Canada – where it’s been a legal crop since 1998 – free to tap the growing U.S. interest in hemp-based products.

First, though, they must navigate the shifting sands of public opinion – or, as one Alberta report called it, “the snicker factor.”

According to an Alberta Agriculture Department report on industrial hemp production in Canada, the plant’s cultivation evokes chuckles “largely because of its hippy-dippy image and close association with marijuana, its consciousness-altering cousin.”

Nevertheless, this is serious stuff. The North American market for industrial hemp – which has only a minuscule amount of the chemical that gives marijuana its punch – is booming.

For centuries, hemp had been ubiquitous in global commerce – from paper making to the rope used on sailing vessels – until synthetic fibres usurped its naval role and global anti-drug sentiment put paid to the rest.

Now the market, while still small, is growing by about 10 per cent a year, with annual sales between $350-million and $400-million, according to some estimates.

Mike Fata, co-founder and chief executive officer of Winnipeg-based Manitoba Harvest Hemp Foods & Oils, believes Canada’s hemp industry has a golden opportunity – especially south of the border. Hemp-based foods, he notes, are rich sources of protein and essential fatty acids like Omega-3 and Omega-6.

“The great thing about marketing hemp is that hemp is in everyone’s psyche – whether they think that hemp is marijuana or they think that hemp is clothing or rope or they already know that hemp is a food product . . .” Mr. Fata said. “It is easy when you have their attention to educate them about what hemp really is and all the great things that it can offer.”

Canadian hemp exports have increased by 500 per cent over the past four years. Even so, total exports were worth just $10.38-million in 2010.

The industry’s goal is to generate more than $100-million for the Canadian economy by 2015, partly by boosting production from 10,855 hectares to 40,000 hectares over that time.

Eager to capitalize on that burgeoning potential, the federal government recently boosted its investment in the industry. In December, 2010, Agriculture Canada announced an investment of more than $728,000 to help the industry boost production capacity and increase exports to the United States. The amount was split among three funding streams – including some repayable contributions. Ottawa is also handing out more licences to grow the value-added crop and has increased the number of approved varieties for the 2011 growing season.

Canada’s hemp industry, though, is also grappling with some serious growing pains after years of boom-and-bust production. The high Canadian dollar is eroding the value of exports, and celebrity endorsements notwithstanding, hemp has yet to fully shake its “ditch weed” image with U.S. consumers and regulators.

Toward that end, Canadian hemp food products have yet to overcome a key regulatory hurdle with the U.S. Food and Drug Administration by achieving “GRAS” status, an acronym for Generally Recognized As Safe.

Without that certification, Canadian companies are prevented from selling hemp to big multinationals like General Mills and Kellogg’s, and another three years’ worth of costly study is required before the Canadian industry can even apply, says the Canadian Hemp Trade Alliance.

Mr. Fata of Manitoba Harvest says he recognizes those obstacles but is optimistic about the industry’s long-term potential.

Manitoba Harvest is one of the world’s largest hemp food manufacturers. Its sales growth has averaged about 50 per cent a year since 1998. It currently makes 68 per cent of its sales in the United States, 30 per cent in Canada and 2 per cent in Europe and Asia.

In addition to health food stores, it is penetrating mainstream grocery chains in the United States and collaborating with Maple Leaf Foods Inc. on hemp-based research and development in Canada. Manitoba Harvest has provided product and technical support to Maple Leaf’s majority-owned subsidiary Canada Bread as it experiments with hemp bakery products, Mr. Fata said.

While hemp foods continue to represent the bulk of the Canadian industry’s exports, there is also a growing appetite for hemp fibre for industrial uses. German auto maker Mercedes-Benz, for instance, has been using natural fibre such as hemp, flax, sisal and abaca for many years in various components.

With the price of cotton still high, albeit down from its peak, garment makers are also eyeing hemp as a substitute textile.

Vancouver-based Naturally Advanced Technologies Inc., established in 1998 as Hemptown Clothing Inc., is developing alternative fibres made out of flax and hemp. Its Crailar technology uses an enzyme process to remove lignin, the natural glue that binds fibres like flax and hemp. Doing so gives those fibres a smoother texture and allows them to be processed in new blended fabrics that can result in savings for clothing makers because they require less cotton and are less prone to shrinkage.

Earlier this year, Naturally Advanced signed purchasing and development agreements for its Crailar flax fibre product with apparel giants Hanes and Levi Strauss & Co., along with pulp-and-paper manufacturer Georgia-Pacific LLC.

Flax is cheaper for Naturally Advanced to process than hemp partly because it contains less lignin and also because it can be grown in the United States, where both its pilot facility and major partners are based.

“We’re not giving up on hemp. Hemp is just going to follow in or feed in after we lead off with flax,” CEO Ken Barker said.

Moreover, the company is also fielding enquires about its hemp fibre product from a range of other industries, including mattress makers and the medical sector.

Still, Mr. Barker recognizes that there remains a marketing challenge for hemp: “That’s just the reality of the U.S. consumer.”

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HEMP FACTS

- Possible uses include food, clothing, rope, cosmetics, building products, car parts

- Industrial hemp and marijuana are both members of the cannabis plant family, but hemp contains only tiny amounts of the drug delta-9 tetrahydrocannabinol (THC)

- Growing both marijuana and hemp became illegal in Canada in

1938. The ban on commercial hemp production was lifted 1998.

- As of June 21, 2011, Health Canada issued 296 licences to grow industrial hemp for the 2011 growing season. That’s up from 290 in 2010 and 184 in 2009. (Licences must be renewed each year.)

- There are 38 approved varieties of hemp for 2011, up from 34 in 2010 and 29 in 2009.

- A total of 3.98 million kilograms of hemp products worth $10.38-million were exported in 2010, up from 1.82 million kilograms worth $8.09-million in 2009.

Sources: Agriculture and Agri-Food Canada, Health Canada, Manitoba Agriculture, Statscan, Canadian Hemp Trade Alliance

“We made a few batches for sales in 1998 for the Boulder Creek Festival,” recalled Susan Squibb, the co-owner and president of Hemp Sources Inc. of Boulder. “It was kind of a proof of concept.”

Actually, Squibb’s husband, Agua Das, had been challenged to make ice cream out of hemp seeds, but what began as the couple hand-churning out some batches with the old rock salt and ice method has evolved into distribution stretching into nine states.
Michael Myers
Susan Squibb, co-owner and president of Hemp Sources Inc. of Boulder, displays Hemp I Scream — ice cream sandwiches made from hemp seeds. What started out as a product sold at local concerts is on track to be distributed in nine states.

Das, who is an engineer by training and is involved in alternative fuels (including hemp fuels) is still very much involved in the company.

The company’s Hemp I Scream sandwiches quickly became a staple at Red Rocks Amphitheater events and subsequently the 1stBank Center concerts in Broomfield. The Hemp I Scream sandwiches and pints are retailed at Whole Foods and Vitamin Cottage stores and soon will be distributed to nine states.

“It was really more of a curiosity at first — a way to do hemp information,” she said. “But we’ve got a loyal following, … and we feel we’re about to catapult (in sales).

“We are amazed at the growth that’s happening and the interest that people have shown — not only in Colorado but across the country,” she said. “There’s a growing awareness of hemp agricultural in the United States, and the primary things we have is a one-of-a-kind product, a local following and a big part in the cannabis culture in Colorado.”
But don’t get the wrong idea. While medical-marijuana outlets produce confections to imbibe the psychoactive elements of cannabis (mostly THC — tetrahydrocannabinol), the Hemp I Scream is decidedly nonmedicinal, unless perhaps it’s a sugar high you are craving.

The company claims the nondairy treats are decidedly healthy, as the hemp seeds used to create the nondairy milk have more protein than cow’s milk, are high in healthy omega fats, and the carbohydrates are contained in fiber.

“It’s really a nutritional powerhouse,” Squibb said. The hemp-seed milk is created in a similar process to that of soy milk, she said, “but it’s much easier to digest because it’s seeds, instead of beans.”

The nonmedicinal hemp that makes products not potheads was once a staple in the American economy. Rope, paper, linens, fuels and other products have been produced from hemp since 8000 B.C., and in early colonial America hemp was accepted for tax payments in lieu of currency.

Agricultural hemp was outlawed in the United States as part of the crackdown on its recreational use in 1935, but Squibb said Hemp Sources has been able to secure an organic supply from Canada for the last seven years.

“That’s been great for us, because previously we were importing seeds from China and Hungary,” Squibb said.

“We’re very focused on growth and expanding our sales base by using local health food manufacturing and expanding into (an expected lucrative market in) northern California,” she said.

UNFI Rainbow Natural Foods is taking Hemp I Scream to California and already distributes the product in Colorado, Nebraska, New Mexico, Minnesota, Texas, Wyoming, Kansas and Utah.

“It’s been a bootstrap method (of financing),” Squibb said. But the company has taken some significant steps to ensure that production can be increased. Currently, the company produces about 2,000 cases of cookies a month — 36,000 cookies — which sell at between $3.50 and $5 apiece at stores.

From the first batches that were made in Squibb’s college dormitory, the company has rented various kitchens in Boulder and Denver to deal with the fluctuating seasonal trends.

The company’s biggest seller is the ice cream sandwich, which features oatmeal chocolate chip/hemp flour cookies. Those cookies are now produced at Udi’s bakery in Louisville.

The company’s ice cream processing has relocated to Golden, where three full-time workers make the ice cream and assemble the sandwiches. Much of the administrative functions have also been moved there, which were previously conducted from a south Boulder home.