By Tim Kalinowski
Hemp’s potential is very bright right now with legalization of cannabis in Canada, but there is a long way yet to go to grow the industry, says Ted Haney, executive director of the Canadian Hemp Trade Alliance. Haney recently stopped by Farming Smarter’s Field School in Lethbridge to give his insights and perspectives on an industry which equally excites and frustrates him.
Haney says the reason for many of the hemp industry’s pains is the fact is was banished from the Canadian agricultural landscape for 65 years due to hemp’s association with cannabis, and it was only about 20 years ago allowed to finally return from exile; albeit with plenty of strings attached.
“In 1938 the production of hemp was banned in Canada at the same time as cannabis was banned,” explains Haney, “and the full implementation of UN Narcotics Convention was fully implemented. That took hemp out of centre of mind. It took hemp out of normal rotations. And it took hemp-based products out of regular processing— whether it was rope, textile, bedding, feed, food, you name it—those were regular uses at that time.”
Haney gives a few examples of some of those strings which continue to hold back industry growth in Canada. Even today, he says, producers are not licenced to feed hemp to any livestock category in Canada. Hemp was simply never accounted for as feeding policies emerged in the country over the decades.
“Of course hemp is a reasonable oilseed that provides energy and protein for livestock, and was used that way for thousands of years, but that is just one example of what the absence really meant for hemp.”
The Canadian Hemp Trade Alliance is currently working on clearing that regulatory hurdle, and Haney is optimistic some livestock feeding permissions will be granted over the next two years. Flowers and leaves are likely not on the table, he says, as they contain cannabinoids which would not be allowed into the food chain, but other areas of the plant for feed purposes are well within reach, including seed-based feeds, home seed screenings after processing, seed hulls after you have cracked the heart, crushed seed, oils, hearts, high concentrate proteins and low concentrate proteins.
“We’re going to take those eight through (licencing) first,“ he explains, “and then we’re going to come back the next rotation will be the products of the flowering head after cannabinoid extraction.”
Fibre from hemp is also a proven commodity which has been used for thousands of years, but Haney says there are major stumbling blocks in place still for the true establishment of this part of the hemp industry.
“Today with the acreage we have there is about ten times the supply of hemp straw in Canada than the capacity to process it,” he says. “So there is no functioning market for hemp fibre in Canada; it doesn’t exist.What does exist is some farmers who have a relationship with a hemp fibre processor and they are able to sell for revenue.
“Fibre is coming,” he states. “I predict nationally there will be a doubling of the fibre processing capacity in the next year or 18 months.We are also, though, increasing the size of the crop; so the ten to one will not be far split.”
Haney predicts it will take a major investment in the hundreds of millions of dollars for 8- 10 hemp processing plants in Western Canada to meet current market conditions—so not likely feasible in the short or medium term. Haney says to grow hemp for fibre as a sole focus just doesn’t pay for farmers right now as you would not be able to multi-crop it. You have to plant at a density sufficient enough to produce five tonnes an acre of fibre for bio-composites and textiles. Along with that very dense seeding rate, he says, you would also have to harvest early so as not to produce any grain an keep stems in an immature state for high quality processing.
Most hemp farmers currently plant at a density which produces about two tonnes of fibre per acre, and aim to sell their crop at its highest value after seed and flower production. The protein and human food market, expressed through hemp hearts, remains the most bankable part of growing hemp. The goal of farmers would be to keep that lucrative market, and open additional revenue streams to sell currently unused parts of the plant for added valuethrough the production of fibre, CBD oil, animal feed and cannabis, Haney says.
Hemp farmers in Canada were finally granted the right in August 2018, just prior to cannabis legalization, to sell flowers and leaves to cannabis extractors—but it has been a steep learning curve thus far, admits Haney.
“About 20,000 acres of flowers and leaves were harvested last year,” he states, “and it produced anywhere between $0 and $400 per acre to farmers who harvested that product.”
He explains further why some farmers went bust on their first attempt to sell flowers and leaves for cannabis extraction.
“There are Standard Operating Procedures that the cannabis companies require in order to bring anything through their front door and run through cannabinoid extraction systems,” Haney states. “And there were producers who took product out of the field, put it in a quonset and thought they would get to drying in a week or so.
“By the time they went to do that, it was already fermenting so it put in off-flavours at the best, and at the worst you started mold growth. There simply were no documented SOPs, and when they went to sell that to cannabis processors the answer was: ‘Thanks, this is unsaleable.’”
However, even amidst the telling of this cautionary tale, Haney can’t keep a gleam of optimism from his eye.
“To others,” he states, “who in advance put their trade relationships together, advanced contracted or at least had terms of reference where they worked out SOPs, documented them along with their prospective clients, and shared and developed them together; so when that chaff came out of the back of the combine, it was a very specific set of actions that would be taken to get it into a dried and stable state so it could be sold to cannabis extractors at higher values. And that was up to a high of about $400 an acre last year.”
Haney dares to ask the question: What if hemp producers could find a way to put all the pieces of the puzzle together in the next decade of production? What if instead of one revenue stream represented by the human food industry, all these aspects of hemp production finally come together, the livestock feeding licences, the refined cannabis extraction process, the greater opening up of the CBD oil market and the fibre? Hemp could turn out to be one ofWestern Canada’s most versatile and profitable crops going forward.
On the agronomy side of things, we have it pretty much set up already, states Haney. The hemp plant is remarkably drought tolerant in any growing conditions, he says, but of course thrives even better under irrigation. The Canadian climate is perfectly suitable to hemp with our cooler nights. Hemp has extremely low disease instances, he adds.
“Hemp loves nitrogen,” Haney says, “and the potassium levels are also notably higher. It does do well in organic rotations. It yields from 400 pounds of seed to three tonnes of seed per acre. The price is $0.50-$0.60 per pound right now on average. For organic $1.50-$1.60 per pound.”
Haney says it costs about $75 per acre to seed. But managing the crop once it is in the ground; that’s when things get a little tricky, he says.
“On the input side, the bad news is there are very few input products licenced for hemp. You can use Edge as a pre-emergent, but you can’t currently use any post-emergent. There is no pesticides that are licenced (in Canada). No fungicides licenced.”
But there is also an upside to this situation, says Haney: That low natural disease occurrence associated with hemp.
“The upside is you don’t have many input costs on the chemical side,” he says simply.
Haney says the challenges involved with growing the Canadian hemp market ensure each and every day is an interesting one in his business.
“An interesting crop,” he says. “but way over there in the corner of the national (agriculture) industry. Since 2010 though, there has been a distinct growth projection of the industry characterized by a lot of volatility.”