Canadian hemp farmers could see their revenue double and acreage surge to a record in the coming years as the expectation for new regulations, combined with increasing demand for CBD and renewable building materials, could increase the plant’s bounty and entice more producers to grow the crop.
Farmers in Canada have been harvesting industrial hemp seed for food since 1998, but as the number of products that can be derived from it rise along with developing technologies and regulations, annual output is forecast to more than double by 2023.
“It’s a four cylinder engine that’s been firing on one cylinder. We’re just starting to fire up the other cylinders,” said Ted Haney, executive director of the Canadian Hemp Trade Alliance.
“We’re expecting significant growth on the basis of our four major revenue streams. Right now food is the primary revenue stream for where we are now.”
Hemp farmers harvest seed primarily, along with some fibre from the stalk and, starting in 2018, they sold the flower for CBD extraction due to the Cannabis Act. They could soon add animal feed to the mix to bring in around $2,200 per acre, up from just over $1,000 per acre, Mr. Haney said.
“That’s by building on our strong seed market, adding the livestock feed market, and adding brand new revenue streams for the fibre and fractions market,” he said, with the latter referring to CBD oil extraction.
The amount of fibre destined for products ranging from hempcrete to fabric is expected to jump along with demand and new processing capabilities.
Now, the Canadian Hemp Trade Alliance is asking the Canadian Food Inspection Agency to amend regulations so the plant’s seed and hull can be sold as livestock feed, opening a new market for farmers. Mr. Haney expects this new registration will be in place in time for the 2019 crop.
Hemp acreage in Canada is forecast to reach a record 450,000 acres by 2023, up from an estimated 138,000 acres in 2017 and 80,000 acres in 2018, Mr. Haney said.
The alliance expects Canadian farmers will plant a record 150,000 acres in 2019, as farmer interest is on the rise amid expectations for increased revenue streams from the crop.
“We can grow hemp really competitively. Hemp loves light and our northern latitudes provide long daylight hours,” he said.
But Canada’s hemp acreage dropped sharply this year after the export market for South Korea collapsed in 2017 due to regulatory issues there as well as cheaper seed in China, Mr. Haney said.
While Canada is expected to sharply ramp up its hemp production and exports in the coming years, it faces competition from low-cost producers in Asia. New Frontier data show China’s domestic hemp sales reached around US$1.1-billion in 2017, roughly a third of the global market.
“We are seeing so much growth and industry development in Asia’s hemp sector, if exportation of hemp-based products, hemp-derived CBD, and hemp-based technologies continue to evolve with China and India leading the way, we may be looking at a modern-day East-West Silk Road, with material global economic implications, in the not-too-distant future,” Giadha Aguirre de Carcer, founder and chief executive of New Frontier Data, said in a November press release.
China makes a multitude of products from locally grown hemp seeds, flowers and leaves, husks, stems, and roots, and is expected to export CBD isolate to North America and Europe. This will position China to sell a large share of the global hemp-derived CBD market, which could reach 4.5 million lbs by 2021, according to a “green paper” written by Mazakali, a U.S.-based capital investment adviser.
“Thailand, Malaysia and India are also making progress towards joining the Asian cannabis march, one towards which investors and entrepreneurs alike are well-served to direct attention,” Mazakali said.