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  1. U.S. hemp acres quadrupled in 2019, largely due to CBD-dominant cultivars
  2. Most Canadian hemp cultivars produce seeds
  3. Canadian farmers estimated to have harvested 120,000-150,000 acres

The race by U.S. farmers to cash in on surging CBD demand the first year after the United States legalized industrial hemp production, combined with increased consumer interest in the crop’s food products, could lead to higher Canadian exports in 2020.

“We expect higher exports to the U.S. because of higher production here and increased hemp awareness in the U.S. that did not result in increased seed production,” said Ted Haney, executive director of the Canadian Trade Hemp Alliance (CTHA).

In late 2018, the United States government federally legalized industrial hemp, which includes the crop’s increasingly popular byproduct cannabidiol, most commonly referred to as CBD. This cannabinoid, which still requires more clinical tests to prove many of the health benefits that marketers tout, was expected to fetch attractive price premiums compared with traditional crops. This caused many farmers to plant it for the first time in the United States.

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The estimated number of permitted acres for U.S. hemp cultivation nearly quadrupled to 230,000 acres in 2019 from 80,000 acres in 2018, and much of this is believed to have been planted with cultivars designed for optimum CBD production, said Erica Stark, executive director of the National Hemp Association in the United States.

Firm data is difficult to gather - as it is compiled on a state-by-state basis - and Ms. Stark estimates that 75 per cent to 80 per cent of the hemp grown in the U.S. in 2019 was for CBD and therefore not producing seeds as the plants are not pollinated in order to allow them to use more energy toward creating the popular cannabinoid.

This means that higher demand for Canadian hemp seed from the United States could boost sales for farmers and processors here. Tumbling U.S. CBD prices due to the large amount of product suddenly available on the market there, as a record number of farmers sell the byproduct after harvest, could deter many from planting the crop again next year.

Prior to U.S. federal legalization, industrial hemp was already legal in some states but could not be transported across borders.

Hemp seeds, also referred to as grain, are increasingly popular as a health food. Rising demand for hemp seeds and farmers’ emphasis on CBD-focused varietals in the United States, combined with higher Canadian hemp production, creates the likelihood for higher Canadian seed exports.

The size of Canada’s hemp crop is expected to be compiled later this month, with the harvest delayed in parts of the Prairies due to early snowfalls. The CHTA forecasts 120,000 acres to 150,000 acres will have been harvested here this year. Since hemp has been grown legally in Canada for 20 years as a food crop, CBD extraction first became legal with the Cannabis Act in 2018. Government-approved cultivars are designed for food production, so more than 90 per cent of Canadian hemp harvested this year is believed to have produced seed, Mr. Haney said, adding he expects hemp seed exports to the United States to be higher in 2020 than in 2019, potentially even reaching a record.

“Higher production here and increased hemp awareness in the U.S. did not result in increased seed production there,” Mr. Haney said.

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Statistics Canada data show that Canada exported 5.3 million kilograms of hemp seed in 2018, with 73 per cent of that sent to the United States. This compares with sharply higher exports in 2015 at 17.2 million kg, with 92 per cent going south of the border.

“The food products is a market for the United States. It’s everything from shelled hemp seed, hemp seed oil, and we’re expanding into other products including granola,” said Clarence Shwaluk, Director of Farm Operations at Manitoba Harvest.

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