That didn’t happen.

Instead, the committee of experts reviewing the Cannabis Act barely mentioned hemp in its 91 page report published March 21.

The Canadian Hemp Trade Alliance said the report fails to provide “meaningful guidance” on how Canada should manage and oversee hemp production and processing in the future.

“The expert committee … were focused virtually 100 per cent on public health and safety, protection of youth. And they had no expertise and no mandate to consider hemp,” said Ted Haney, president and chief executive officer of the CHTA.

“But they pretty much just kicked the ball down the court.”

CHTA chair Clarence Shwaluk made a similar comment.

He said the committee could have recommended changes to the Cannabis Act that would separate hemp from “drug regulations and removed obstacles to our industry’s growth and development.”

Health Canada has regulated the cultivation of hemp since hemp was first grown in Canada in the late 1990s, requiring farmers to get a license to grow the crop.

Initially, farmers accepted those constraints. But over the last 10 to 15 years, growers and hemp advocates have lobbied the federal government to de-regulate the crop and free it from Health Canada regulations.

In 2018, the federal government legalized the production and recreational use of cannabis. Folks in the hemp industry assumed that legalization of cannabis would help liberate hemp from the Health Canada regulations.

However, the federal focus on cannabis has created more problems, Haney said.

“Being regulated under Health Canada became more difficult after the legalization of cannabis,” he said.

“The focus of the structures … became all cannabis, all the time.”

One major obstacle for hemp is that some bureaucrats and policy makers in Ottawa did understand hemp and the opportunity for Canada’s agriculture and agri-food industry.

However, in the last five years or so, many of those bureaucrats retired or moved on to other opportunities, Haney said.

“We ended up with new officials … (with) very little expertise (and) very little knowledge of agriculture,” he said. “The mandates of Health Canada aren’t related to agronomy … variety approval, licensing, food safety.”

Hemp has been grown in Canada for about 25 years, but the industry has never lived up to its promise. In the 2010s, hemp leaders were predicting that acreage would hit 250,000 by 2018. That target was never reached as the industry went through several boom and bust cycles.

In the last few years, farmers have seeded 35,000 to 50,000 acres of hemp across Canada for the food industry or for fibre.

The expert committee report and the lack of recommendations to de-regulate hemp are a disappointment for Canada’s hemp sector, but Haney believes opportunities remain.

The report and the minimal mention of hemp in 91 pages illustrates that hemp has nothing to do with cannabis.

“They (Health Canada) convened a legislative review, the expert panel has been clear that hemp really isn’t related to their mandate. It doesn’t represent the kind of risks that Health Canada is adept at dealing with” Haney said.

The panel did make one recommendation regarding hemp, saying Health Canada and Agriculture Canada should create an expert advisory body to look at hemp regulations.

For Shwaluk, it’s obvious how that regulatory framework should be structured.

“The government of Canada must fully recognize that hemp is not adult use cannabis or medical cannabis and start treating hemp as a normal agricultural crop.”

—Robert Arnason writes for the Western Producer.

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The hemp industry is experiencing somewhat of a boom as hemp products of all stripes enter mainstream consumer markets.

“Health Canada is running at least double the number of hemp license applications,” said Ted Haney, executive director of the Canadian Hemp Trade Alliance.

About 80,000 acres are slated to grow hemp, and will produce hemp hearts, hemp oil and livestock feed.

“The vast majority of hemp acres seeded and harvested will generate grain, mostly for human consumption,” said Haney.

Similar to barley produced for either malt or feed, hemp that does not meet food standards is reclassified and sold as livestock feed.

“The feed market is a support market, not the primary market, though it’s from the same product,” said Haney.

“It becomes feed if it’s off weight, or has colour issues, or sat in inventory for too long,” he explained. “Then it becomes reclassified.”

Haney also explained that producers make the decision to sell hemp seed for feed grain if they don’t want to wait for a scheduled food processor pickup.

“If they want to generate cash immediately, they move their inventory to the livestock market,” he said.

Human consumption drives most of the hemp market, due in no small part to the significant legal red tape that is involved in producing other hemp products. Hemp growers can also sell the product’s flowers and leaves to cannabis processors, who extract CBD oil.

“Legally, right now, CBD can only be sold by a licensed processor. That’s the only legal pathway,” said Haney.

Conventional hempseed is currently selling between 50 to 60 cents/lb., while its organic counterpart is between $1.25 and $1.60/lb.. Hemp fibre is between $100 and $150 per tonne, and biomass is around 40 cents/lb.

“This industry was built, from 1998 to 2018, by one revenue source, and that’s food,” said Haney.

In 2018, the hemp industry generated $96 million in exports, and $42 million in domestic sales, according to the CHTA.

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Even the passage of the U.S. 2018 Farm Bill, which would legalize hemp in that country, shouldn’t have much of an impact on prices.

The new bill is expected to be signed by U.S. President Donald Trump before the end of this month.

Hemp is bought and sold by direct contracts, Shwaluk said. Currently, conventionally-grown hemp has been selling in the mid-50-cents/lb. range and organically-grown hemp has been around $1.30/lb.

“There’s not a whole lot of price discovery going on throughout the year. There might be the odd load that gets bought that might vary a little from the price, but for the most part when we go out to the market, it’s a consistent price. There’s not a whole lot of fluctuation,” he said, adding increased U.S. production may keep a lid on how far prices can go up in Canada.

Shwaluk stressed the need for any producer to sign a contract before growing hemp.

“Hemp, in the big scheme of things, is a relatively small crop, in terms of the number of acres,” he said. “There’s not a real effective price discovery model like you would have with commonly traded crops.”

Under the previous U.S. Farm Bill, passed in 2014, each of the 50 states had the authority to permit hemp crops for experimental and research purposes, Shwaluk said. With the excitement over legalization of hemp he expects U.S. production to increase dramatically in the coming years.

Another good thing Shwaluk saw in the new U.S. Farm Bill will be hemp getting more public attention as a food product, which would help the industry in general, including Canada’s.

“We could get more food companies and retail distributors looking at hemp as a serious food option,” he stated.

Along with food products, hemp is used for a number of other products including medicinal, personal care and building materials, according to Health Canada. Unlike cannabis, which contains tetrahydrocannabinol (THC), hemp has only a trace amount of the drug and cannot produce a high.

Of Canada’s 41,200 acres of hemp seeded in 2018, almost 90 per cent were planted on the Prairies, according to Statistics Canada. Much of the rest was grown in Ontario and New Brunswick.

— Glen Hallick writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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“We had a bit of overproduction in 2017. It doesn’t take much to overproduce a crop when you’ve got 100,000 acres. So it’s a delicate, delicate balance,” said Russ Crawford, president of the Canadian Hemp Trade Alliance (CHTA) and a Calgary-based director of B.C. hemp processor Naturally Splendid Enterprises.

Even with the oversupply, there are producers who will be starting to grow hemp. Winnipeg-based Fresh Hemp Foods, for example, has contracts for this year with a small number of new growers.

“There are people that are still discovering the crop and looking at ways to include it in their rotations,” said Clarence Shwaluk, director of farm operations for Fresh Hemp Foods.

Even with a price lower than in years past, farmers can still get a sizeable return from hemp — and pricewise, he said, it’s comparable to growing canola.

“Even though the price has corrected there still is profitability in this crop,” he said. “We think that’s going to continue to attract growers.”

According to Crawford, conventional hemp prices have dropped about 20 cents this year, to around 55 cents/lb.

“It was crazy good before so there’s still incentive to produce hemp but certainly at a lower number perhaps than in previous years,” he said.

While conventional prices have dropped, organic hemp prices are still higher, at around $1.80-$1.85/lb., according to Crawford.

“We expect higher acres in organic versus what we did in 2017,” he said. “We will see some growth on that side of things and very little carryover on the organic side.”

For conventional, there have been some changes on the international marketplace. Canada used to sell a lot of hemp to South Korea, but China has started exporting there at a lower price — another reason Canadian prices are lower this year.

“The consumption of hemp in South Korea has dropped and it’s also been displaced by seed from China,” Crawford said.

Crawford said he has also heard rumours of Chinese hemp making its way into the Canadian marketplace, but doesn’t think that’s the case as he hasn’t seen any news in government reports about Chinese hemp seed imports.

However, he said, he does think Chinese hemp seed is making its way into the U.S., one of Canada’s main marketplaces.

State-level laws have also been changing in the U.S. to allow for production of industrial hemp, but there aren’t a lot of processing facilities stateside, which could lead to U.S. hemp seed making its way into Canada to be processed.

“Our exports to the U.S. are down quite a bit this year as well, and so we’re in a competitive state,” Crawford said.

Australia last fall approved hemp for human consumption, where previously it had only been allowed for pet food.

Naturally Splendid Enterprises was the first company to ship a container of hemp food product into Australia, while Fresh Hemp Foods is now in contact with potential customers there.

Canada’s hemp industry is also part of the Protein Industries Canada supercluster, one of five chosen last month to share a five-year, $950 million federal funding commitment. The CHTA is optimistic this could help to grow the industry.

— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow her at @ashleymr1993 on Twitter.

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It’s a demand becoming tougher to fill, according to an industry expert, as the general public becomes increasingly interested in the plant.

“You talk about canola being the miracle crop? Well, hemp has even more uses,” said Kim Shukla of the Canadian Hemp Trade Alliance at Steinbach, Man.

Smoothies, cereals, milk, salad dressing and biodiesel are just some of the uses customers have come up with, with most of the demand coming from the U.S.

Protein powder is another common hemp product, she said, but where in the past it was aimed exclusively at the bodybuilding market, now it’s directed towards the general public.

“That’s where we’re seeing it, in the smoothie market for people’s breakfasts.”

Canada’s crop this year is expected to measure 100,000 acres, about the same size as last year’s.

According to Shukla, the 2015 crop looks like a typical one despite some periods of excess dryness in Alberta.

The industry generally considers “decent” yields to be between 750 to 1,000 pounds an acre. Those numbers were reached last year and Shukla said she believes they’ll hit them again this year.

“We’re expecting decent yields based on the reports back,” she said.

The majority of the acres have been sold, though, with Shukla estimating 90 per cent have been contracted to five key processors across the country.

“There’s no way we can meet market demand at this point in time. We’re always looking for more processors to address that market demand that exists.”

According to Shukla the average price for hemp right now is between 65 to 85 cents per pound, which is about the same level as last year.

“Farmers are quite happy with the return they’re receiving,” she said.

Organic acres continue to demand the top end of that price range, due to customer demand.

Producers are about a third to halfway finished harvest, Shukla said. However, excess moisture has been a problem.

“In Saskatchewan I talked to one producer who told me the crop was 25 per cent moisture and he was looking for 15 per cent moisture.”

That farmer, she said, is waiting for the moisture to decline and won’t likely start harvesting for another seven to 10 days.

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

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