New federal cannabis regulations could open up big business opportunities for Canadian hemp farmers, says an industry trade group — but first, there's work to be done.
Under Canada's current Industrial Hemp Regulations, farmers are limited to selling their crop's seeds and stems, which can be processed into food or fibre.
The rest of the versatile plant is "basically wasted," said Russ Crawford, president of the Canadian Hemp Trade Alliance.
"It's either burned up, or it's left in the fields to rot when, in fact, there's tremendous potential for that," he said.
But an update to those regulations, released last week in tandem with Ottawa's new rules for the legal recreational marijuana industry, will let hemp farmers harvest buds, leaves and branches as well.
Those parts of the hemp plant contain significant amounts of cannabinoids, chemical compounds produced by cannabis.
Although industrial hemp varieties of cannabis are bred to produce a negligible amount of THC — the cannabinoid responsible for marijuana's high — they can still contain the non-intoxicating cannabinoid cannabidiol (CBD), which has therapeutic properties. (The U.S. Food and Drug Administration recently approved GW Pharmaceuticals' Epidiolex, a CBD-based prescription drug used to treat seizures associated with certain forms of epilepsy.)Advertisement
The opportunity to extract CBD from outdoor-grown industrial hemp "just adds to the revenue stream of the hemp plant," said Crawford.
But growing a hemp plant suitable for yielding CBD, hemp seed and fibre all at once might be tricky, at least at first.
"That's a long-term dream, perhaps, but it would require a lot of breeding," he said.
"But initially, a farmer will have some choices here. He can harvest for the cannabinoids if he can get a good value and a good contract, he can let it go to seed and harvest it that way.... Or he can choose to plant a variety that's more suited to fibre production and capture, perhaps, both cannabinoids and fibre out of the same plant."
Market prices for CBD are fairly high right now, he said because it's in short supply.
"So, like anything else in an open market, the more we produce, the more likely it is it will lower the value."
This season, Don Dewar's family is growing about 150 acres of hemp on their farm south of Dauphin. Dewar estimates a hemp farmer can grow at least one plant per square foot, and with 43,560 square feet in an acre, producing huge amounts of hemp is no problem. But harvesting and drying millions of hemp plants in a way that preserves them for CBD extraction will present new challenges, he said.
"We need to have a way to harvest it," he said. "(CBD extraction) would make it more valuable, we think, but as soon as somebody comes up with a method of harvesting thousands of acres instead of thousands of plants, then the price (of hemp-derived cannabinoids) will come down. There's going to be a window of opportunity to make some money, but once it turns into a volume product, the price will come down considerably, I expect."
Dewar said he would consider selling his hemp crop for CBD extraction in the future, but only if he could get someone else to invest in the necessary harvesting and drying equipment.
In the meantime, he said other provisions in the updated Industrial Hemp Regulations should make farming easier. For example, the new regulations will do away with criminal record checks for industrial hemp cultivators and will free those producers from having to keep their harvest under lock and key.
Most important, the legalization of cannabis helps to address the longstanding stigma associated with hemp, Crawford said.
"And so as a product, here you are trying to market it to a mother who would be feeding this to her children, or to a senior or somebody — they look at that, and it just adds to this confusion of, 'What's the difference between hemp and marijuana?'
"And when you say, 'Well, you know hemp's a controlled substance,' a lot of people would shut off right there, and just say 'I'm not going anywhere near that,' when, in fact, there's absolutely zero evidence that there's any problems or potential problems with hemp. But we just got thrown under the bus with marijuana."
Still, Crawford is asking Health Canada to make one adjustment to its new regulatory approach to industrial hemp.
The new regulations won't come into effect until Oct. 17, the day recreational cannabis will be legalized in Canada — but that's too late in the season for hemp farmers to harvest and sell the parts of their plants that could be sold off for CBD extraction. Crawford wants the regulator to make a transitional exception so farmers can harvest those parts this year.
"When we went into this, we were expecting (legalization on) July 1," he said.
"That's what all of the communications had implied, so we felt we would have an opportunity for our growers to capture value in this crop year. So this is a step back, and potentially a loss of a whole year.... We're not asking them to change the legislation, just to give the farmer access to it, on the hemp side, a little bit sooner."