Alberta’s Budding Hemp Industry
There is a new crop taking root in Alberta’s fields and local economy – hemp. The crop’s towering stalks and unmistakable broad green leaves might look like the cannabis plants used to produce marijuana, but pure hemp plants don’t have any intoxicating effect since they have no measurable THC content. Some might say hemp products are much more productive.
Historically, the focus of hemp processing was on the plant’s seeds for food, supplements and cosmetic products. Today, though, more of the hemp plant is used. The stalk consists of valuable fiber known for its durability, strength, and versatility. Hemp fiber is now used in a wide range of consumer and industrial products, including hemp concrete (“hempcrete”), textiles, fiber boards, and insulation products. Additionally, hemp fiber is an environmentally friendly alternative to more traditional materials such as cotton and synthetic fibers. It requires fewer pesticides and fertilizers and is naturally biodegradable. The crop also promotes soil health and takes a substantial amount of carbon out of the atmosphere compared to other crops.
Canada has a long history of hemp cultivation and is well-positioned to become a global leader in the hemp fiber industry. Hemp cultivation was legalized in Canada in 1998, and since then, the industry has grown significantly. According to the Canadian Hemp Trade Alliance, the country produced over 100,000 acres of hemp in 2020. Alberta leads the way, accounting for more than 40 per cent of the Canada’s hemp production. Our climate, longer sunshine and soil conditions are naturally suited for higher hemp crop yields. Northern Alberta, in particular, can see up to 30 percent higher yields than regions farther south. The global market for hemp is $5 billion and growing at 15% per year, representing a huge opportunity for the sector in Alberta and across Canada.
Canadian Rockies Hemp Corporation (CRHC) is one Alberta producer with their eye on the prize. In 2018, a group of young entrepreneurs founded the company after researching global hemp markets, cultivation and processing technologies. After raising am impressive amount of private equity and with some grant funding from Alberta Innovates, they completed construction of their first processing facility in Bruderheim in 2021. The facility is now processing multiple tons of hemp per hour from thousands of acres of crop, and CHRC is already planning on building another facility nearby. They have developed international commercial agreements and research partnerships, and assisted the Institute of Bast Crops in Ukraine in getting the country’s single purpose fibers added to Canada's current List of Approved Cultivars (LOAC) varieties.
Like many new ventures, it hasn’t been easy. Not many farmers in Alberta were familiar with the crop. Harvesting equipment that is readily available for mainstream grain crops didn’t work well with the hardy hemp husks. To address these challenges and ensure a reliable crop supply, CHRC leveraged their own expertise and research partnerships to develop a turnkey program for farmers. They also developed patented degumming and harvesting equipment out of their fabrication shop, which harvests the hemp much quicker and without breaking down.
Despite a growing market and strong business case, financing from banks and insurance has been a challenge for the industry. The big banks see hemp as being “too close” to cannabis plants that produce marijuana and will not lend to a hemp operation as they would for other more traditional crops. The same goes for certain business insurance products: hemp producers pay a significant premium over that of other similar operations, simply due to the plants genetic proximity to cannabis that is harvested for its THC content.
Luckily, Alberta’s Agriculture Financial Services Corporation (AFSC) has provided CHRC with a line of credit and Alberta Treasury Branch (ATB) has been somewhat receptive. AFSC is also considering hemp for inclusion in their crop insurance program now that the industry in Alberta has a good amount of crop data. The upcoming Agri-processing Tax Credit should help, too.
Alberta’s innovation programs and agriculture financing have helped CHRC get where they are today and made the province more attractive for private equity in the hemp industry. The innovative spirt that is so often characteristic of Alberta’s resource sectors, though, is what makes the future truly bright for hemp in Alberta.