Currently, Canadian hemp can be used only for seed and fiber, with the leaves and flower unusable for CBD extraction without a special license from the national health agency.

Market estimates for the value of hemp-derived CBD in Canada are limited, but researcher Jan Slaski of InnoTech Alberta has predicted the overall Canadian hemp industry could be worth $1 billion a year by 2023. Canada grew about 120,000 acres of hemp this year. So even though Canada grew more than 10 times the amount of hemp cultivated in the United States last year, Canada has yet to unlock the most profitable part of the plant.

Canada’s expanded hemp rules are a direct response to the global explosion of the CBD market. Hemp growers and processors expect Canada’s Parliament to amend the country’s 1998 hemp law to allow more companies to extract CBD from leaves and flower.

The change would come by Parliament removing hemp-derived CBD from the list of controlled substances, an action that could happen separately from expected regulations authorizing recreational marijuana.

The expected change is leading companies to gamble that changed hemp regulations could allow Canada to dominate the CBD market just as it dominates industrial hemp. (Canada is believed to be the world’s No. 2 hemp producer behind China, though global acreage estimates are dicey.)

  • The regulations would permit both outdoor and indoor cultivation of cannabis, whereas currently outdoor production has not been permitted. However, cannabis would need to be stored and processed indoors.
  • The new rules propose four types of cultivation licenses: standard cultivation, micro-cultivation, industrial hemp and nurseries.
  • Micro-cultivation licenses are going to have a major impact on the marijuana industry in British Columbia because it potentially provides an avenue to bring thousands of gray-market growers into the regulated fold.
  • If a province or territory fails to establish a retail framework for recreational marijuana, the federal government could temporarily license the sale of cannabis to consumers, ordered over the phone, online or via written order.

Canadian hemp farmers will be able to sell flower and leaves for CBD extraction – but only to the few dozen entities licensed to process and sell CBD. The proposal limits the sale of hemp flower and leaves to “intra-industry” transactions.

Companies are planning Canadian hemp expansions:

  • Aurora Cannabis of Vancouver invested 3.2 million Canadian dollars ($2.5 million) in Hempco Food and Fiber last summer. Aurora has an option to raise its stake to majority ownership, a move aimed at acquiring market share in the rapidly growing health supplement market.
  • A few months later, Global Hemp Group of Vancouver spent the same amount, CA$3.2 million, for a 25% equity stake in a Colorado-based cannabidiol producer, Space Cowboys. Global Hemp said in the announcement it wanted a stake in the Colorado company because of its “extensive knowledge and experience” in growing and processing hemp for CBD.
  • Earlier this month, Future Farm Technologies of Vancouver acquired a 120-acre industrial hemp farm in Amity, Maine. Terms weren’t disclosed. Future Farm said it plans to devote the entire hemp farm to the production of CBD oil.
  • True Leaf Medicine, a company in Vernon, British Columbia, that makes hemp-oil treatments for animals under the name True Leaf Pet, tripled its production line in 2017 and plans to expand hemp offerings in the U.S. through pet-food stores.

Imports Opportunities

Currently, it’s not legal to import CBD into the United States, though other hemp products are commonly imported.

Legal challenges and a new 2018 Farm Bill in Congress could change the CBD landscape dramatically, however, possibly opening the door for CBD imports.

Other Markets

US Market

The hemp CBD market has reached an estimated retail value of $130 million in the United States, according to a 2016 market estimate by Vote Hemp and the Hemp Business Journal, and a 55% compound annual growth rate over the next five years will cause the market to crack the billion-dollar mark. Hemp-derived cannabidiol (CBD) is projected to be a billion-dollar market in just three years in the United State, according to a new report by Brightfield Group. However, the substance is considered federally illegal by the DEA (December 2016).

Europe

Cannabidiol investments are heating up across Europe, as entrepreneurs race to capitalize on hemp and CBD business opportunities.

A Swiss cannabis business, CBD420, is marketing hemp strains that meet Europe’s limit of 0.2% THC, with products for sale in more than 1,000 tobacco shops in Switzerland and more than a dozen shops in France, according to The Guardian.

And Canada-based Maricann announced this week that it’s starting a CBD subsidiary in Germany. MariPlant GmbH plans to start selling 25-milligram CBD capsules online in February.

Most European countries consider cannabis below 0.2% THC to be legal hemp.


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