Global Market

These days, at least 47 countries cultivate hemp for commercial or research purposes. The largest producers of hemp are currently Canada, China, Chile and France whereas the USA is the largest importer of hemp products, receiving most of its seed and fiber from Canada and China, respectively.

Hemp acreage in North America and the European Union countries reached record levels in 2017, nearly 180,000 acres and about 90,000 acres respectively, which could put global acreage at more than 330,000 acres. North America is expected to grow with a CAGR of 16.9% from 2018 to 2025 due to increasing CBD oil- and fiber-based products, primarily used in food and beverages, textile, and personal care sectors.

The EU has an active hemp market, with production in most member nations. Production is centered in France, the Netherlands, Lithuania, and Romania. Many EU countries lifted their bans on hemp production in the 1990s and, until recently, also subsidized the production of “flax and hemp” under the EU’s Common Agricultural Policy. Most EU production is of hurds, seeds, fibers, and pharmaceuticals.

Asia Pacific market is expected to register a CAGR of 15.9% from 2018 to 2025 mainly because of growing fiber consumption. Major supplier countries list includes China, India, Australia, and South Korea.

The Central and South America market is driven by growth in consumption of oil for pharmaceutical and food and beverage industries.

The global hemp industry is projected to reach $5.7 billion in 2020.

Canadian Hemp Market

Hemp Legalization

The regulations define industrial hemp as “cannabis plants whose leaves and flowering heads do not contain more than 0.3% THC.” Any part of the plant identified in Schedule 2 of the proposed Cannabis Act, such as a non-viable seed or mature stalk without any leaf, flower, seed or branch, would fall outside the scope of the proposed Act. As such, activities related to these plant parts (such as their processing or sale) would not require a licence under the proposed Act. Further, as is currently the case under the Industrial Hemp Regulations, a licence would not be required for the sale of derivatives of seed and grain that contain 10 micrograms per gram of THC or less.

The Cannabis Act and the new industrial hemp license set out clear guidelines for hemp. The Cannabis Act clears the way for whole hemp plant utilization. Industrial hemp licenses would authorize the intra-industry sale of leaves, flowers and branches (or the whole plant). That means licensed industrial hemp producers could sell the flower to someone who has permits to process and sell CBD.

Canada’s Commercial Hemp Industry

Canada’s commercial hemp industry is fairly new: Canada began to issue licenses for research crops in 1994, followed by commercial licenses starting in 1998. Since hemp cultivation was legalized in Canada, production has been variable year to year but generally increasing – which some attribute to increased import demand in the United States. Acreage has ranged from 48,000 planted acres in 2006 to about 8,000 acres in 2008, rising again to 100,000 acres in 2014 but then sharply dropping back again to 33,000 acres in 2016. In 2017, acreage in hemp cultivation and production rose sharply – reaching a record of nearly 140,000 acres, though Canada has not yet unlocked the most profitable part of the plant.

The number of cultivation licenses has also varied from year to year, reaching a high of 560 licenses in 2006, followed by a low of 77 licenses in 2008 and rising to 340 licenses in 2011. Since then, the number of licenses has risen to more than 1,830 issued in 2017.

CBD Oil Market

Canadians spent about $5.7 billion on all forms of cannabis in 2017, according to StatsCan. Deloitte released a report estimating Canada’s recreational cannabis market could soon reach $8.7 billion annually, and recreational legalization in Canada is very likely to have a residual effect on the entire cannabis market, including CBD-based products.

The CBD market is projected to be worth more than $20 billion by 2022, according to research firm Brightfield Group.

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 140,000 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.

New 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.)

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.

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