IN THIS ISSUE:

Part One:
Editorial
Top of the Crop:
1) Latest ONDCP Position On Industrial Hemp
2) The View From Up Here
3) CGP Declares Bankruptcy; Canadian Hemp Industry Moves On
4) Hemp Foods Study to be Released in May 2000
5) More Hemp Market Data
6) MCIC Offers Crop Insurance For All Hemp Grain
HCFR Seed Guide 2000, Part II
So you want to be a hemp farmer?

Part Two:
Hemp 2000 Report
Conference Notebook: Some Highlights
Show Reports
FIBREX 2000 (March 8th, 2000), Delta, BC
Northern Alternatives Conference at UNBC (March 25-26th)
CHFA Expo West Report (April 1-2)
Hemp Shorts
A) Nutiva Launches New Line of Hemp Chips
B) New at Hempology.org
C) Young, Innovative Company on Tour with Organic Hemp Oil
D) Howell Becomes Hempwell Inc.
E) HCFR Recipe of the Month: Hemp Carrot Cake
Association News
Manitoba Industrial Hemp Association Update; 1999 in review
Upcoming Events
April 6-8: The First National Clinical Conference on Cannabis Therapeutics, The University of Iowa Memorial Union, Iowa City, Iowa
May 13-14: Santa Cruz Industrial Hemp Expo, Santa Cruz, CA
July 17th, Canadian Consulting Agrologists Association 27th Annual General Meeting and PD Conference: Winnipeg, Manitoba
July 18-22, July 23-24 Herbs 2000: Saskatoon, Saskatchewan and Outlook, Saskatchewan
August 5-7: Natural Life Festival, St. George, Ontario
September 8-11: HIA Convention 2000, Ontario, Canada
September 12-14 : Outdoor Farm Show, Woodstock, Ontario
September 13-16: Bioresource Hemp 2000, Wolfsburg, Germany
September 22-26: Natural Products Expo East 2000, Baltimore, Maryland
October 4-6: 3rd Annual Ag Fiber Technology Showcase, Memphis, Tennessee.
Marketplace
Masthead, Credits, and more info

Announcement, Annonce, Ansage, Aviso

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Editorial

Welcome back to the HCFR and to our March/April issue. It's been a busy month, as I have been zipping around the West, going to conferences, and getting to speak to as many people in person as possible. Certainly makes a good change from the email and phone routine.

As you will see in this issue, there are many stories in this never a dull moment of an industry and not all of them are good news. The decline and fall of Consolidated Growers and Processors has been a much-discussed topic in many circles. If you are new to this story, or want a short update, check out our coverage in Top of the Crop. I would also like to direct readers to Roberta Rampton's excellent series of articles on this company; there are all archived at the Western Producer site (www.producer.com, do an editorial search for CGP). Roberta deserves, I think, some sort of award for her investigative work on this story, and for keeping an eye on the ball despite less than cooperative influences that crossed her path. Hat's off for all the hard work and for maintaining the public's right to know.

I'm not trying to be a myopic booster, but there are too many good things happening to become discouraged at this point. I'd like to point out the continuing legislative efforts in the US that are seeking to rehabilitate hemp in American public life and the scent of markets that are finally being opened up to our Canadian hemp. These are just two things. I also believe that the many people who make up the industry have the courage, character, intelligence and endurance we need to make hemp flourish here in our times. Our human resources will always be our best resource.

Time for a short announcement. The HCFR will not be publishing for several weeks, as I am packing up the office and gear and relocating to Saskatchewan. Some fine opportunities await there, including working more closely with the Saskatchewan Hemp Association, and the chance to immerse myself in a community where agriculture means a little more than the contents of a box. And because of this move, the HCFR will become a better publication.

Stay in touch. See you next time, in late May.

Arthur Hanks
April 2000
Vancouver, BC
arthurhanks@hotmail.com

To the Editor:
Re: Comparison of Bast Fibre and Whole-Stalk Mechanical Pulps (HCFR # 9)

I forgot to thank three people from the University of Alberta who were instrumental in scheduling and preparing the raw materials for this and many other hemp studies we have done. I would appreciate if you could print an "addition" to the thanks list in your upcoming issue. The people I would like to thank are: Ken Domier, Professor Emeritus, Svend Nielsen, Research Assistant, Ray Hollowach, University Farm Manager.
Wade Chute, chute@arc.ab.ca

Top Of The Crop

1) Latest ONDCP Position On Industrial Hemp

The following is verbatim from a letter written to the Illinois speaker of the house, dated Feb 28, 2000, regarding the Illinois House Bill 3559, which would authorize and finance SIU Carbondale and the University of Illinois to plant and study test crops for the next two years. Since the letter was written, the bill has passed the State Senate and the House Agricultural Committee and is slated to go before the whole house.

Under the Controlled Substances Act, the definition of marijuana includes all parts of the Cannabis sativa plant except for the sterilized seeds, fiber from stalks, and oil or cake made from the seeds. However, all hemp products that contain any quantity of THC are considered Schedule I controlled substances and cannot be imported into the United States or cultivated domestically without DEA registration and permits for importation.

Over the past two years, the DEA has received information that sterilized cannabis seeds, not solely birdseed, has been imported for the manufacture of food products intended for human consumption. DEA also learned from the Armed Forces and other federal agencies that individuals who tested positive for marijuana use subsequently raised their consumption of these food products as a defense against positive drug tests. Consequently, the Administration is reviewing the importation of cannabis seeds and oil because of their THC content. The National institute on Drug Abuse is studying the effect of ingesting hemp products on urinalyses and other drug tests.

The federal government is concerned that hemp cultivation may be a stalking horse of the legalization of marijuana. According to a recent report of the Department of Agriculture, U.S. markets for hemp fiber (specialty textiles, paper, and composites) and seed (in food or crushed for oil) are, and will likely remain, small and thin. U.S. imports of hemp fiber, yarn, and fabric and seed in 1999 could have been produced on less than 5,000 acres of land. Also, the potential exists for these markets to quickly become oversupplied. Uncertainty about long-run demand for hemp products and the potential for oversupply discounts the prospects for hemp as an economically viable alternative crop for America farmers.

Barry R. McCaffrey graduated from West Point and had combat duty during the Vietnam and Gulf War; after resigning from US Southern Command, he was appointed director of the Office of National Drug Control Policy in 1996.

2) The View From Up Here

Shipments of Canadian hemp grain and deriavtives are continuing despite the latest ONDCP directive against hemp foods and other products. However, a few shipments of hemp goods have been seized at the US border since the middle of February.

One shipment, a 500 lb. hemp seed order originating from Vancouver Island's CHII was stopped at the Washington border on Feb 29^th.

According to CHII's Eric Hughes, his shipment, measuring less than 4 ppm, was seized by US customs for sampling. He is expecting testing results from Customs sometime in mid-April.

Hughes notes that subsequent shipments, including a 1000 lb. order on March 14^th, have continued, despite the seizure.

Others shipments belong to Ontario's Hempola, which included inedible hemp soaps, were stopped on Feb 15^th and Feb 22^nd.

Despite these stoppages, the mood of Hempola's John Staines, is business as usual. "We are used to it, we have had shipments stopped for years, " says an optimistic Staines. "Every three months or so, our products get stopped ... and then released again. "

Hempola does an estimated half of their business south of the 49^th parallel. This amount has tripled in the past year.

Recent meetings between the various US agencies with a stake in the dispute - US Customs, US Dept of Defence, the DEA and the ONDCP - have not cleared the air. According to Nutiva's John Roulac, a meeting was held between these groups on Feb 22, with the US Dept. of Agriculture present as an observer. The meeting revealed no unanimity on the issue of Canadian hemp seed and derivatives imports, with the DEA reportedly willing to accept the current Canadian standard of 10 ppm. The ONDCP was reportedly still set against any allowing any form of THC into the country; for its part, the U.S. military expressed its concern that personnel would use hemp to fail mandatory drug testing (See Latest ONDCP Position On Industrial Hemp in this issue). A second meeting was held on March 5th; results of this meeting are unknown.

As reported in US News and World Report, Some US Customs officials worry that prolonged ONDCP intransigence towards Canadian hemp will spark a trade war.

Meanwhile, the Canadian government, led on by the Depatment of Foreign Affairs and International Trade, has initiated a consultation process with the industry, beginning with a cross-country conference call on March 13^th. Government departments that participated included Agriculture Canada, Health Canada, Industry Canada, the Canadian embassy and members from the office of hemp advocate Senator Lorna Milne (L.- ONT) Industry participants were drawn from across the country. The call was made in an effort to find some sort of consensus.

Issues that arose in the discussion included monitoring ONDCP activities with the possible announcement of revised activity, and the development of tariff codes for hemp products that are not categorised to date.

"The ONDCP policy has been very unclear, " says DFAIT's Randy Nelson, referencing the US policy flip-flop on hemp products over the past year. "The Canadian government is keeping a close contact on it and the Canadian embassy in Washington is regularly contacting ONDCP and Customs officials."

Will stopped and seized products that are tested positive for THC be returned or will they be impounded or destroyed? Nelson says there are no clear answers to this question, and it is one he is aiming to get an answer on soon.

Other forms of federal support for the new industry were also discussed in the conference call, including support of market development activities and the creation of a national hemp association. "There was fairly broad support of the concept, " says Nelson of the NHA idea, " But there were questions about the mandate of such an association or who the membership base would be; there was no consensus. " He indicated that the government is now looking at various programs that are available that would be able to fund such a concept.

Nelson says that while the closed border issue may appear to be moving slowly, it is because most of the work being done has a low visibility. He says DFAIT is trying to get as many answers as they can in by mid-April to to guide farmers who are wondering how much hemp to plant this year. Decisions need to be made soon.

Companies and government's best defense in the ongoing trade dispute may be Canada's strict testing and regulatory program for industrial hemp and the high standards these have created.

A recent letter (Feb. 4^th) from the office of Canadian Senator Nick Taylor (L- Alberta), stated "It is important that proposed shipments declare their industrial hemp derivation, and declare that the shipment has been tested and does not contain any amounts of THC." The letter went on to say "A variation of the declaration, stating that the shipment has been tested and contains 0.00% THC has been acceptable to US Customs to date. We recognize the importance of resolving this situation in advance of preparations for the 2000 crop year. American authorities are aware of our views."

While the unclear border situation does pose some risk to Canadian companies looking to maintain or to increase their market share with their new hemp products, it doesn't worry some.

"I think (the border situation) IS resolved, " says Staines, likening border stoppages for hemp products to being on a level as vehicular stop checks. "Novelty attracts attention. Trying to get into their heads as to determine motivation (for the seizures) is pointless. US Customs is trying to protect their consumers. And that's fine."

4) Hemp Foods Study to be Released in May 2000

Results from the first systematic scientific study of the effects of hemp foods on the outcome of workplace drug tests will be released in May 2000. The study is sponsored by the North American Industrial Hemp Council (NAIHC), Manitoba's Agri-Food Research and Development Initiative (ARDI) and several North American producers and distributors of hemp products.

The study was conducted and designed by Leson Environmental Consulting, a Berkeley based research and consulting firm. The goal of this study is to scientifically evaluate the impact of hemp food consumption on urine THC levels and the answer the question: does the ingestion of today's hemp foods cause individuals to fail workplace drug tests for THC?

"Recent reports of false positive drug tests following consumption of hemp seed products have created significant confusion in the marketplace and with US governmental agencies about the safety of hemp foods vis-à-vis workplace drug tests, " says Bud Sholts, NAIHC chair." (The results of this study) will facilitate the establishment of a "safe" level below which false positive tests can be avoided, eliminate the uncertainty in the marketplace, and allow hemp foods to provide their nutritive benefits to consumers of natural foods in the US."

The study's results may have a considerable impact on the acceptability of hemp food products in the US market. The study involved 18 adult volunteers who followed a regimen of ingesting hemp oil containing various known levels of THC over 40 days, and periodically taking urine samples for THC analysis. An expert forensic toxicology laboratory conducted urine analysis.

Review of study design and results has been provided by a panel of prominent scientific advisors, including Dr. Kalant, Director of the Addiction Research Foundation at the University of Toronto, Dr. El Sohly, University of Mississippi, Dr. Paul Mahlberg, University of Indiana, and Dr. Alex Schauss, advisor to the NNFA on health and safety issues.

While hemp seeds themselves do not contain any THC (the main psychoactive ingredient in marijuana), trace quantities of THC from leaves and flowers rub onto the seed hulls during growing and processing. Thus hemp seed products contain minute quantities of THC. In Canada, the government has set a legal THC limit of 10 parts per million for hemp seed products (10 ppm) to address this issue.

The final study results will be posted in May 2000 at the North American Industrial Hemp Council's web site www.naihc.org .

The following is an evaluation of the existing North American marketplace for hemp seeds and derivatives. These figures were presented by Gero Leson (gleson@compuserve.com) at the recent Hemp 2000 conference, held in Winnipeg on March 1st, 2000.

Estimated North American Market for Hemp Seeds: 99-2000 year

Whole hemp seeds:
birdseed: 800 tonnes
toasted seed: 10 tonnes
hulled/shelled: 60 tonnes

Hemp Oil:
70 tonnes of seed for cosmetics
30 tonnes of seed for other food products

Estimated North American market for hemp seeds: 2002 year

Whole hemp seeds:
birdseed: 900 t.
toasted seed: 15 t.
shelled/hulled: 600 t.

Hemp Oil
cosmetics: 120 t.
food products: 50 t.

Estimated market for total hempseeds in 2002: 3-4000 t. of seed, assuming an extraction rate for oil of 25%.

6) MCIC Offers Crop Insurance For All Hemp Grain

This spring in Manitoba, Hemp grain joins Green Feed and Open Pollinated Corn as new insurable crops for 2000. According to the Manitoba Crop Insurance Corporation (MCIC), "all industrial hemp fields being grown for grain are eligible for reseeding benefits and 50% yield coverage."

Manitoba, after Ontario, are the only provinces that offer crop insurance for industrial hemp. In both cases, there is no coverage for fibre.

Verified historic yields will be used to provide individual coverage; provincial average yields will be used if a producer does not have any yield history. MCIC has settled on a provincial average yield of 560 lbs. or 0.254 tonnes per acre; coverage is based on a price forecast of 0.53 per Lb ($1168 per ton).

MCIC's Doug Wilcox notes that the price forecast, since it was set in December, is higher than the market is currently baring. "However, that could happen with any crop, " says Wilcox. "Anoher year we could have undercovered."

Full coverage deadline for seeding is June 10th; coverage will be reduced by 20% if seeded between June 11-15th.

For Disaster Insurance giving 50% yield coverage, farmers would receive dollar coverage of $148.34 per acre, with no producer premium required. The cost is borne by the Federal and Provincial governments.

Producers have the option of purchasing additional coverage up to the 70% level, giving them dollar coverage of $207.90 per acre. MCIC has set producer basic premiums at between $5.84- $8.65 per acre; this is dependent on risk area. Wilcox notes that because hemp is a new crop, coverage is not available at the 80% level.

MCIC also notes that the coverage will be written off if THC content of the field crop exceeds 0.3%.

For more information on exact premiums and coverage, contact MCIC at (204) 239-3246 or Fax at (204) 239-3401 or your local MCIC office.

HCFR Seed Guide 2000, Part II

Health Canada warns that "In both 1998 and 1999, a small percentage of reported test results for … Fedora 19, Futura, Kompolti and Uniko B were questionable. Elevated test results came mainly from test production." While these varieties are available for commercial purposes, an eye is being kept on them to determine the reason for the higher than 0.3% production in some cases.

No varieties are exempt from routine field testing or required sampling and tested. No seed on this year's list is to be double tested.

These capsule reviews represent an effort to account for some of the many strains that available for cultivation in Canada (for FIN 314, ANKA and Fasamo, please refer to our February issue). Sources include Ivan Bosca's Cultivation of Hemp, as well as some more recent made-in-Canada research. The HCFR welcomes more definitive information on any of these cultivars.

Breeding information has been excluded. Conditions and results may vary according to variations in latitude, soil conditions, seeding date and available rainfall. For more information contact your seed vendor, as well as consult with your provincial Ministry of Agriculture. Note that Kenex (www.kenex.com) has the largest variety of hemp planting seed that is available in country.

Note that fibre varieties and varieties grown specifically for fibre reach maturity within a 60-90 day range, and grain varieties will mature between 110-150 days. "Early" grain varieties are often well below that latter window.

THC content is important, especially for grain production. Recent research has demonstrated that higher THC levels in varieties have occurred in regions of lower latitude, up to as much as a 25% difference.

French

Ferimon - early maturing French variety. Low stalk and fibre yield, but good fibre content. Very good seed yield. THC measured at 0.075 % in 1999 N. Ontario trials

Fedora 19 - Medium maturing variety; stalk grows greater than 8', wide range of stalk yields, "mediocre fibre content" according to Bosca; high potential seed yield. Relatively early grain variety. THC content between 0.1%-0. 3% (ManAg 1997), but has been measured as lower (0.065-0.075) in Northern Ontario at 46° N. (Scheifele, 1999)

Felina 34 - early to mid-maturing variety suited for fibre and seed production. Stalk grows 8' +, Good potential stalk yield, good fibre content, very high seed yield. THC content in 0.1%-0. 3% range; lower in N. Ont. (<0.068)

Fedrina 74- late maturing, appropriate for "green" harvesting. Good stalk and fibre yield; low fibre quality. Stalk grows 8' tall, THC content typically in 0.1%-0.3% range; 0.07% in N. Ont. in 1999.

Fibrimon 56- information unavailable

Futura/Futura 77- latest maturing French variety, highest potential stalk yield; "mediocre" fibre content. Unsuitable for market seed production. Harvested green.

Hungarian:

Kompolti -very good fibre potential, maximum yield of 4.9-5.4 short tons per acre. Poor seed yield. As fibre hemp, its vegetative period is 110-115 days (late). Low THC content (0.1-0.15% but can go higher). High fibre content, 35-38% technical fibres. Tall heights (8'+). Earlier seeding dates gave the highest stalk yields with a 23% reduction of yield within a fortnight (May 14 to 28^th ) (Schiefele 1999) .

Uniko B- fibre hemp. Vegetative period is 105-110 days (late). Very good stalk yield 4.9-5.4 short tons per acre. Good fibre content but less than Kompolti. Tall stalks (8'+). Relatively higher THC content, but never exceeded 0.1% in 1999 Northern Ontario trials. Earlier seeding dates gave the highest stalk yields with a 23% reduction of yield within the period of a fortnight (May 14 to 28^th ) (Schiefele 1999).

Kompolti Hibrid TC- information unavailable

Kompolti Sargaszaru- information unavailable

Romanian:

Lovrin 110- vegetative period is 110-115 days (late for fibre). Good stalk yield (4-4.9 short tons per acre), low fibre content at 27-30%; good fibre quality. Tall heights (8'plus) . Higher THC content.

Ukrainian

Zolotonosha 11, Zolotonosha 13; medium length maturity, height approx. 7-8' medium stalk and seed yields. Low THC content, typically < 0.1%.

USO 14, USO 31; one of the larger seeds (Brolley, 1999); low THC content, typically <0.1%

Italian

C S, Carmagnola and Fibranova, while on the approved list of cultivars, are not known to be commercially available in Canada.

So you want to be a hemp farmer?
Some resources you may find useful

As of this writing, one of the best single documents dealing with industrial hemp production available is "Growing Industrial Hemp " which is available on the OMAFRA website (goto www.gov.on.ca/OMAFRA/english/crops/hort/hemp.html and search for "industrial hemp" to find this document). Produced by Bill Baxter and Gordon Scheifele in April 1999, the document runs through licensing, available varieties, soil conditions, seedbed preparation, requited climatic conditions, fertility requirements, methods of weed control, diseases and pests, yields, retting and turning, baling, storage, combining, and even the economics of production. Budget outlines for fibre and grain production are provided as a guide.

Other run-throughs on hemp farming worth looking at include:

• Peter Dragla's classic Farmer's Guide to Industrial Hemp, www.kenex.com/farmersguide.shtml
• Manitoba Agriculture's Industrial Hemp- Production and Management http://www.gov.mb.ca/agriculture/crops/hemp/bko01s00.html
• BC Ministry of Agriculture and Foods Fact Sheet on Industrial Hemp, prepared by Al Oliver and Howard Joynt http://www.agf.gov.bc.ca/croplive/plant/horticult/specialty/specialty.htm

Be forewarned that a successful license application also requires a criminal record check (contact your local law enforcement agency for cost and delivery period); applications to cultivate industrial hemp must also include GPS co-ordinates for satellite tracking. Some of the provincial associations (like the SHA) provide GPS co-ordinates as part of the membership fee. Or you can order your own kit and DIY (do-it-yourself). A really fine GPS and precision farming website is offered by Prairie Geomatics at www.prairie.mb.ca/index.htm

First time farmers must also gear themselves for field sampling and laboratory testing for THC levels as part of their licensing obligations. Check out HCFR #2 (June 1999) for a run through.

Market conditions vary immensely. It's advisable not to grow without a contract; growers who have grown on speculation have historically grown on love and hope and not profit.

For help or more information on hemp, contact Neils Hansen-Trip, Industrial Hemp Regulation Programme,
OFFICE OF CONTROLLED SUBSTANCES
Controlled Substances - Hemp/Regulations
18th Floor, Room 1815, 280 - Standard Life Centre
AL 3618 B
280 Slater Street
Ottawa, Ontario
K1A 1B9 (by courier: K1A 0K9!)

Tel: (613) 954-6524, FAX: (613) 941-5360 email: Hemp_BdsTpd@hc-sc.gc.ca or check out http://www.hc-sc.gc.ca/hpb-dgps/therapeut/htmleng/hemp.html .

Check out the comprehensive 1999 Canadian industrial hemp crop and market wrap-up prepared by  the Hemp Futures Study Group in the forthcoming issue of the Journal  the Interntional Hemp Association - (back issues online at www.HempCyberFarm).

______________________________________________________________________
© 1999-2000 AHEM, ARTHUR HANKS. INDIVIDUAL ARTICLES REMAIN PROPERTY OF THE AUTHOR (S). NOT TO BE DUPLICATED FOR FINANCIAL OR PERSONAL GAIN. CONTACT US ABOUT REPRODUCTION RIGHTS.