The Hemp Commerce & Farming Report

Editorial
Top of the Crop
Developing markets for Hemp Seeds

The HCFR Interview: Gero Leson
Farmers: Keep Your Workers Happy!
Testing, Testing

The Nutritional Value of Hemp Oil: an Overview
Alphabet Soup: Hemp Associations
Hemp Shorts: Upcoming Industry Events
Marketplace

EDITORIAL

Forty days and forty nights later, here we are on our third issue, and it’s turning into a new publication already. Welcome to the new look HCFR; this is our first issue as a web-based publication. We will be posted initially at Hemptrade.com and Hemphasis.com. Being web-based gives us certain advantages over being a straight e-txt publication. We are evolving to better serve our readers and give them the best value that we can for our money. As always, we appreciate your comments even when we can’t write you back.

We have a number of strong contributions for this issue of the report, including pieces from John Roulac, Gero Leson, Dr. Alfred and Jon Cloud. It is gratifying to be able to work on this project with people of this calibre.

On another note, on a casual grocery trip this week, I did a double take in the refrigerated products section. I saw a new hemp oil (350ml) available at 12.30$ a bottle, next to two other familiar brands — this was a $6 savings from a few months ago. The same store I was in had at least half-dozen other hemp based products in stock, from chips to rella, to candles and soaps. The price points were all rather reasonable and in line with everything else offered by my organic grocer.

This is a quiet sign, but a good one. Sure hemp shorts are still ridiculously expensive from my point of view, but Canadian grown and made products are starting to reflect reality. Hemp is not just a good idea anymore trapped in the hemp store "ghetto" — it’s becoming a viable market choice at the point of sale.

I think we are on the right track.

Enjoy this issue.

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Earthemp Body Care products have now been launched. Formerly selling under the Earth Scents label, Earth Scents Soap Co.’s Suzanne and Bob Andrews are veterans in the manufacturing of naturally pure body care and handmade soap. The Simcoe, Ontario-based company has been producing hemp oil body care products for the past five years. In that time they have produced body care for a number of Canadian distributors and retailers. Among these was Hempola, Inc. of Mississauga, Ontario. These Earth Scents products were award winners for Hempola in Hemp Times magazine annual awards gala. Earthemp ended this private label relationship on May 29, 1999.

Suzanne and Bob Andrews of Earthemp are committed to expanding their extensive line of Hemp Oil based body care products. They are using Ontario-grown oil supplied by Pain Court’s Kenex Ltd., and attest to the improving quality of oils available on the marketplace. "We find the quality (of Kenex’s oils) to be far superior to the oils of the past, " says Suzanne Andrews, " We are assured of freshly pressed oil when we order."

As was reported in last issue’s "Cross-Canada Crop Report," a high amount of certified organic acreage is being grown across the county. Our estimate a month ago was that there could be up to 1500 planted this year. Well, that figure has been broken. Jon Cloud reports that Cloud Mountain has contracted 500 acres this year, mostly in Ontario with some additional acreage in Manitoba. Cloud says that the focus is on grain production, but there is also experimental research of ten acres for hemp fibre. As well, they are conducting six experiments with seeding rates for grains.

Sasha Prytyk of Gen-X clarifies that over two-thirds of their 900 contracted acres is being contracted for certified organic production, and not one-third as was reported.

Anita and Gordon Roddick, founders of international hair and bodycare retailers, The Bodyshop, have announced that they have recently acquired a significant interest in Chatham, Ontario’s Kenex Ltd. The Roddicks were attracted to invest in Kenex due to Kenex’s leadership position as the most diversified hemp company in Canada.

"I believe that most countries have suffered terribly from the loss of the small family farms that were once the agricultural backbone. They were a vital link in the economic chain, "says Anita Roddick, who says that hemp will play a large role in stimulating rural economic development.

Kenex is involved in the manufacturing of oil, meal, and sterilised grain as well as roasted and toasted hemp seed. Kenex was also the first Canadian company to set up a commercial hemp seed hulling operation in Canada.

As the Body Shop is already a major buyer of Canadian hemp seed and oils for their successful line of hemp bodycare products, this personal investment on the Roddick’s part will hopefully help stimulate research and production of the fibre side.

Beginning in 1995, Kenex has invested several years of R&D investigating hemp’s fibre options. Their fibre division is involved in the separation of fibre and core materials to provide clean fibre and core products for various industrial applications including moulded composites, paper, non-wovens, plastics, absorbants and animal bedding.

Kenex’s composites, non-woven and plastics divisions are supplied raw products from the fibre operation. The fibres, core or combination are blended in various formulations with synthetic fibres, other natural fibres, post-industrial plastics or other types of resins. These compounds are then formed into non-woven matting, which can be used as padding and sound insulation or moulded into various types of thermoset or thermoplastic panels. The pelletized compounds will be used in injection moulding and other types of thermoplastic applications.

Kenex also conducts a seed-breeding program with certified seed distribution across Canada. Their agricultural division contracts acreage with farmers and manages the custom harvesting operations including field quality control.

Source: Kenex Ltd.

Alterna Applied Research Laboratories, maker of Alterna-label hemp hair care products, has announced it will fund a $200, 000 field research project in the state of Hawaii. This research project, to be performed in co-operation with the University of Hawaii at Manoa, was announced July 7^th, shortly after the Hawaiian governor signed legislation that was passed earlier this year. Dr David West, Ph.D., noted plant breeder, author and hemp researcher, has been engaged to direct the hemp seed variety trial that is slated to begin this fall. And in a recent letter to a state legislator, the DEA hinted approval if an industrial hemp proposal addressed security and standards issues.

"Alterna feels a responsibility to help support America’s farmers and affording them the opportunity to grow industrial hemp for American made products is our ultimate goal, " says Mike Brady, President of Alterna.

Alterna’s contribution deepens its commitment to marketing hemp on a national scale. Since incorporating hemp seed oil into its products in January 1998, the Los Angeles- based company has undertaken a national hemp education and marketing campaign. As part of this program, Alterna conducts hemp essay contests in high schools nation-wide, with college scholarships as prizes. Concurrently, Alterna has also expanded its high profile and provocative advertising campaign to the East Coast, contracting 30 city busses on routes in downtown Boston. Alterna’s billboard image reads HEMP with an image of a green hemp leaf — "THC (Drug) free" is written below it next to a bottle of the hemp shampoo. The same ad has been banned in one other jurisdiction.

Sources: Alterna, Public Broadcast Network

After nine months of research, blending and testing at massage therapy clinics in Mississauga, Ontario, four new Hempola (™) Massage Oils are now ready for the market.

Hempola Inc. has been working in association with Beata Zaranek — a veteran massage therapist who originally trained in Poland — to develop the new massage oils. Zaranek and professional therapists at Mississauga's Injury Management Centre and the YMCA have designed and tested blends of Hempola hempseed oil, sunflower oil, grapeseed oil and various steam distilled essential oils to create the four most effective massage oils they have ever used. The therapists consider hempseed oil perfect as "carrier" oil because it is absorbed very quickly into the skin and has a superior penetrating capability, yet provides a desirable level of lubrication for effective massage treatment. This ensures both remedial efficacy of the hempseed oil itself and powerful therapeutic benefits from the blend of essential oils that it is "carrying".

Used in massage therapy, hemp oil’s EFAs penetrate the skin, remoisturizing and reviving dry cells and helping to repair damage whether caused by weather elements, poor nutrition disease or injury. Clinical studies have been undertaken to prove that topical application of EFAs markedly improves hydration and elasticity of the skin.

Source: Hempola

The growing awareness of hemp and the nutritional benefits of hemp seed is driving sales of hemp foods and body care products. The strongest demand is for hulled seed and oil. Until recently, these raw materials have been priced as boutique items — i.e. quite expensive with limited distribution and low sales volumes.

Supply
Canadian warehouses are still filled with hemp seeds from the 1998 crop. In 1999, Canadian farmers planted approximately 20,000 acres dedicated for grain or hemp seed. This may well lead to a new term for the fledgling hemp industry — long term storage trials. It will be interesting to watch how this huge increase in supply impacts market prices and demand. One of the significant challenges and opportunities for hemp farmers and the hemp industry in general is to avoid entering into the below production cost model of wheat, corn and soybeans. Clearly, decentralised regional processors and farmer co-ops need to add value thus increasing profitability. One likely change in year 2000 plantings will be a greater ratio of certified organic hemp seed vs. non-organic. Demand for organic food is skyrocketing in North America.

Hanf Nut
Much of the success of the North American hemp industry is due to the pioneering efforts of German hemp advocates and entrepreneurs. In 1996/97, several pioneering German companies developed a process to shell the hemp seed, yielding "Hanfnuss", or hemp nut in English. Several firms, including an American one, private-labelled hemp nut and imported it into America. The advent of hulled hemp seeds from Germany has been opening up vast applications for the food industry. These tasty nuts are now appearing in nutritional bars, nut butters, pretzels, cookies, yoghurts and in bulk refrigerated sections as well as grocery shelves packed in tin cans.

In early 1999, Kenex of Pain Court, Ontario set up the first dehulling facility in Canada. Several firms have now followed, including CGP.

Hemp Oil
Hemp oil is now found increasingly in the refrigerated section in natural food stores. Natural oil suppliers targeting the body care industry offer oil by the pail and drum. Almost daily I now hear of some new company that is manufacturing hemp-based soaps, shampoos, lotions, salves or creams. The huge success of the Body Shop’s hemp line points to increasing acceptance in the mainstream marketplace. Hemp pioneer Hempola, of Mississauga, Ontario, introduced a delicious hemp salad dressing at the March 1999 Anaheim Natural Products Expo show.

Education
The key to increasing markets for hemp seed is educating people on the benefits of hemp and expanding the market versus just dumping seed on the marketplace and hoping that price alone will carry the day. Our industry's initial efforts have helped to build a small yet growing base of informed consumers and manufacturers. For example, the North American Industrial Hemp Council (NAIHC) has exhibited at the last two Natural Products Expo shows in Anaheim and Baltimore to promote hemp and its member firms. This has allowed thousands of natural food retailers, manufacturers, distributors and media to learn about hemp's unique benefits. NAIHC sponsored its first annual hemp foods banquet at its November 1998 Washington DC annual conference and trade show. A delicious hemp foods meal was prepared by the Crown Plaza’s kitchen under the guidance of Richard Rose of the HempNut Corporation. I personally enjoyed listening to Ralph Nader crack jokes about US federal policy on hemp while sitting next to former CIA Director James Woolsey who was laughing between mouthfuls of a tasty hemp meal topped off with hemp chocolate.

HEMPBROKERS.com
In late 1998, Kenex approached HEMPTECH — the Sebastopol, CA based Industrial Hemp Information Network — to assist them in expanding markets for hemp seeds in the United States. We were honoured at the opportunity to work with one of Canada’s leading pioneering hemp firms. In March 1999, HEMPTECH launched HEMPBROKERS.com with a mission to expand markets for hemp seed products. Our initial market research of manufacturers and restaurants indicated that the previously high price for hulled seeds was prohibitive and that lower prices would encourage greater use. We set up a refrigerated distribution center in LA County (California) and stocked a range of hemp seed products including hulled, oil, meal, toasted and roasted seeds. In a few short months we are now selling in bulk to dozens of natural food stores, restaurants and supplying manufacturers of beer, beverages, nut butters and body care. HEMPBROKERS.com and Kenex also gave out over 800 copies of Hemp Foods & Oil for Health: Your Guide to Cooking, Nutrition and Body Care by Gero Leson, Petra Pless with John W. Roulac to the Natural Product Expo attendees. We are also sending out 100+ copies each week to health food stores as part of our marketing campaign.

We also launched a consumer brand — Nutiva — with a snack bar made from four seeds — sunflower, hulled hemp seeds, flax, pumpkin — plus honey. The response to these bars has been quite positive. Sales have surpassed 30,000 in the first 100 days. We currently sell to 500+ natural food stores, gas stations and even supermarkets. We expect to surpass 100,000 bar sales before the end of summer and 1,000,000 in year 2000. Our Nutiva bar is now the number one selling North American hemp foods product based on sales unit.

While genetically modified organisms (GMO) have been a huge issue in Britain and throughout Europe, it has been relatively ignored for the most part in North America. The majority of corn and soybeans today are grown with GMO seeds. The recent study on Monarch butterflies has intensified the GMO debate. This Cornell University study showed that Monarch butterflies are dying by eating insects which had been feeding from Monsanto bio-engineered corn containing BT genes. Growing numbers of American consumers and manufacturers are re-evaluating their use of GMO products, especially soy products. This development will accelerate the opportunity of non-GMO hemp as an eco-friendly food source.

Of course, larger Ag firms entering the hemp field may well develop GMO hemp. The GMO issue is moving center stage as consumers become educated and the pressure builds to label GMO foods. Non-GMO hemp foods may just be the horse to bet on!

The following is excerpted from "Hemp Foods & Oil For Health" by Leson & Pless with Roulac:

The Future of Hemp Foods
"Hemp foods must meet a few challenges before they can expand beyond their current niches. To start with, the price of hemp seeds and their products will gradually have to come down. This will be accomplished by increasing sales volumes and the resulting economies of scale in farming, processing, and distribution. More efficient processing and marketing of hemp fibres and hurds will also be crucial, so that farmers can reduce the cost of seeds."

"Improving the properties of hemp seeds through breeding will make them more competitive in several areas. Larger seeds will improve the efficiency of the hulling process, thus making hulled seeds more cost-competitive. Breeding varieties for a higher content of specific fatty acids such as GLA will make hemp oil more competitive as a food supplement, while raising the antioxidant levels in hemp seeds will increase the shelf life of hemp oil and foods. Finally, more hemp seed research is needed in such areas as additional potential health benefits, the nature and effects of phytosterols, and the amino acid spectrum of different varieties."

"Increasingly, hemp seed will replace beans, nuts, grain, and dairy products in numerous foods. By successfully meeting the challenges mentioned above, hemp seeds and their oil may well become a main staple for the expanding natural-foods industry."