1	Hemp Seed Markets and Opportunities
2	What is Hemp Seed? Protein +/– 30% excellent dietary source of easily digestible, gluten-free protein Fatty Acids +/- 35% Essential Fatty Acids (EFA’s) +/- 30% 3:1 ratio omega-6: omega-3 gamma-linolenic acid (GLA) +/-3% stearidonic acid (SDA) Carbohydrates +/- 35% insoluble fiber +/- 30% soluble fiber +/- 3% sugars +/- 2%
3	Hemp Food Products Oil Nutritional Supplement Salad dressings, etc. Seed Cake Flour Animal feed Hemp Nut – hulled hemp seed Nutrition bars Nut butter Frozen desserts Prepared foods (pesto, salsa, …) Hemp ‘milk’ products Whole Seed Snack Food Animal Feed
4	Market Trends – Natural Products Natural and Organic foods Natural and organic foods and beverage categories are growing at more than 12%, outpacing sales of conventional grocery products by more than 4 to 1. American shoppers spent more than $42.8 billion on natural and organic products in 2003. Sales of organic products rose 19 percent in natural products stores in 2003. Healthy fats replacing trans fats headline issues such as trans fatty acids and the obesity epidemic have challenged consumer confidence in mainstream goods, contributing to slack sales. by January 2006, under new U.S. Food and Drug Administration regulations, all food marketers will have to disclose the level of trans fats in their packaged products.
5	Natural Products – body care Health and Beauty Care conventional products at zero growth while natural products growing at a more than 10%/year US Sales of organic personal care products grew by 81 percent in 2003 Natural/organic skincare, haircare and cosmetics items broke the $3.9 billion mark (US retail) in 2003, and are projected to hit $5.8 billion by 2008
6	Positioning Hemp in the U.S. Natural Products Market OPPORTUNITIES Canada is the principal supplier of hemp seed and derivative products to the US market good fit: EFA’s, protein, eco-friendly, organic production price becoming more competitive pent up demand for hemp products – especially CA hemp still has ‘wow’ factor – good PR opportunities RISKS Ongoing DEA opposition HIA’s successful court challenge of the DEA - decision permanently blocks DEA regulations that attempted to ban nutritious hemp foods International competition Health Canada’s 10ppm THC limit benefits Canadian suppliers imported whole seed must be sterilized certified organic production
7	Non-food Markets Hemp Seed Oil Personal Care Products claims that this accounts for about half of the world’s hemp production Industrial Oil Applications Varnishes, paints (competes with linseed oil) Seed Cake & Whole Seed Livestock Feed Poultry – especially organic Bird Seed * PRICE DRIVEN COMMODITIES*
8	Hemp Seed Production: Context Historically the cultivation of hemp primarily as an oilseed was largely unknown, except in Russia. “The short oil-seed hemp with slender stems, about 30 inches high, bearing compact clusters of seeds and maturing in 60 to 90 days, is of little value for fiber production, but the experimental plants, grown from seed imported from Russia, indicate that it may be valuable as an oil-seed crop to be harvested and threshed in the same manner as oil-seed flax.” Dewey, USDA (1914)
9	Hemp Seed Production: Current World Hemp Seed Production (1999-2003 average)* Area harvested 27,000 ha Production = 31,000 t Yield = 1150 kg/ha 80% China; 15% France Canadian Hemp Seed Production 1998-2004 1998 – 2400 ha 1999 – 14200 ha 2000 – 5500 ha 2001 – 1300 ha 2002 – 1500 ha 2003 – 2700 ha (10% of world total; organic seed sold out as of mid-year) 2004 – 6-8000 ha (estimate)
10	Flax Seed– a window into hemp’s potential Canadian Flax Seed Industry since 1994, Canada has been the world leader in the production and export of flax seed Canada produces approx. 40% of the world’s total flax production next largest producer is China at less than half the annual production Canada supplies approx. 60% of flax seed used in the US, and also has significant exports to Europe, Japan and South Korea Canadian Flax Stats average Canadian production of flax (1999-2003) = 755,000 t, produced on about 1.5 million acres (600,000 ha) Average yield = 1,137 kg/ha (approx 1,000 lbs/ac) vs. world average of 808 kg/ha (40% above average) Average price = U$242/t (ranging from U$193-$309/t)
11	Looking Forward Need for breeding European hemp varieties historically have been bred for fiber or to a lesser extent dual purpose (seed & fiber) only 6% of varieties grown in Canada are Canadian bred average hemp yields are still low compared to other commodity crops (i.e. flax) hemp has been less intensively bred than other crops and so retains a high level of genetic diversity opportunities exist to breed for specific properties (i.e. GLA, SDA) Current breeding projects for seed and fiber in Ontario and Western Canada
12	Breeding Programs Breeding objectives Increasing yields population type selection of elite populations select for uniform maturity hybridization agronomics Minimize THC content Regionally adapted
13	Market Development Product (not producer) driven grow existing hemp category develop new products and sub-categories (recent examples: hemp protein powder, hemp milk) focus on quality Co-operation continue to work together through trade organizations: Ontario Hemp Alliance, Canadian Hemp Trade Alliance, Hemp Industries Association continue to build consumer awareness – trade shows, media (co-op ads, PR, web) Explore new opportunities new markets (Europe, Asia,…) new applications (livestock feed,…)