Hemp Growers Pursue Fibre Processing Plant

Hemp Growers Pursue Fibre Processing Plant
Posted by FoM on August 11, 2001 at 10:21:01 PT
By Ian Bell, Brandon Bureau
Source: Western Producer
A group of industrial hemp growers had some difficult decisions to make a year ago. Their dream of a hemp processing plant was in tatters following the demise of Consolidated Growers and Processors, a company that seemed determined to be a dominant player in Canada's hemp industry. When CGP collapsed last year, the growers found themselves sitting on mounds of unsold hemp seed and fibre. One option was to sell the seed and unprocessed fibre at any price and walk away from the hemp industry. 
The other option was to tough it out and rebuild the dream of a viable industrial hemp industry – complete with a processing plant – in the parkland region of western Manitoba. The growers decided to tough it out. "I guess we're stubborn farmers," says Joe Federowich, chair of the Parkland Industrial Hemp Growers Co-op, a group that planted 2,500 acres of hemp this year. "We're all getting together, putting our shoulders together and trying to push this thing through." Parkland Industrial Hemp Growers wants to build a $15 million hemp processing plant at Dauphin, Man. Completion of a business plan is expected by the end of August. No timeline has been set, but construction could begin as early as this fall. This is not the first time a hemp processing plant has been proposed for Dauphin. Two years ago, the community was enthusiastic when CGP said it would build a processing facility there. When CGP went bankrupt, it looked as though hope had been flushed away. Federowich is confident the new venture can flourish. It will be a locally driven effort that focuses on processing hemp fibre rather than the seed. Proponents envision a facility that would manufacture products such as matting materials and insulation. The processing plant would also refine fibre for export to other value-added manufacturers. "The fibre market is solid," said Federowich, a producer at Ashville, Man. "We're not going to flood the market overnight. That's for sure." Hemp fibre is strong and durable. Buyers are looking for a steady supply, which Federowich is confident his group can provide. Parkland region growers were in on the ground floor when Ottawa made it legal in 1998 to grow industrial hemp. Since then, they have gained knowledge and experience with the crop. "It's going to be a long, hard road," said Federowich. "It's not going to happen overnight. But we know what we want to do. We know what we need to do." The initiative has the support of the City of Dauphin and the surrounding rural municipality. The city and RM have committed 75 acres in their industrial park for the project. They will also help with infrastructure such as roads, sewer and water. "We're certainly excited and intrigued by the prospects," said Dauphin mayor Bill Nicholson, who credited the growers for their tenacity. "A flash in the pan is just that," the mayor said, alluding to the unfulfilled ambitions of CGP. "What we're looking for is something that's stable and sustainable." Manitoba agriculture minister Rosann Wowchuk is also enthused about the project. "There is potential and I hope to see this become a reality in the Dauphin area." Federowich said his group wants to raise $4 million in equity from local investors. Once the business plan is complete, the federal and provincial governments will be approached. Corporate investment might also be sought. Hemp Stockpiles Still Hurt Prospects Greg Herriott was nervous two years ago when Canada's hemp acreage surged to six times what it was the year before. Producers, especially those on the Prairies, were clamouring for a chance to grow the crop, hoping it would pay dividends that other crops would not. "A great many people rushed into the industry," said Herriott, president of Hempola, an Ontario processor of industrial hemp. "It was like the Yukon gold rush." But reality began to set in when Consolidated Growers and Processors, the company pushing the expansion, faltered and then collapsed in 2000. Growers who contracted with CGP suddenly found themselves without a buyer for their hemp. They were left with millions of kilograms of hemp grain that threatened to flood the market. "We kept our distance," said Herriott, considered a leader in producing and marketing hemp products. "We were kind of predicting what was going to happen and sure enough it did, unfortunately." The experience of CGP injected some sobriety into the industrial hemp industry. The message was clear: slow and steady would win the race. "For the people that are skilled at product development, there is still a tremendous amount of opportunity with hemp," said Sasha Przytyk, executive vice-president of Regina-based Gen-X Research, a company contracting production of organic and conventional hemp. But finding markets remains an uphill battle, said Przytyk. For now, the markets have not caught up with the supply of hemp grain. "There's still a surplus sitting there. That's just driving the price down." That message has reached producers, who grew far less hemp this year than they did two years ago. In 1999, Health Canada licensed the cultivation of more than 35,000 acres of industrial hemp across the country. Almost two-thirds of it was grown in Manitoba. This year 3,250 acres were licensed for hemp cultivation, less than a tenth of what was grown in 1999. Manitoba remains the leading producer with 1,165 licensed acres, according to Health Canada numbers compiled this spring. "This is where it should have been from the start," said René Saquet, a grower at Laurier, Man. "Last year, guys still went at it despite the lack of markets." Hemp production was prohibited in Canada in 1938 as part of an international battle against THC, an intoxicating component of marijuana. The prohibition was imposed despite the low levels of THC found in the leaves and flowering parts of industrial hemp. Health Canada's website says products made from the grain have no psychoactive effect. The prohibition on industrial hemp was relaxed briefly during the Second World War. In 1998, the federal government changed its laws restricting the cultivation of hemp, creating a chance to build a new industry around the crop. That opportunity was almost lost because of the rapid rise and fall of CGP, said Przytyk. "It just about ruined the industry before it got a chance to get going." The effects are still being felt. The Parkland Industrial Hemp Growers Co-operative grew hemp under contract with CGP before the company went into bankruptcy. Joe Federowich, chair of the co-op, said members have between 3.5 and four million pounds of seed and grain to sell. About a million pounds have already been sold. Co-op members are now wondering how low they should go on price to move the remaining product. "There are some offers on the table that are below our expectations," said Federowich, a producer at Ashville, Man. Saquet suggested the co-op may have to unload the seed and grain at fire sale prices so the glut stops weighing down markets. "It's value for crushing or whatever is going to be pretty well shot. I think it's only good for bird feed, if the buyers want it." The hemp growers co-op is now working on plans to build a fibre processing plant at Dauphin, Man. Saquet considers that a step in the right direction. He believes there should be more emphasis on developing markets for industrial hemp fibre. Source: Western Producer (CN SN)Author: Ian Bell, Brandon BureauPublished: Thursday, August 9, 2001Copyright: 2001 The Western ProducerContact: newsroom producer.comWebsite:'s Hemp Links Hemp Archives
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Comment #3 posted by meagain on August 12, 2001 at 10:38:22 PT
Hemp Hemp Hoorah
I agree BUY HEMP !  We want hemp products but the only way to buy them is mail-order here.
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Comment #2 posted by rabblerouser on August 12, 2001 at 03:53:59 PT
Help us HEMPYWON CANOBY, you're are only hope.
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Comment #1 posted by mayan on August 11, 2001 at 12:24:26 PT
"Slow & Steady"
Hemp is definitely going to go through some hard times. Look at soy beans. 25 years ago it was a niche crop. It took a while to develop an infrastructure & a market. A lot of people said it would never develop into a major commodity, but look at soy beans today! American companies are afraid to integrate hemp into their products because our government continuously holds up the shipments at customs...sometimes for months! Now the DEA is threatening to ban some hemp products. It is difficult to develop a market in such an uncertain regulatory climate. The U.S. governmeent, which is in the pockets of oil & energy companies, is afraid that hemp will become the next soy bean. The current low price of hemp may play into the farmers hands in the long run. Hopefully more companies will at least research & experiment with hemp while it is so cheap.I've also read about some folks trying to build a massive processing facility on Vancouver Island. Since hemp is virtually a reborn crop & the growing & processing technology still in it's infancy, it will take some time to catch up with other agricultural crops. The market is flooded because so many people saw the potential in hemp & when it was finally made legal everyone jumped on the bandwagon all at once. What is happening now is a result of this massive enthusiasm, but this crop has to come back down to earth & start from the ground up. "Slow & Steady" as was stated in the article.The best thing we can do as consumers is buy hemp products. If everyone bought just one hemp hat(shirt,shorts,etc.),then the U.S. government would see all of this money going north & would eventually want to get in on the action. Hemp is truly our only hope.
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