Demand for pot edibles such as gummies has risen during the pandemic, as people stuck at home turn to cannabis-related products for relaxation and entertainment.

“The categories that resonate the most with consumers, particularly in THC space are gummies and beverages, we continue to look at other ways of consumption but these two seem to be the ones that are taking off,” Canopy CEO David Klein told Reuters.

Tetrahydrocannabinol or THC is the ingredient in marijuana that gets users ‘high.’

Wana sells gummies in the U.S. state of Colorado and licenses its intellectual property to partners who manufacture, distribute and sell Wana-branded gummies in states including California, Arizona, Illinois, Michigan and Florida.

Canadian pot producers are looking at cross-border expansion, as the industry has garnered investor interest with some U.S. states legalizing pot and on increased expectations for federal marijuana reform.

“We remain more bullish than others in the regulatory front and feel that our ecosystem in the U.S. is strong enough to grow even without federal permissibility happening in the short term,” Klein added.

U.S.-listed shares of Smiths Falls, Ont.-based Canopy, down 46 per cent so far this year, rose nearly two per cent to US$13.55 in premarket trade.

The acquisition will provide Canopy access to Wana’s vertically integrated facility in Colorado and its licensing division, the company said, adding that it would continue operating independently in the state until the deal closes.

The transaction is structured as three separate option agreements allowing Canopy Growth a call option to acquire 100 per cent of the membership interests in each Wana entity, the company said in its statement.

— Reporting for Reuters by Rithika Krishna in Bangalore.

The post Canopy eyes U.S. expansion via weed gummies maker appeared first on Grainews.

Nearly 11 months after regulators allowed their sales, very few brands have been able to reach shelves.

Canada at the start of this year allowed sales of so-called ‘Cannabis 2.0’ products, which include edibles, vapes and drinks. The products have been a big hit with customers during coronavirus-induced lockdowns, but producers have struggled to maintain timelines for the launch of the THC beverages.

Analysts and industry insiders had eagerly anticipated these beverages, hoping they would attract large swathes of the public to pot from booze, and bring back investor dollars after the industry fell out of favor due to a lack of profitability.

Common production challenges include short shelf-life, maintaining a consistent taste, inconsistent potency, and the length of time it takes to achieve the desired “high,” said Karan Wadhera, managing partner at cannabis venture capital firm Casa Verde Capital.

“There are also high production costs, expensive distribution, and a lack of dispensary infrastructure to intake and display the products,” he added, referring to cannabis shops without loading docks or refrigerators.

The COVID-19 pandemic has made funds even more scarce for a sector that has disappointed the market with missed financial targets and many producers forced to withdraw dollars from developmental products that promise future profits to focus on maintaining the core business.

“This is certainly true of Canadian LPs (licensed producers) who have had massive layoffs and reductions of production,” said Medical Marijuana Inc. CEO Stuart Titus.

“The drop-off in investor capital has also had a negative effect on product development, so the supply of effective cannabis-based beverages remains relatively small,” he added.

Getting it right

Technical issues involving basic chemistry have also slowed bringing some of these THC-infused beverages to market.

Most cannabinoids are insoluble in water, explained Joshua Swider, co-founder and CEO of Infinite Chemical Analysis Labs (InfiniteCAL).

To overcome that issue, companies use emulsions. But even if they can make an emulsion that gets the high-inducing cannabinoids to properly mix with the beverage, maintaining that mix is itself a challenge.

InfiniteCAL said its tests show some beverages can degrade in as little as a few days, leaving the THC that induces the desired high stuck to the can liner lowering the drink’s potency.

“Everyone has really great ideas in this market, but people are coming to find that actually executing the idea is much more difficult,” said Narmin Jarrous, vice president at Exclusive Brands, a Michigan-based cannabis retailer.

Despite facing its own challenges and delays putting beverages on the shelves, Canopy Growth Corp., the largest pot producer by market value, has established a strong foothold.

The company had planned to launch its drinks in January, when sales were first authorized in Canada, but scaling up production and other issues delayed their introduction.

With backing from Corona beer-maker Constellation Brands, Canopy’s products did hit the market in March, well before major rivals got there. It now controls more than 70 per cent of the cannabis-infused drinks market, a company spokeswoman said.

The company has sold close to two million cans of its THC-infused beverages in Canada since March. The top three cannabis beverages in Canada are all Canopy products, the spokeswoman added.

CEO David Klein, a Constellation veteran who took on the top role at Canopy in December, told investors in August the company expected to double its drinks output for that month after having already doubled it the previous month.

The company announced plans this month to begin selling the products in the U.S. next summer, initially launching THC-beverages in the fast-growing California and Illinois markets through a partnership with New York-based Acreage Holdings.

“Given the choice of a traditional alcoholic beverage and a THC-infused beverage, I believe that THC beverages would rival alcoholic beverages for their popularity with consumers,” Titus said.

— Shariq Khan reports on North America’s resource and energy sectors for Reuters from Bangalore.

The post Cannabis-infused drinks fizzle on production, distribution challenges appeared first on Grainews.

The U.S. Centers for Disease Control and Prevention (CDC) said on Friday that an investigation into 805 confirmed or probable cases of vaping-related respiratory illnesses suggested that products containing THC, the psychoactive element in cannabis, likely played a role.

The heightened health concerns come at a time when Canadian cannabis companies, whose share prices have tumbled over disappointing sales and supply and quality hiccups, are investing millions of dollars into marijuana derivatives, including vape products.

While keeping a wary eye on U.S. developments, they are betting that already strict Canadian regulations will ensure the safety of their products.

The Horizons Marijuana Life Sciences Index ETF has dropped 54 per cent since its Oct. 16 peak, the day before adult recreational use of cannabis flower and THC and CBD oils were legalized. CBD does not contain the compound that gets people high.

The vaping concerns have contributed to recent declines, and will continue to hurt shares, said Bruce Campbell, portfolio manager at Stonecastle Investment Management, which invests in cannabis stocks.

“It’s a case of ‘shoot first, ask questions later’,” he said. “(Investors) probably do some quick back-of-the-envelope math and say, ‘we’re not going to see the sales we expected, so we’re out’.”

Analysts estimate that in some established U.S. markets, vape sales are down as much as 30 per cent, with many marijuana consumers reverting to use of less profitable flower and oil products.

While a shift away from Canada’s illicit cannabis vape market into legal dried flower is positive from a public health standpoint, prolonged uncertainty could hurt legal vape sales.

“These illnesses… occurred using non-regulated products,” said Jason Zandberg, research analyst at investment dealer PI Financial.

Investigators have pointed to vaping products containing THC or vitamin E acetate, a thickening agent often mixed with THC oil in the illicit market, as possible causes of the rash of serious lung problems.

“In theory, it should promote the legal market,” Zandberg said. “But if you don’t have very aggressive education behind these products, a good portion of the population doesn’t see the difference.”

The regulations that take effect on Oct. 17 take into account the emerging health risks associated with cannabis vaping. They prohibit additives including vitamins and colouring agents, Health Canada, which regulates cannabis producers, said in an email.

The health agency added that it is monitoring the situation, and will take additional action if needed.

“The Canadian government should come out as soon as possible one way or other and either double down on vape products or remove them from the derivatives market. You have to give the industry clarity,” said Brett Hundley, a cannabis analyst at Seaport Global.

If the government suddenly removes vape products from the roster of expanded legal cannabis offerings, including edibles and extracts, “that’s going to reverberate back through the supply chain and it’s going to lead to a whole host of near-term issues” for these companies, Hundley said.

Cannabis companies are trusting that adhering to Health Canada’s rules will provide reassurance for investors and consumers.

A spokesman for Canopy Growth Corp., Canada’s biggest cannabis producer, in an email, pointed to the importance of the regulatory frameworks for cannabis vape products that Canada has in place.

Hexo Corp., another Canadian company with a variety of cannabis products, said it is focused on ensuring it is compliant with Health Canada’s regulations. Hexo is double testing its vape products, James McMillan, vice-president of business development, said in a phone interview.

— Reporting for Reuters by Nichola Saminather in Toronto.

The post Vape product concerns weigh on cannabis companies appeared first on Grainews.

Health Canada on Friday announced amendments to the Cannabis Regulations will be published June 26 to come into force Oct. 17, laying out rules for legal production and sale of edible cannabis, cannabis extracts and cannabis-based topicals.

The new rules “seek to reduce the health risks of these cannabis products” while “provid(ing) for a broad diversity of cannabis products, which will help displace the illegal market.”

A “limited selection” of products is expected to appear gradually in physical or online stores no earlier than mid-December, Health Canada said. Federal licence holders must give 60 days’ notice of intent to sell new products.

Also, Health Canada said, federally licensed processors “will need time to become familiar with and prepare to comply with the new rules and to produce new products” while authorized distributors and retailers will also need time to buy or obtain the new products and make them available for sale.

For edibles, the new rules put a cap of 10 milligrams per individual package on the amount of THC (tetrahydrocannabinol, the main psychoactive ingredient in marijuana).

The new rules for edibles also prohibit production of food and cannabis in the same facility and impose further manufacturing controls to limit the risk of foodborne illness and control product quality.

Edibles, topicals and extracts will all require plain and child-resistant packaging which displays the standardized cannabis symbol and a health warning message. Label claims alleging health or nutritional benefits are prohibited.

For extracts, the new rules will limit THC to 10 mg per unit, such as a single capsule. The total limit of THC per package of extract will be capped at 1,000 mg — for example, a package could contain one hundred 10-mg capsules.

The rules will also prohibit use of “certain ingredients that could appeal to young persons, such as sweeteners and colourants, or ingredients that could increase the appeal of cannabis extracts.”

As with vaping products, the new rules for extracts will also block certain flavours that are appealing to young persons from being displayed on a product label.

The rules for topicals, meanwhile, will also limit the total THC content per package at 1,000 mg and will restrict use of “certain types” of ingredients. Any label claims alleging “health or cosmetic benefits” are also prohibited for topicals.

Health Canada said it will begin approving amendments to individual federal licences to authorize production and sale of the new products — and begin reviewing notifications from licensees for those products — when the amended regulations come into force Oct. 17.

The Canadian Health Food Association, in a separate release Friday, said that by focusing on recreational THC-based edibles and other wares, the upcoming federal rules are “another example of the government taking steps to make it easier to get high and not to get well.”

Canadian consumers, the association said, want access to the CBD (cannabidiol) in cannabis for its “non-intoxicating health benefits,” but Canada is “currently missing the boat on innovation in the health sector with a strict focus on the recreational market.”

CBD is another major active ingredient in cannabis but, unlike THC, doesn’t produce “highs” in humans. CBD’s proponents have touted its properties for potential use in treatments for chronic pain, insomnia, anxiety and epilepsy symptoms. — Glacier FarmMedia Network

The post Cannabis edibles clear for legal launch before year-end appeared first on Grainews.

The deal comes after the U.S. farm bill, which legalized commercial production of hemp in the country, opened access to a large market for Nanaimo, B.C.-based Tilray and its peers.

Winnipeg-based Manitoba Harvest, majority-owned by Compass Group Diversified Holdings, and Tilray will develop wellness products and hemp-based consumer food products.

Manitoba Harvest’s product lines include Hemp Hearts, Hemp Oil, Hemp Yeah granola and protein powder and Hemp Bliss milk, plus a new Hemp Yeah wellness bar the company said it plans to launch in North America this summer.

Hemp is a type of cannabis plant with no or extremely low concentrations of the psychoactive compound known as THC, the ingredient in marijuana associated with “high” feelings.

The cash and stock deal helps Tilray expand beyond the food category, including extracts giving access to a broad portfolio of products currently distributed in 16,000 stores across North America said analysts at Cowen and Co.

Tilray said the deal will bring Manitoba Harvest expertise in working with cannabinoids, including cannabidiol (CBD) while allowing Tilray to “accelerate” its expansion into the U.S. and Canadian markets for CBD products where legal.

Tilray will initially pay $277.5 million in cash and stock at the close of the deal, expected within the next 30 days. The remainder will be paid six months after closing and on achieving certain milestones.

Compass Diversified Holdings’ shares were also up three per cent at $16.15.

— Reporting for Reuters by Shanti S Nair in Bangalore. Includes files from Glacier FarmMedia Network staff.

The post Tilray to buy hemp food maker Manitoba Harvest appeared first on Grainews.

The alliance, the latest in a string of deals by global alcohol and tobacco giants in Canada’s cannabis sector, comes amid booming demand for cannabis and a long-term decline in alcohol consumption and smoking.

AB InBev’s Labatt Breweries of Canada, which makes such brands as Blue, 50, Alexander Keith’s, Kokanee and Budweiser, will work with Tilray’s Canadian cannabis subsidiary, High Park Co., which develops and sells cannabis products in Canada, the companies said in a statement.

Canada, which became the world’s first major country to fully legalize the recreational use of cannabis in October, is expected to approve cannabis-based products including beverages and edibles in October 2019.

“It’s too early to know how big cannabinoid-based beverages will be but we think it’s a massive opportunity and it’s something we’re interested in investing aggressively in,” Tilray CEO Brendan Kennedy told Reuters Wednesday.

AB InBev and Tilray said they each plan to invest up to $50 million to research drinks with cannabidiol (CBD), a component of cannabis that does not cause intoxication, and tetrahydrocannabinol (THC), the substance that makes people high (all figures US$).

Discussions about commercialization are likely to follow, and Tilray’s objective is to have beverages ready when they become legal in Canada, Kennedy said.

A gradual increase in legalized recreational use of cannabis for adults in U.S. states and in medical cannabis around the world has sparked investment and partnership deals for Canadian companies.

On Tuesday, Tilray said it will work with Sandoz, a unit of Swiss drug company Novartis, to develop and distribute medical marijuana worldwide.

Tilray is also exploring opportunities to make acquisitions in 2019, both within and outside the cannabis space, Kennedy said.

In the cannabis industry’s largest investment, Corona beer maker Constellation Brands added $4 billion to its $200 million investment in Canopy Growth in August to help fund the Canadian cannabis producer’s global expansion.

In a more modest deal that same month, Molson Coors, the No. 2 beer maker in North America, struck a Canadian joint venture with marijuana producer Hexo Corp. to make cannabis drinks.

In the tobacco industry’s first major foray into cannabis, Altria Group said this month it would invest $1.8 billion in Cronos Group for up to 55 per cent of the Canadian cannabis producer.

— Reporting for Reuters by Susan Taylor and Nichola Saminather in Toronto.

The post Labatt to partner with Tilray to tap cannabis drink market appeared first on Grainews.

The day was historic for the country as Canadian adults can now legally smoke recreational marijuana after nearly a century-long ban. But provinces and businesses have struggled to prepare, and legalization was pushed back from a July start to enable setting up distribution and sales networks.

Despite the early problems, the move is a political win for Prime Minister Justin Trudeau, who vowed to legalize cannabis during his 2015 election campaign. The pledge was aimed at taking profits away from organized crime and regulating the production, distribution and consumption of a product that millions of Canadians consume illegally.

“The prohibition on marijuana has not worked in this country,” Trudeau told reporters in Ottawa. “Young Canadians have the highest usage of marijuana anywhere in the world… criminal organizations and street gangs make over $6 billion a year on the sale of marijuana across the country… That needs to stop and that’s exactly what we have done.”

The federal government and many provinces have been cautious, starting with limited stores and products, including no edible cannabis products for a year, and tight control over supply.

In many parts of the country, particularly those with few stores, much of the legal sales action was online, as consumers flocked to websites run by provincial governments and licensed retailers to buy legally, despite a few days’ wait for delivery and extra charges.

The online stores using Shopify’s e-commerce software across the country were processing more than 100 orders a minute, and had millions of visitors in the first 12 hours, an external spokeswoman said. Some websites ran out of popular products.

“What changes is that now I can use it openly, without people coming and challenging my right to use it,” said Peter Hasek, a music teacher who grows the plant at home and was attending an end-of-prohibition party at a downtown Toronto coffee shop.

To him, that is more important than access to legal product, he said.

Not your typical stoners

Ontario, home to Canada’s most populous city, Toronto, will have no stores until April 2019 due to a change in the province’s retail model by a new provincial government.

British Columbia will have both private and government stores, but has yet to issue any private licenses. In Vancouver, the City Cannabis Co. dispensary, which is licensed by the city and awaiting provincial retail approval, was still operating, despite a government suggestion earlier this week that existing “gray market” shops close until fully licensed.

Consultants in pressed black aprons served a mostly older clientele browsing varieties of dried cannabis and bottles of tinctures.

“Most of our customers are professionals, not your typical stoners,” said general manager Alex Orantes.

In Kamloops, at British Columbia’s only legal shop open and run by the government, a line started forming at 6 a.m., CBC reported.

Marijuana enthusiasts in St. John’s, N.L. kicked off legal sales at midnight, with over 100 people lining up outside a Tweed-branded store owned by Canopy Growth Corp .

Canopy CEO Bruce Linton rang in the first sales to residents Ian Power and Nikki Rose.

Shares of Canadian cannabis companies retreated on Wednesday after rallying in the run-up to legalization. Canopy and Aurora Cannabis, the world’s two biggest cannabis producers, closed down 4.3 per cent and 2.9 per cent, respectively, after touching all-time highs on Tuesday.

Even in provinces with more shops, many shelves are expected to soon be empty because of a shortage of product. A study by the University of Waterloo and the C.D. Howe Institute economic policy think tank found legal supply will satisfy less than 60 per cent of demand in the early months, although that will change as production increases.

Police ‘not champing at the bit’

Separately, Public Safety Minister Ralph Goodale on Wednesday said the government would waive the fee and waiting period when people who have been convicted of possession of up to 30 grams of marijuana apply for pardons, after they’ve served their sentences. The legislation will be introduced by the end of the year, he said.

Law enforcement of those driving under the influence of marijuana could be patchy. In August, Canada approved a device to detect levels of tetrahydrocannabinol (THC), the psychoactive element in cannabis, in a driver’s saliva.

But many large police departments will forego the $5,000 device, Adam Palmer, president of the Canadian Association of Chiefs of Police, told reporters on Monday.

Draeger Safety Canada, which makes the device, has shipped some units, but a two-week federal funding delay has put further orders on hold. It expects demand for between 300 and 500 units through March, managing director Rob Clark said.

Canada has invested $274 million to enforce new laws and some provinces have allocated their own funding, but Palmer said police will not crack down on illegal stores right away.

“When the law changes on the 17th, we’re not going to see a big change overnight,” Palmer said. “Police aren’t … champing at the bit to go out and start raiding stores.”

— Reporting for Reuters by Nichola Saminather in Toronto and Julie Gordon in Vancouver; additional reporting by Chris Wattie in St. John’s, Rod Nickel in Winnipeg and David Ljunggren in Ottawa.

The post Sober start as recreational marijuana becomes legal in Canada appeared first on Grainews.

Ted Haney, executive director of the Canadian Hemp Trade Alliance, said hemp growers are going through a year in which they are learning how to work with new rules brought in this August.

Those rules permit hemp growers to sell hemp plants’ leaves, buds and flowers, which in the past they would have blown out the backs of their combines as chaff.

The next step, Haney said, is getting government to remove the restrictions that require these products to be handled only by licensed dealers.

Hemp-derived cannabidiol (CBD) should be handled differently than the product containing THC, but Health Canada currently treats them the same, he said.

“Yet the risk profiles of the products are so dramatically different that it, from our perspective, is not a common-sense approach,” he said.

“So that’s a very narrow, very conservative and very risk-adverse, precautionary principle approach to regulation.”

The common sense approach would allow for CBD extraction in both streams, he said, with hemp-derived CBD to be guided by regulations for food and supplements.

Oct. 17 marks the first day on which hemp growers have been allowed to deliver the buds, flowers and leaves they collected, as regulations surrounding the legalization of recreational cannabis take effect.

Growers are permitted to sell those products only to licensed processors certified to handle regular cannabis, even though hemp contains less than 0.3 per cent THC, the chemical that produces the high effect.

“There were several large, small and medium producers who did harvest the chaff this year. Others are still in harvest as we speak because of the snow and the rain,” said Haney.

The leaf, bud and flower parts of the plant are sought after for their CBD, or cannabidiol, a naturally occurring compound in hemp.

The term cannabinoid refers to several naturally occurring compounds in the plants, including cannabidiol and THC. CBD is used in medical marijuana, in combination with THC, in drops and other delivery forms to treat pain, anxiety, as a sleep aid and as an anti-inflammatory.

Hemp-derived CBD is used as a health food ingredient, with no specific health claims, in bars, supplements, cereals and other products.

Haney said the lengthy and expensive process for processors to get proper licensing, and the added security costs required for producers and processors of THC-containing products, are unnecessary for the hemp-derived products.

The hemp industry, he said, plans to make its position clear during Health Canada’s public consultation period on cannabis edibles, which are slated to become legal next year.

Meanwhile, this year’s hemp harvest was a patchwork affair, with areas in the south under irrigation producing good crops. Producers in those areas were also fortunate enough to get their harvest in before the heavy rain and snow hit in September.

Areas north of Highway 16 are a different story, Haney said. A lot of hemp remains standing in fields in those regions.

As well, the growing season was marked with spotty rains and drought, he said.

“Overall, I think the crop is going to be somewhat down, assuredly so, because of the difficult harvest.”

— Terry Fries writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

Table: Hemp seeded acreage for 2017

Source: Canadian Hemp Trade Alliance

The post Cannabis’ cousin hemp entering new age too appeared first on Grainews.

“There’s lots of discussion with things changing in the marijuana arena; hemp also falls in that cannabis space,” said Kim Shukla, executive director of the Canadian Hemp Trade Alliance (CHTA) at Steinbach, Man.

While hemp is a distinctly different crop, the industry is anxiously waiting to see what will happen with regulations in relation to marijuana, she said.

“We are anticipating — hopeful — that there may be some improvements made to the administrative end of the paper work for the coming year.”

In August, Health Canada changed legislation to allow medical marijuana users to home-grow their own marijuana, a move that is expected to precede bigger policy changes next year.

The governing Liberal party also campaigned on a promise to legalize and regulate marijuana.

Industrial hemp plants contain low levels, about 0.3 per cent, of the psychoactive ingredient THC. Marijuana plants typically contain five per cent or more.

Canadian hemp growers are only permitted to use certain parts — the stalk and seeds — of the plants they grow, and industry participants have said in the past that regulations limit market opportunity.

“There haven’t been any changes, but we’re optimistic, probably more so than we’ve ever been, as far as some pending improvements to working with Health Canada,” Shukla said.

Hemp acres were lower this year, to correct the high leftover volume from the 2014-15 crop year. Shukla estimated there were about 30,000 acres contracted in 2016.

“The weather has not been that co-operative; hemp is one of the last crops to be harvested, so we still have some crop out in the field in Saskatchewan and Alberta,” she said.

Crop could be damaged by sprouting due to excess moisture.

Demand for Canadian hemp from South Korea has increased exponentially, as exports to the country have grown about 2,922 per cent from 2015 to 2016, according to data from Statistics Canada and CATSNET Analytics compiled and provided by CHTA.

“That South Korean market has really taken off for us,” Shukla said.

Looking to next year, processors are looking to contract an increased amount of acres to meet demand, with early estimates between 125,000 and 150,000 acres.

“The processors really seem to be stepping up to be able to manage, and I’m hoping that through the year we’ll be able to have some new folks coming on.”

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

The post End of reefer madness could clear air for Canadian hemp appeared first on Grainews.

“The doors have blown off the market in Korea for hemp,” said Kim Shukla, executive director of the Canadian Hemp Trade Alliance at Steinbach, Man.

Six months ago, South Korea was unknown as a market for Canadian hemp; now, “that market requirement is outstripping the requirements for the U.S.,” said Shukla. A promotion on a home shopping channel in South Korea led to sales of 40,000 pounds of hempseed in one hour, according to reports.

Before South Korea materialized with an appetite for Canadian hemp, Canada had been sitting on ample old-crop supplies and contracted acres were down “as this was going to be a clean-up year,” said Shukla.

“Now, we’re beginning to think that we will need to plant more seed to meet the market demand,” she said.

However, the regulations in place for growing hemp are hampering a quick increase in acres, as farmers are unable to get licensed in time.

Due to industrial hemp’s association with its cousin marijuana, farmers need to be licensed through Health Canada and pass a criminal record check in order to grow the crop. Testing is also required to confirm levels of THC, the psychoactive ingredient in marijuana, are below the allowable 0.3 per cent.

After growing about 85,000 acres of hemp in 2015, Shukla estimated that acres may be down to only 30,000 in 2016.

“We could turn around on a dime, and get a whole bunch of guys to put hemp in the ground if we didn’t have that issue,” said Shukla, adding that planted area could easily have topped 100,000 acres given the changes on the demand front.

The CHTA has been working to reduce some of the red tape surrounding hemp production, but has so far not made much headway with Health Canada.

“We went from zero to 100 miles per hour,” said Craig Goodwin, CEO, director and co-founder of B.C.-based hemp company Natural Splendid Enterprises (NSE), on the demand from Korea.

NSE originally expected to be selling about 100 tonnes of product to South Korea during the year, but are now averaging that every five weeks, said Goodwin.

He reiterated the concerns over Canada’s reduced acres in 2016, noting that he “wish(ed) Korea had taken off six weeks before it did.”

Goodwin said customers in Korea prefer Canadian hemp products for their quality, but will buy from China if they can’t get enough from Canada.

With the risk of tightening Canadian supplies and the potential loss of market share, “let’s hope for a bumper crop,” said Goodwin.

While the Canadian industry will be working hard to fulfill commitments, he said, “it will be close.”

Goodwin recently returned from a trade trip to Seoul and foresaw continued growth from Korea through 2016. However, he said Korean demand could see a pullback in 2017, as smaller players exit the market and the initial excitement subsides.

While Korean demand may eventually top out, Goodwin said other Asian countries — including Japan and Thailand — are expected to see growth and will more than make up for any adjustments in the Korean market.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

The post Hemp industry scrambling to meet new Korean demand appeared first on Grainews.