Hemp Seed

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Hemp Seed

• Markets and Opportunities

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What is Hemp Seed?

• Protein / 30
• excellent dietary source of easily digestible,
  gluten-free protein
• Fatty Acids /- 35
• Essential Fatty Acids (EFAs) /- 30
• 31 ratio omega-6 omega-3
• gamma-linolenic acid (GLA) /-3
• stearidonic acid (SDA)
• Carbohydrates /- 35
• insoluble fiber /- 30
• soluble fiber /- 3
• sugars /- 2

Courtesy of Hemp Oil Canada
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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

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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.

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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

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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 EFAs, 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
• HIAs successful court challenge of the DEA -
  decision permanently blocks DEA regulations that
  attempted to ban nutritious hemp foods
• International competition
• Health Canadas 10ppm THC limit benefits Canadian
  suppliers
• imported whole seed must be sterilized
• certified organic production

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Non-food Markets

• Hemp Seed Oil
• Personal Care Products
• claims that this accounts for about half of the
  worlds 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

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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)

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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)

FAO - Food and Agriculture Organization
of the United Nations does not include
Canadian production
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Flax Seed a window into hemps 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 worlds 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 U242/t (ranging from
  U193-309/t)

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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

Hectars Licensed by Cultivar As of June 27,2003
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Breeding Programs

• Breeding objectives
• Increasing yields
• population type
• selection of elite populations
• select for uniform maturity
• hybridization
• agronomics
• Minimize THC content
• Regionally adapted

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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,)