Market Overview

$45,000,000

In hemp seed exports from Canada

81,500

Acres of hemp cultivated across Europe in 2016. Equivalent to 33,000 ha.

No official government reports have been released stating the value of the hemp market; however, the Hemp Industries Association (IHA) in 2015, released a report estimating consumer sales of hemp in the US was $573 million. In addition, Vote Hemp and the Hemp Business Journal estimated in 2016, consumer sales of hemp products was $688 million; a 20% increase in sales from the previous year. Because the market is growing, it is projected that the hemp industry will grow to $1.8 billion by 2020. In Canada, consumer sales are estimated to be $20-40 million USD and are expected to see a growth of up to 40%, as reported by Canadian Hemp Trade Alliance. In addition, due to hemp’s health benefits in food, the demand for hemp seeds has increased by 30%. In 2016, Canadian exports of hemp seed saw a substantial increase, rising from $600,000 to $45 million. Overseas, the European hemp market is also seeing an increase in market size. Reported by the European Industrial Hemp Association, the acres of land use to cultivate hemp increase 32% from 20,000 acres to 81,500 acres (8,000 ha to 33,000 ha).

Global Production

Currently, there are approximately 30 countries around the world that are legally permitted to cultivate hemp. China is reported to cultivate 80 million pounds on 30,000 acres. Hemp production in Europe is reported to be 250 million pounds of hemp cultivated on 70,000 acres on land, with majority of Europe’s hemp production occurs in the west, where Germany, Italy, Poland and France all cultivate hemp. In North America, while no official estimate for the United States countrywide production has been made available, it is estimate that 9,561 acres of land are used for production, with Colorado leading as the highest producing state. Canada is the largest hemp producing country in North America, with 108,000 acres of hemp being grown and over 20 different varieties in 2014. Canada is the United States largest importer, with over 21 million pounds of hemp seeds being imported into the country in 2016.

Cost of Production

While the cost of production varies by country, it has been estimated in Canada the total cost of production for dryland hemp was $409/acre and $574/acre for irrigated hemp, with 75% of these costs being variable costs. If all 108,000 acres Canada cultivates annual were to be harvested as dryland hemp, the total production cost would be valued at over $44 million annually and over $61 million for irrigated hemp.

Revenue

While direct market information on revenue is not available, Health Canada reported based on discussion with some hemp producers in Alberta, the sales price of hemp seeds in 2011 was approximately $0.90-$1.00; yielding 1,100lbs/acre (500kg/acre) on 38,828 licensed acres. Based on the yield estimates, Canadian hemp seed production is approximately 15,513 tonnes — assuming all acres were harvested — translating to an estimated gross revenue of $30.75-34.17 million CDN — $990 to $1,100 per acre.

Based on 2015 data, the average yield for dryland hemp was 1,074lbs/ acre at $0.74 per pound and had an average gross return of $805CDN/acre. For hemp grown on irrigated land, the estimated yield was 1,679lbs/acre at $0.74 per pound, earning $1,322CDN/acre in gross returns; 64% higher compared to dryland.