The XY Hemp Corporation is back in action this spring, and I’m excited to tell you about our plans for the next two growing seasons. However, we haven’t been on hiatus all winter. In fact, Chad and I spent most of our winter months diving into research projects. After getting majorly inspired at the Canadian Hemp Trade Alliance (CHTA) conference in November 2015, I worked on some of the economics behind a series of White Papers published by the CHTA this spring. Through February and March, Chad and I explored hemp processing possibilities by completing market assessments for bio-polymers, bio-composites and cannabidiol (CBD) extract products. There is always more research to do, but in this post I’ll tell you about what we’ve learned so far.
At the CHTA conference in Calgary, Chad and I learned a lot about hemp building materials, CBD extracts and made lots of industry connections. I attended the full three days and was able to attend sessions with Health Canada, and update on US regulatory changes, and several sessions on hemp fibre processing developments. JustBiofiber provided an update on their hempcrete building blocks along with price comparisons to conventional building systems and information on the pilot facility they are building outside Calgary. We also got to learn from researchers at the University of Alberta and the Albert Agriculture and Forestry Bioindustrial Research Branch. The Wednesday morning session with Paul XX of Elixinol was the most highly anticipated event of the conference. He presented the research supporting the use of CBD and hemp oil for a wide array of health issues and diseases. It was a moving and motivational presentation. Throughout the week, we connected with many amazing people in the hemp industry and I offered my support as an economics researcher for the CHTA White Papers on CBD extracts.
After January, Chad and I began working though structured market assessments of several products derived from hemp. In these markets assessments we tried to fill in the gaps in our knowledge about the market size, the value chain (how the product move from raw hemp to final product and how much are the mark-ups at each stage of production), established business models in the industry, a SWOT analysis if we were to enter the market and what our key success factors would be. This process involved understanding the basic science behind some of the more technical products and gathering and organizing information about how existing businesses operate in the market.
We decided to started with the most complex product, bio-composites, to make things easier for ourselves going forward. Based on our research, bio-composites are natural fibers combined with polymers. We are most interested in green bio-composites, which use natural fibers and polymers derived from plants rather than refined petroleum. To start our research we ordered an amazing text book written by the European Confederation of Linen and Hemp and the research organization JEC. It was well worth the investment and helped us understand the language of composite materials, the science behind how they work, how they are made, and current applications in hemp and flax fibers. The text book also included market research and comparisons between the structural properties of hemp composites and traditional composites such as carbon and glass fiber.
Following this we moved on to bio-polymers, the building blocks of plastics derived from plant sources. In this stage we were comparing processes and products derived from a wide variety of natural oils (for example: canola, waste from ethanol production, soy) to plastics derived from hemp oils. This is a new area of research and during this process we reached out to our contacts at Alberta Agriculture and Forestry and Alberta Innovates, who connected us with researchers at the U of A who are working on lipids chemistry. Chad and I have both made visits to the laboratory to see samples of the bio-composites being developed and are excited to continue our research in this field.
Finally, we turned our attention back to CBD extracts from hemp. CBD is a polyphenol, like THC, naturally occurring in the hemp plant. The hemp plant is a variety of cannabis sativa that has been bred to have very low concentrations of THC (<0.3%), but in doing so, it can often have much higher concentrations of CBD. There is a lot of interest in the health community about the potential therapeutic uses of CBD, and many products already available online. We reviewed some of the science behind CBD, the methods used to extract it from hemp and the potential market for these products. It is not possible at this time for hemp farmers to harvest or process the parts of the plant that are rich in CBDs. This is one of the reasons why the CHTA wrote its White Papers and has been sharing this information with decisions makers in Ottawa to help change the rules that govern hemp production.
Chad and I have a few more market assessments we would life to complete this year, for biofuels and hemp construction materials. We have started gathering resources for these pieces but have put our work on hold to get our hemp farming process organized for the next two years (more about that in the next blog post). We are also excited to observe and participate in conversations about how marijuana legalization should be structured in Canada, and we’ll be following the research on this topic closely. Bio-polymers and bio-composites are exciting new industrial markets for hemp, and we will be looking for ways to build a business model for those products which fits our desired scale. As always, we couldn’t do any of this without the amazing network we have been building in hemp and the Alberta bio-industry and we look forward to continuing to build relationships with government, researchers and other businesses.