Growing Hemp for Grain Lamont County 2020 Outline • Hemp Food Industry Overview • Market trends • Quality • Agronomy • Economics Fresh Hemp Foods – A Tale of Two Companies Hemp Oil Canada Facility, Ste. Agathe, MB Multiple Uses A Broad Array of Products for Multiple Needs Hemp in the Marketplace Cereal/ Granola Snacks Bulk Section Frozen Non Dairy Bev Sports Nutrition Hemp Distribution 2019 – Tilray Inc. Purchases Fresh Hemp Foods • Presence in 12 countries, 5 continents • 3 Divisions • Medical Cannabis • Adult Recreational Cannabis • Health Foods and Natural Health Products Market Trends News From CHTA – 2019 Exports • 18,639 tonnes • $112 Million (16% increase) • 33 countries • USA ($102M), S.Korea ($1.6M), Netherlands ($1.4M) • Net Exports: $109 Million (15% increase) USA Trends • 2018 Farm Bill – legalizes hemp * Includes greenhouse Agronomics Farm Operations • Contract acres • Agronomic advice • Seed Genetics • Quality • Seed cleaner audits • Logistics and transportation • Grower payment • Research & Development of Best Management Practices Licensing • Controlled by Health Canada • Certified seed only • Low THC • All growers licensed • GPS coordinates required • Subject to inspection A good hemp crop starts with a proper seed bed Seeding ▪ 28 to 30 pounds per acre ▪ 100 to 125 seedlings per m2 ▪ Seed shallow (1-2 cm) ▪ Warm soil ▪ Pack to ensure soil contact ▪ Similar management to canola ▪ Seed costs ▪ Fertility Fertility - Organic Weed Management: Inter-row cultivation Canopy Closure – competitive exclusion Disease • Few diseases • Sclerotinia is possible (manage rotations with canola) • Botrytis (grey mold) Insects • Generally not a problem with hemp • Bertha armyworm • Cutworm • Grasshoppers Harvest and Residue Management Straight combining with Redecop straw chopper Forage harvester chopping up combined straw Swathed Finola Quality Commitment to Quality – Certifications & Standards …our standards are higher than anyone else's… Required Elected Internal standards* * the true mark of quality With 20+ years of focused work on hemp food quality & safety, our internal standards for supply, process, & product are the most rigorous in the industry Quality throughout the Supply Chain …thorough testing throughout… • Testing; seed to shelf… Supplier approvals (ingredients & 1o pkg) Coaching, COA / COC Inspections, grower rating & (pre-shipment) TESTING Dehulling TESTING Audits & coaching Farm Pressing & Milling Field Seed Cleaner Ste. Agathe & Winnipeg facilities Toasting Bulk Ingredient Bulk packaging TESTING Customers (field harvest) TESTING* (receiving) Inspections Further processing / Co-manufacturing Mixing (flavors) Packaging & Distribution WIP TESTING Lots of early testing to ensure only the best raw seed & ingredients are purchased, strong systems, team, & CULTURE control quality at our manufacturing facility Quality Control – product testing …testing, not only to verify the product we sell is great, but to predict and mitigate poor quality early-on… • SPC • Moisture • Coliform • Protein • E. Coli • PV / FFA • Yeast • Gluten • Mold • THC • Salmonella Microbi- Chemical ological Organole- Physical ptic • Sensory • Appearance • Purity • Colour • Particle size • Odour • Taste • Mouth feel Conditions for Microorganism Growth • Most microorganisms require the following for growth: • Source of food • Warm temperatures • Moisture • Oxygen • Consider cross contamination as well Managing microorganisms …Harvest • Environment • Wet & warm create conditions for micro growth • Harvest moisture & temp • Inspection & Sanitation • Combine • Trucks • Bins • Augers / conveyors • Your boots as you climb in all these spots • Swathing • Keep up, off the soil Pasteurization Wing Under Construction Economics Conventional • $0.55 per pound on contract • Average yield ~1,000 pounds net on dryland • Input costs similar to canola • Fertility • Seed cost ($60.00) • No in-crop herbicide on contracts • Drying, cleaning costs • FOB seed cleaning plant • Timing: 2 months of carryover Organic • $1.48 per pound on contract • Average yield ~700 pounds net on dryland • Variable, nutrient dependent • In rotation after plow-down • Seed cost $60, possibly more • Drying, cleaning costs • FOB seed cleaning plant • Timing: virtually no carryover Take-Home Messages • Markets are established and (mostly) predictable • Growth expected; innovation will be important • Production and harvest are manageable • Coaching is important • Quality is extremely important • Hemp for food can be profitable Questions? Clarence Shwaluk Director, Farm Operations Manitoba Harvest [email protected].