Hemp is stuck in a contract-driven loop.
Without predictable, commodity-style markets, industry leaders believe the crop can expand only as processors add capacity. That bottleneck, they said, has worked to keep Canada’s hemp acres flat and is limiting long-term growth.
WHY IT MATTERS: A contract-bound crop leaves growers with limited room to respond to new market opportunities.
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At the Canadian Hemp Trade Alliance (CHTA) annual conference in Winnipeg in late November, it reported about 50,000 acres of hemp grown in 2024.
That number might be low, said CHTA senior operations director Lawrence Shwaluk in his state-of-the-industry address. He expects acres are under-reported through Health Canada’s licensing system. He urged the association’s 213 producer members to ensure they submit accurate data.
“Even if you had zero acres and you’re still holding a valid licence, Health Canada wants to know that there were no acres planted,” he said.
Where’s Canada’s hemp?
Most hemp today is grown on the Prairies, and it’s still mostly driven by demand for grain. CHTA estimated, farm-gate hemp sales sit around $60 million a year, with the broader economic footprint, including value-added food and fibre processing, reaching roughly $160 million.
It remains well short of the organization’s long-term aspiration of building a billion-dollar sector. That goal was set several years ago, more as a directional target than a forecast.
Ted Haney, CHTA president and chief executive officer, said moving meaningfully toward that scale will require structural change.
“We’re a ‘build it and they will come’ industry, based on contractual relationships with unique specifications,” he said, adding that broader uptake won’t occur until hemp moves closer to a commoditized model with predictable purchasing channels.
“We’ll get there, but we’re not there yet.”
On the food side, hemp hearts, protein and oil continue to make up the bulk of revenue. Haney said the largest growth potential lies in processed ingredients like baking inputs, frying oils, protein blends and nutrition-boosting additives, areas where Canada is still in the early stages of development.
Cost competitiveness remains a major barrier. Hemp protein is still priced above pea and soy, limiting adoption by large processors. Yield improvements through hybridization are viewed as a key step toward lowering ingredient costs. Higher yields could also get more farmers interested in the crop, added Shwaluk.
Getting regulations on board
The other major bottleneck is regulatory. Hemp still falls under the Cannabis Act, and industry chafes against the barriers that come with that, particularly around THC testing, licensing requirements and the slow-moving battle of getting hemp meal approved for feed —an application for which was only sent in this summer after six years of work.
“Every food crop requires a feed market. Without that, it’s a barrier to entry,” said Haney, noting that canola crushers rely heavily on moving meal into feed channels.
Fibre remains a bright spot, with new processing capacity under construction in Western Canada and growing interest in hemp-based building materials. For that to grow the hemp market though, they would need to be considered in building codes. The CHTA is tackling that along with the National Research Council and industry partners.
Hemp growth expected to be steady
Hemp’s outlook is stable, both Haney and Shawluk said. As for growth, a new national levy is expected to play a role. The Canadian Industrial Hemp Promotion-Research Agency — operating publicly as Hemp Canada Chanvre — was formally established last year.
The agency will collect a 0.5 per cent levy on hemp sales to fund research, standards development and market promotion — a more stable source of funding than the voluntary contributions the sector has relied on to date.
In addition, Haney and Shawluk noted that demand for food and fibre ingredients continues to grow and new revenue streams, such as livestock feed and bio-based industrial products, are expected to diversify markets over the next several years.
“We can scale up, that’s not the problem,” Shwaluk said. “Doing it competitively, and with the right regulatory structure, is what will determine how fast we grow.”
