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HEMP INNOVATION 2015

HEMP INNOVATION 2015. LONG-TERM INTERNATIONAL STRATEGY (LTIS). Prepared by Russ Crawford and Markus Schmulgen. Hemp 2015-$100 Million.

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HEMP INNOVATION 2015

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  1. HEMP INNOVATION 2015

  2. LONG-TERM INTERNATIONAL STRATEGY (LTIS) Prepared by Russ Crawford and Markus Schmulgen

  3. Hemp 2015-$100 Million • It is the goal of the industry to grow 40,000 hectares (100,000 acres) of hemp in Canada by 2015. Given average yields and current prices, this represents over $35 million in farm gate receipts which translates into over $100 million for the Canadian economy. The various goals of the LTIS will support… ---Hemp 2015-$100 million---

  4. REPORT OVERVIEW • Background • SWOT • Branding • Strategy • Strategy Formulation • Strategy Implementation • Measurement

  5. BACKGROUND • National Industrial Hemp Strategy • Evolution of CHTA and Board • Executive Director & Board • Membership – producers, companies, etc. • Funding – Industry, government • Industry Standards - By-laws, Code of Conduct • Support from AAFC & CAAP • LTIS Review

  6. CHTA GOALS • Promotion and Communications • Research • Market Development • Administration

  7. MARKET STATUS Current state of the hemp industry in Canada • Expanding acres in Canada • Controlled and monitored by Health Canada • Remains illegal to grow in USA • International market focus on fibre • More hemp SKU’s in N. America • Economics still show hemp is highly profitable • Environmentally friendly & non GMO

  8. HEMP PRODUCTION

  9. HEMP EXPORTS

  10. OILSEED COMPARISON Ambitious Goals?...........Not Really…………..

  11. GLOBAL OPPORTUNITY Themes from ANUGA 2011 • LOHAS – lifestyles of health and sustainability. • Convenient, gluten & allergen free. • People spending more to regain health. • People taking responsibility. • Organic consumption growth rate is 20%/yr. • Awareness of challenges with GMO. • Animal products tainted – mad cow, radiation, meds, hormones, poor land use, subsidies. • Evolution to vegetarian and vegan diets.

  12. LTIS GOALS • WHAT • 100,000 acres • $100 million • WHEN • By 2015 • HOW • Communication • Research • Market Development • Administration

  13. LTIS GOALS • Specific Action Plans • Create and execute a brand and communications strategy. • Research health benefits and feed applications. • Secure GRAS status for hemp powder and oil. • Operate a full time industry association office.

  14. LTIS GOALS (cont.) • Promotion and Communications Develop and implement a two-year branding and communications strategy for hemp and hemp products targeted at export destinations.

  15. LTIS GOALS (cont.) • Research - Conduct research on health benefits and feed applications for hemp products achieving results from at least one study each year for the next two years for a total cost of $1,000,000 over the full time period.

  16. LTIS GOALS (cont.) • Market Development - Secure GRAS status for hemp protein powder and hemp oil over the next two years at an annual cost of $1,000,000 per year. ($2,000,000 in total).

  17. LTIS GOALS (cont.) • Administration - Operate a full time CHTA executive office out of Winnipeg with an Executive Director and communications employee responsible for day-to-day operations and market development execution at a cost of $100,000 per year.

  18. LTIS OBJECTIVES Objectives that will benefit the whole industry… • To undertake the research necessary to promote and obtain regulatory approval for hemp as a healthy ingredient. • To facilitate the effective use of generic market development and promotion programs by CHTA members that are targeted and geared towards developing new opportunities. • To expand/find new uses or dual usage for hemp (seed, for food and cosmetics, and fibre)

  19. TARGET RESEARCH • Effects of Hemp in Poultry Rations. • Effects of Hemp Protein and BioActive Peptides on Hypertension and Kidney and Heart Health. • The Safetiness and Bio Availability of a Long Term Consumption of Hemp Oil in Vivo. • Hemp Decortication and Use of Decortication By-Products for Biofuel Production and Green Building.

  20. REPORT OVERVIEW • Background • SWOT • Branding • Strategy • Strategy Formulation • Strategy Implementation • Measurement

  21. SWOT ANALYSIS

  22. STRENGTHS… • Producer of high quality hemp seed and fibre. • Focused, capable dedicated group of members of CHTA. • Development of a prioritization of projects based on industrydemand and growth signals. • Body of knowledge with respect to breeding, processing andproduct development.

  23. …STRENGTHS • Name recognition – Hemp – Canada. (More for food than fibre). • Established relationships with retailers and end user clients – product awareness. • Many Canadian co-operative ventures assuring on-going participation from vested stakeholders along the supply chain. • Engaged government supportive indeveloping the crop sector.

  24. WEAKNESSES… • The need to achieve Generally Recognized As Safe (GRAS) status with the US Food & Drug Administration for hempseed and hemp products. • Lack of approval from the Canadian Food Inspection Agency (CFIA) for the use of hemp and hemp products in animal feed. • Lack of clinical research specifically onthe health benefits of hemp seed and oil.

  25. …WEAKNESSES • Absence of funds to proceed with critical clinical trials and hemp product efficacy. • Government’s 50/50 matching strategy poses significant problems in qualifying for any funding programs. • Small producer and processor baseunable to source adequatefunding to conduct necessaryresearch. • Absence of hemp fibre processingfacilities in Canada.

  26. OPPORTUNITIES… • Consumer demand is trending more towards local, natural, organic, eco-friendly products playing right into the primary attributes of hemp food and fibre products. o Human foods o Pet foods o Body care products o Health industry o Building products • Build on the positive environmental impact of hemp in the agricultural sector as a minimal user of chemicals producing a non-GMO product.

  27. …OPPORTUNITIES • Work with government financial support and people resources to develop new products and identify and capture new markets. • Continue the work on clinical trials, feeding trials and varietal development building on our existing experiential knowledge and expertise. • Work together as an industry for the strategic advantage of the Canadian hemp trade.

  28. THREATS… • Inability of the CHTA to sustain operations due to inadequate funding. This would result in the loss of a focal point and primary contact for programs and direction. • Concentration of dedicated industry participants may exhaust the energy and commitment of those people.

  29. …THREATS • USA legislation approving the cultivation of hemp (this may be seen as an opportunity, as it potentially accelerates the development process and research requirements with new investors, but it has the potential to marginalize the Canadian hemp industry). • Potential for either demand or supply to outpace the other creating a market failure. • Shortage of available, affordable sample testing laboratories.

  30. REPORT OVERVIEW • Background • SWOT • Branding • Strategy • Strategy Formulation • Strategy Implementation • Measurement

  31. BRANDING • Brand Hemp as “Canadian” Quality • Leverage our production experience and ideal agronomic conditions. • Establish and build on the idea that Canadian hemp is superior to hemp grown elsewhere in the world. • Product recognition and brand identity.

  32. REPORT OVERVIEW • Background • SWOT • Branding • Strategy • Strategy Formulation • Strategy Implementation • Measurement

  33. NEED FOR A STRATEGY • Positioning the industry relative to competition that is well established. • Developing a shared vision. • Uniting stakeholders to work together. • The hemp industry is at a critical “Grow or Die” stage.

  34. STRATEGY • Know Yourself • Research • Clinical trials • Know Your Customer • Nutritional benefits • Education

  35. STRATEGY • Discover factual attributes of the properties, characteristics and functional value of the hemp plant in order to make substantiated claims. • Seek out the needs and preferences consumers are looking for in food and fibre products. • Communicate, in an effective manner, how well hemp can satisfy these specified needs.

  36. INTERNATIONAL DESTINATIONS Processed Canadian hemp products, in one form or another, have found their way to 30 different countries around the world over the past four years.

  37. EXPORTS BY DESTINATION

  38. REPORT OVERVIEW • Background • SWOT • Branding • Strategy • Strategy Formulation • Strategy Implementation • Measurement

  39. ACTIVITY MEASURES • Promotion and Communication • Two year branding and communication • Research • Two year $2,000,000 • Market Development • GRAS - $2,000,000 • Administration • $100,000 Annually

  40. SPECIFIC ACTIONS • Completion of Marketing Materials • Hemp 101 Overview • Trade Show Booth • Trade Show Banners • Social Media Campaign • Important Events • Hemp History Week • Natural Products Expo East, USA • Natural Products Expo West, USA • American Dietetic Association, USA • Green Festival-San Fran, NYC, LA • EIHA-May 2011 • Culinary Institute of America, USA • Canadian Health Food Association Trade Show, Canada • Natural and Organic Product Expo Europe 3, Great Britain • BioFach, Germany • ANUGA, Germany

  41. BARRIERS TO SUCCESS… • Failure to maintain an industry association to lead the initiatives identifiedthrough: • Inadequate funding. • Lack of industry support and co-operation. • Reduction in the profitability of growing and/or processing hemp for food and fibre applications vs. competing crops.

  42. …BARRIERS TO SUCCESS • Public and governmental stigma towards hemp. • Cost of Production • dual purpose crop • agronomic research • Product Innovation • Infancy Industry stage…niche market

  43. OVERCOMING CHALLENGES • Stigma of hemp/marijuana “Refer Madness” growing acceptance with education - 14 years in the making. • Illegal to grow in USA, DEA lost in court 2003-4, border is open, many states passed to grow. • Hemp milk & ice cream on Dr Oz April 2011. • Soy, corn & rice functional food competition.

  44. NEXT STEPS… • Execute LTIS Strategy. • Secure funding to support research, communication strategies and on-going administrative support. • Embolden and entrench CHTA as unifying voice for the Canadian hemp industry.

  45. …NEXT STEPS • BuildNorth American/EuropeanCollaborativeVentures. • Eradicate Stigma.

  46. QUESTIONS

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