In 2017 Global Hemp Group (GHG) in joint venture with Marijuana Company of America (MCOA) launched a multi-phase commercial hemp project in northeast New Brunswick, Canada. This marked the return of industrial hemp to a region where it had been tried 20 years earlier but failed to take off due to lack of market opportunities at the time. With the initial phase complete, the Partners moved forward with Phase Two; commercial cultivation and extraction of cannabinoids.
The final phase of the project will be the implementation of the Company’s Hemp Agro-Industrial Zone (HAIZ). The HAIZ focuses on the development of an industrial cluster around the hemp crop, which will ensure a market for farmers, year-round manufacturing job opportunities for the region, and a model for the Company to attract and develop additional HAIZ projects in other regions in both Canada and the United States. This strategy is expected to create a consistent revenue stream for years to come.
Field Crop Style
The 125 acres in New Brunswick were planted from seed, in field cropping style, as compared to orchard style with clones like the Company’s Oregon project. CBD content of the hemp is lower at the New Brunswick project as the project can only use hemp seed that is on Health Canada’s List of Approved Cultivars, which at this time does not have cultivars with 12-18% CBD as used at the Oregon project. Utilizing dense cropping will increase the numbers of plants grown, thereby increased the amount of CBD produced from this style of cultivation.
Collaboration with DAAF
On June 21, 2018 GHG announced an initial collaborative framework with the New Brunswick Department of Aquaculture, Agriculture and Fisheries (DAAF). The DAAF provided a grant of $10,750 to support demonstration projects it will undertake in the current cropping season at the project. The grant will cover three areas of collaboration, study of the impact of the European Corn Borer (ECB) on the hemp plant, explore correcting soil acidity utilizing slag lime, an abundant resource in the region, and to test the use of modern drone technology to monitor field conditions at the farms to provide a holistic view of a crop’s growth, identify issues and better target field scouting. In addition, the DAAF is also conducting a Nitrogen fertility project on a portion of one of the farms. Information gained from these various initiatives will improve the management of the crop and benefit all hemp farmers in the region.
Four farmers were contracted to grow hemp on 125 acres in the region in 2018. The goal of the project is to increase the acreage under cultivation to more than 1,000 acres within three years. The farmers participating in this year’s cultivation are located throughout the northeastern region of New Brunswick. The distribution of farms will maximize the demonstration effect and will facilitate the recruitment of additional farmers in the following years. This carefully selected group of farmers will actively participate in addressing the introduction of this new crop across different regions.
A 4,000 sq. ft. facility in Bathurst has been leased for the project. The building will be used for offices for the project, as well as a drying facility to process the fresh biomass and for storage once complete. Drying prepares the biomass for shipment to third party processors for extraction of the cannabinoids.
Harvesting of the 2018 crop began in mid September and is expected to be complete by early October.
A THREE PHASE PROJECT
Phase One (completed in 2017)The first phase of the project was the field trials of a number of hemp varieties, and a survey of farming conditions in the area. Data will be collected on yields of the grain, straw, flowers & leaves, and CBD content of the hemp. In addition, farmer commitment to hemp cultivation, and possible rotations in which hemp cultivation would fit profitably will all be critical in appraising the project using information relevant to growing conditions in the Acadian Peninsula.
Phase TwoThe second phase of the project in 2018 expands beyond trials to commercial cultivation and will cover more than 125 acres, and include a larger number of varieties. Key to this phase of the project will be the extraction of cannabinoids from the hemp grown. As this is currently the most profitable aspect of hemp cultivation, extraction will be the foundation to expand and fund the project going forward. In addition, pilot industrial activities will also be included in this phase.
Phase ThreeThe third phase of the project starting with the 2019 growing season, the project will embark on its final phase on the way to full agricultural and industrial deployment. Over the next three years, the area under hemp cultivation is expected to reach 9,000 acres and industrial facilities to process seed, straw, and flowers & leaves will be fully operational. The majority of investment required for the New Brunswick HAIZ will be in years four and five, with the exact amount varying depending on the final configuration of the HAIZ. The project will create hundreds of direct new jobs in both agriculture and manufacturing.
FOCUS - The project has three principal thrusts: hemp farming, primary processing of the crop, and secondary processing into finished products.
Primary processingPrimary processing will include a decortication plant to separate fiber and hurd, a seed processing plant to extract oil and protein powder, and, as soon as Canadian legislation allows, a facility to process flowers and leaves to extract cannabidiol (CBD) initially as well as other cannabinoids (CBC, CBG, CBN) and terpenes. Markets for seed and CBD are already in full development.
Secondary processingSecondary processing however, is where the real sources of employment and environmental benefits are found. The Company is seeking links with manufacturers, to join efforts in processing these primary products locally into consumer products. Cottonization of fibres for the textile market and processing of hurd for use in the construction industry are examples of products derived from the straw. Hemp oil seed cake enriched with CBD is another area of production, to produce healthy human and animal foods. The entire hemp plant will be transformed into an array of environmentally friendly products. The project is established in an incremental five-year framework, in which farmers will be trained and guided as they adapt to the new crop and explore a new farming system model. A multi-dimensional research program will be implemented to support farming activities, to improve processing methods, to develop new products, and to monitor the use and impact of products from the HAIZ. Contacts with research organizations of the region have already been established and agreements are under negotiations.
Location - Bathurst area in northeast New Brunswick, Canada