Download - HEMP INNOVATION 2015
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HEMP INNOVATION
2015
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LONG-TERM INTERNATIONA
L STRATEGY (LTIS)Prepared by Russ Crawford and Markus
Schmulgen
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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---
Hemp 2015-$100 Million
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1.Background2. SWOT3. Branding4. Strategy5. Strategy Formulation6. Strategy Implementation7. Measurement
REPORT OVERVIEW
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National Industrial Hemp Strategy
Evolution of CHTA and BoardExecutive Director & Board
Membership – producers, companies, etc.Funding – Industry, governmentIndustry Standards - By-laws, Code of
Conduct
Support from AAFC & CAAPLTIS Review
BACKGROUND
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Promotion and Communications
ResearchMarket Development
Administration
CHTA GOALS
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Current state of the hemp industry in CanadaExpanding acres in CanadaControlled and monitored by Health CanadaRemains illegal to grow in USAInternational market focus on fibreMore hemp SKU’s in N. AmericaEconomics still show hemp is highly
profitableEnvironmentally friendly & non GMO
MARKET STATUS
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HEMP PRODUCTION
Hemp Production in Canada
0
10,000
20,000
30,000
40,000
50,000
60,000
YEAR
Acr
es
Yukon
PEI
NS
NB
Quebec
Ontario
Man.
Sask.
Alberta
BC
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HEMP EXPORTS
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2006 2007 2008 2009 2010 Proj.
YEAR
Canadian Hemp Product Exports
Hemp Oilcake
Hemp Fiber
Hemp Oil
Hemp Seed
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OILSEED COMPARISON
hemp canola soybeans -
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
Acres
acres
hem
p
cano
la
soyb
eans
$-
$20,000,000,000
$40,000,000,000
$60,000,000,000
$80,000,000,000
$100,000,000,000
$120,000,000,000
$140,000,000,000
$160,000,000,000
$180,000,000,000
$200,000,000,000
Economic Benefit
eco benefit
Ambitious Goals?...........Not Really…………..
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Themes from ANUGA 2011LOHAS – 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.
GLOBAL OPPORTUNITY
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WHAT100,000 acres$100 million
WHENBy 2015
HOWCommunicationResearchMarket DevelopmentAdministration
LTIS GOALS
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Specific Action PlansCreate 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.
LTIS GOALS
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Promotion and Communications Develop and implement a two-year branding and communications strategy for hemp and hemp products targeted at export destinations.
LTIS GOALS (cont.)
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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.
LTIS GOALS (cont.)
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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).
LTIS GOALS (cont.)
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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.
LTIS GOALS (cont.)
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Objectives that will benefit the whole industry…1. To undertake the research necessary to
promote and obtain regulatory approval for hemp as a healthy ingredient.
2. To facilitate the effective use of generic market development and promotion programs by CHTA members that are targeted and geared towards developing new opportunities.
3. To expand/find new uses or dual usage for hemp (seed, for food and cosmetics, and fibre)
LTIS OBJECTIVES
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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.
TARGET RESEARCH
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1. Background
2.SWOT3. Branding4. Strategy5. Strategy Formulation6. Strategy Implementation7. Measurement
REPORT OVERVIEW
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SWOT ANALYSIS
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• 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.
STRENGTHS…
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• 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.
…STRENGTHS
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• 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.
WEAKNESSES…
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• 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.
…WEAKNESSES
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• 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.
OPPORTUNITIES…
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• 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.
…OPPORTUNITIES
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• 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.
THREATS…
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• 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.
…THREATS
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1. Background2. SWOT
3.Branding4. Strategy5. Strategy Formulation6. Strategy
Implementation7. Measurement
REPORT OVERVIEW
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Brand Hemp as “Canadian” QualityLeverage 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.
BRANDING
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1. Background2. SWOT3. Branding
4.Strategy5.Strategy Formulation6.Strategy Implementation7. Measurement
REPORT OVERVIEW
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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.
NEED FOR A STRATEGY
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Know YourselfResearchClinical trials
Know Your CustomerNutritional benefitsEducation
STRATEGY
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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.
STRATEGY
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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.
INTERNATIONAL DESTINATIONS
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EXPORTS BY DESTINATION
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1. Background2. SWOT3. Branding4. Strategy5. Strategy Formulation6. Strategy Implementation
7.Measurement
REPORT OVERVIEW
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Promotion and CommunicationTwo year branding and
communicationResearch
Two year $2,000,000Market Development
GRAS - $2,000,000Administration
$100,000 Annually
ACTIVITY MEASURES
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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
SPECIFIC ACTIONS
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Failure to maintain an industry association to lead the initiatives identified through: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.
BARRIERS TO SUCCESS…
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Public and governmental stigma towards hemp.
Cost of Productiondual purpose cropagronomic research
Product InnovationInfancy Industry stage…niche
market
…BARRIERS TO SUCCESS
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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.
OVERCOMING CHALLENGES
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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.
NEXT STEPS…
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BuildNorth American/EuropeanCollaborativeVentures.
Eradicate Stigma.
…NEXT STEPS
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QUESTIONS