Prairie-based Innovation Supercluster Ignores Canada’s CBD Hemp Industry

The Government of Canada today announced that the Protein Supercluster—the Canadian government’s previously announced Prairie-based innovation program dedicated to “[using] plant genomics and novel processing technology to increase the value of key Canadian crops“—has selected its first project: the development of technologies that improve oil and protein amounts in canola and hemp. With a total of $8 million invested into the project over two years ($4 million from Protein Industries Canada and $4 million from industry), the Canadian Protein Supercluster’s first project seeks to increase oil and protein values in canola and hemp by creating new processing techniques.

Canadian cannabis industry onlookers can’t help but be disappointed. This investment into developing new hemp processing techniques is strictly related to increasing hemp protein content—not say, the processing of hemp cannabinoids. It’s a missed opportunity, judging from the fact that Prairie provinces like Alberta are currently struggling to process hemp for cannabinoids (ie. CBD) effectively.

In an interview with Alberta Farm Express, Jan Slaski, senior researcher at InnoTech Alberta was quoted saying,

“Right now, there’s no value chain for this [hemp CBD]. In Alberta, we’re lacking sufficient processing capacity. Processing is lagging behind.”

In the same article, Keith Jones, the general manager of Rowland Seeds Inc. (aka Rowland Farms)—one of the companies partnering on the Protein Supercluster’s inaugural project—had this to say regarding the emerging CBD industry…

“There’s an opportunity there [with CBD], but it’s a little bit of a Wild West gold rush right now,” said Jones, general manager of Rowland Seeds near Taber. “There’s a whole bunch of people who are diving into it, but the CBD marketplace has a lot of growing up to do.”

The article goes on to state that,

“. . . until the CBD market matures and processing capacity increases, Rowland Seeds is likely going to continue to grow organic hemp for the food market.”

The problem is that it’s often too late to capture significant market share by the time a market has matured. Most of the opportunity is simply gone, swallowed up by companies who have now become industry leaders by acting first.

If the need for research around hemp extraction in Canada wasn’t clear enough, just take a look at Canopy Growth Corporation’s (TSX: WEED) (NYSE: CGC) recent acquisition of Saskatoon-based bio-product extractor KeyLeaf Sciences.

Via Canopy Growth,

“Canopy Growth has been working closely with KeyLeaf – formerly known as POS Bio-Sciences – as a trusted partner building out extraction processes and technology for the past year as it refines its scale extraction model for Canadian and global markets . . . Through the transaction [of KeyLeaf Sciences] the Company is acquiring a large-scale Canadian extraction facility as well as an extraction-related facility in the United States to support the Company’s U.S. CBD expansion.”

That said, not all hope is lost. Perhaps Canada’s largest marijuana company can have some sway on upcoming Canadian Protein Supercluster projects, given that its most recent acquisition—KeyLeaf (aka POS Bio-Sciences)—is one of the participants in application phase for the Canadian Protein Supercluster.

Canadian Protein Supercluster Should Recognize CBD Hemp As A Key Canadian Crop

It’s ironic that the “innovation supercluster” designated for the Prairies is thus far ignoring one of the region’s most obvious opportunities for innovation. Instead of investing in the development of technologies that could potentially address the problems facing Canada’s burgeoning CBD industry, the Canadian government continues to wait on the sidelines for a solution to present itself. However, with $149 million of the initial $153 million funding for the Canadian Protein Supercluster left, one can still hope that the Canadian government will allocate at least some funding towards supporting Canada’s hemp CBD industry, especially given the fact that Canopy Growth is now a potential stakeholder in the Canadian Protein Supercluster program.