THE CASE FOR HEMP AND HEMP PRODUCTS

If Brian Johnson had his way, the production of industrial hemp products
would become a thriving industry on Vancouver Island.

The Head Street resident and president of Transglobal Hemp Products Corp.
is in the process - with several partners - of trying to acquire capital.
The cash is needed to establish an infrastructure to get the industrial
hemp industry up and running on Vancouver Island.

Once the infrastructure is in place, says Johnson, it's just a matter of
reaching out to any farmer who wants to get in on the action.

"We need to grab the bull by the horns and the farmers will grow it," he says.

Johnson's home is crammed full of various hemp products. His walls are
covered with such hemp-related art as a poster from the Reefer Madness
campaign in the U.S. During the 1930s, bullies in the cotton industry
managed to get the U.S. government to make hemp (and marijuana in general)
illegal. Even the comfortable-looking clothes on Johnson's back are made
out of hemp.

Industrial hemp can be transformed into other products including food,
building materials and fuel.

The scheme Johnson and his partners are involved in is actually divided
into separate entities created by the parent company, Transglobal Hemp
Products Corp.

Transglobal entities include the Pacific Islands Hemp Farmers Co-op and
Island Hemp Investment (Venture Capital Corporation) Inc.

As a Venture Capital Corporation, Island Hemp offers investors (who make a
minimum investment of $5,000) a 30 per cent tax credit. In turn, Island
Hemp invests its money into Transglobal, Johnson explains. And Transglobal
is an eligible small business under the V.C.C.

The parent company oversees the entire operation while the planned co-op is
for the benefit of its members. "Nobody controls the co-op," says Johnson.

Johnson first formed Transglobal in 1994.

After forming the farmers' co-op, he says attempts were made at growing
hemp on the Island.

However, the hemp couldn't be processed due to the unavailability of the
proper machinery, says Johnson.

He and his associates have ordered the needed machinery from out of the
country.

The big challenge, however, is acquiring the necessary capital to build the
mills, the first of which would be financed through the VCC.

"You have to build the mills or you have no value added. It would be the
same idea as a logger or fisherman who brought in fish and logs and there
were no mills - they'd stop doing it after awhile," he says.

Johnson points out hemp seeds have to be processed into seed oil and
ultimately, the seed cake.

"It's the healthiest oil you can eat," he says.

Transglobal is in the process of trying to raise the funds through the VCC
to build the first mill for pressing the hemp seeds (essentially separating
the oil from the seeds) at Lake Cowichan. Johnson says he and his partners
are currently attempting to establish a joint venture with the owner of the
land where they are hoping to set up the seed press mill. The mill would
have to be about 5,000 square feet in size.

If that deal comes through, it would involve Transglobal obtaining a
99-year lease on the land, he says.

The second mill Transglobal is hoping to establish in North Cowichan would
function as a textile mill. The third mill, which would produce fish-feed
made of hemp, would be set up at Cowichan Bay, says Johnson, noting that
hemp has proven to be a very healthy form of fish food.

"We can't exercise them, so you got to feed them better," he says.

Johnson says good quality structural beams can also be made out of hemp.

There is a possibility that another mill for making such building products
could be built at Youbou.

Johnson says the wood structural beams, currently in use in most
condominiums, are more prone than hemp to moisture problems which could
result in the buildings collapsing in the event of an earthquake.

"The point is, there needs to be a new generation of building materials -
structural beams - other than glued together tiny little wood bits," he says.

Johnson and his partners are also looking at setting up an ethanol
hemp-pulp mill in the Alberni Valley some day.

Ultimately, says Johnson, Transglobal would like to build a total of nine
mills that would cost an estimated $572 million. But he stresses that goal
is a long way off.

The cost to build the first mill through the VCC is $2 million; the second
mill would cost $3 million; the third mill is estimated to cost $5 million;
the cost for the fourth mill is $10 million; while the cost for the fifth
mill would be $200 million.

The main focus right now is seeking investments for the first mill as the
subsequent phases are still a long way off if the money ever comes through.

Down the road, Johnson is hoping to set up a franchise operation where
entrepreneurs could purchase hemp product franchises that would operate
within larger stores.

A resident of Esquimalt for seven years, Johnson has a background in land
development consulting. He studied ghost towns on Vancouver Island for
three-and-a-half years (for investors who wanted to buy the properties).
Johnson raised syndicated venture capital for about 20 years and handled
tax shelters among other careers in business.

"I've done all sorts of things - pioneering, always pioneering, that turns
my crank," he says.

Johnson is now a pioneer in the industrial hemp business - an industry
that's tough to establish on Vancouver Island because there's no existing
infrastructure that could be modified for hemp.

Johnson notes that most industrial hemp operations currently in existence
in Canada are on the prairies where grain mills have been converted into
hemp mills.

Still, Johnson and his partners are determined to establish an industrial
hemp industry on the Island. What the Island does have, is 120,000 acres of
inactive land which could be used by farmers who want to grow industrial hemp.

"That's a huge resource. We would, over time, like to use 50,000 or 60,000
of those acres on a rotational crop basis," Johnson says with enthusiasm.

Johnson's plans have attracted attention from a number of politicians.

Federal Environment Minister David Anderson sent Johnson a letter
expressing an interest. Esquimalt-Juan de Fuca MP Keith Martin wrote a
letter to Johnson stating that "...given the incredible array of products
that can be derived from hemp and its long history of use in various
societies, this would be a worthy endeavor, given the need for agricultural
diversification in Canada".

Former Esquimalt-Metchosin MLA Moe Sihota as well as former
Cowichan-Ladysmith MLA Jan Pullinge and former NDP Agriculture Minister
Corky Evans have all sent Johnson letters expressing their support for the
idea of the hemp industry gaining a foothold in the province.