VANCOUVER CLOTHIER POISED TO BECOME 1ST PUBLICLY TRADED HEMP COMPANY

VANCOUVER (CP) - A local hemp clothier that has had dizzying success
making corporate promotional wear is poised to become the first
publicly traded hemp business in North America.

Hemptown is looking to raise $25 million so it can build mills in
Canada and a market for fabric-grade hemp, which it is now forced to buy
in China.

"We can grow the fibre in Canada; we sure can make clothes," said
Jason Finnis, Hemptown's chief operating officer. "It's turning the
fibre into yarn, that's the one step in the process we don't have."

"But we're proving there's a market for the product and farmers want to
grow it."

Even industry boosters have been quick to call the plan a pipe dream,
simply too costly to be successful, but admit anything is possible
given the company's success so far.

After a failed foray into the fashion world, Hemptown regrouped,
dumping any association with the moonbeam and rainbow crowd known to buy
the material.

The company donned a serious corporate image and began making company
hats and T-shirts. It attacked the trade-show circuit and won over
distributors and embroiderers who had a list of existing big-name clients.

Organizations from Warner Bros. and Toyota to the Government of Canada now
are Hemptown customers.

Finnis said corporations liked the easy public relations gain from
using environmentally friendly fibre to make their hats and T-shirts.

"A third of a pound of pesticides and chemical fertilizer goes into
every cotton shirt, chemicals which are proven to cause cancer and
birth defects and to harm the environment," Finnis said. "Hemp is a
hardier crop, so doesn't require these chemicals to thrive."

The company is developing the technology to allow it to screen logos
on 100 per cent hemp fabric. It currently uses a blend that is 45 per cent
cotton, which makes the clothes softer.

The material feels a lot like linen but is very durable, making it
ideal for sports uniforms, Finnis said. So Hemptown sponsors events
such as the Molson Indy and is in talks with Olympic organizers in
Beijing to become a sponsor for the 2008 Games.

Hemptown grew 400 per cent from $195,000 in sales in 2001 to $782,000 the
next year, and says it is set to outstrip that pace in 2003.

It expects approval to start trading on NASDAQ by the end of the year.
The plan is to raise capital to sustain its current growth rate for
the next two to four years and then start building a fibre mill in Canada.

"We've already signed agreements with knitting mills and we're testing to
determine what is the best variety of hemp to grow here."

Hemptown would contract out to farmers, likely on the Prairies, he said.

Arthur Hanks, president of the Canadian Hemp Alliance trade group, said
he thinks the development of hemp fabric here is a long way off.

More research is being done into other applications such as
biocomposites (chairs, decks, doors) and unwovens (material that can be
formed into moulds for things like car dashboards), he said.

"The fibre side is not easy," Hanks said from Regina. "You can see it
in the fields, it's doable, but there's a steep learning curve when you
get down to the nuts and bolts.

"It's easier to hit the quality parameters with unwovens because you
don't have to work the fibre down to such a fine state that it can be
woven into yarn."

Other hemp apparel manufacturers were more blunt about the prospects of
producing the material in Canada.

"Not in my lifetime," scoffed Robert Skrydlo, owner of The Hemp
Company in Toronto.

"There's hardly any fabric production done in North America anymore,
other than some fleece that Roots does. And there's a reason - you can do
it at a lower cost in other countries."

When he started his business making stylish dress shirts and other hip
work-wear pieces a few years ago, Skrydlo had his designs sewn
locally. After the first year he cut costs in half by contracting the
whole operation out to Chinese manufacturers.

"It's affordable to ship and the quality is a lot better," he said.
"They've been working with hemp for hundreds of years."

In Canada, growing hemp was banned for 60 years until the mid-1990s,
when lawmakers recognized it was a cousin of marijuana but did not have
the same psychoactive properties.

Hemp, which grows well in a cool, northern climate, is farmed mostly in
the Prairies, British Columbia and Ontario. About 90 per cent of it
is harvested for the plants' seeds for use in food and beauty
products.

The hemp food industry brings in about $5 million a year, said Hanks.
Profit estimates on beauty product sales are as high as $30 million with
companies such as The Body Shop using hemp oil in everything from soap to
hand cream and lip balm.