HEMP STOCKS WEIGH ON MARKET

It could take years before industrial hemp buyers work through the
glut of seed left in the wake of Consolidated Growers and Processors
Inc.

Buyers and farmers at the Hemp 2000 conference held here last week
said it's hard to put a number to the size of the small but growing
market.

But it's clear the estimated 2,500 tonnes of commercial seed held by
Canadian farmers who contracted with CGP in 1999 are more than
existing processors can use this year.

The company also held about 135 tonnes of hemp in storage from its
1998 crop, which will eventually come to market.

Despite these weighty stocks, industry players remain
optimistic.

"We'll figure out a way to absorb that grain into the industry," said
Shaun Crew of Hemp Oil Canada, a Winnipeg processor.

"I think it's important to demonstrate this is an industry that's
cohesive and looks after its own."

Markets are growing, said Crew. If acreage is cut this year, he hopes
to see the excess seed bought up in the next nine months.

"Let's not pretend there's a magic market out there for these
products," he said.

Don Wirtshafter, a longtime promoter of industrial hemp and head of
Ohio Hempery Inc., said the surplus may be equivalent to two million
eight-ounce bottles of hemp oil. Last year, the market for hemp oil
was 60,000 bottles.

"There's a market there, but it's pretty small still," he
said.

Jean Laprise, president of Chatham, Ont. Kenex Ltd., said his company
is committed to helping farmers move their hemp grain, and helping
with fibre processing technology.

"I think it's going to take two to three years" to move the excess
hemp, said Laprise, explaining processing capacity, market demand and
product development will limit the pace.

"I certainly felt from the onset that the hemp production in Manitoba
this past year was grossly exaggerated," he said.

Rick Plotnikoff, of British Columbia-based Canadian Hemp Corp., had
perhaps the most optimistic market analysis.

Plotnikoff said he thinks the seed will be bought up within six
months, adding he's already bought 36 tonnes of the surplus.

But Laprise doesn't think the hemp can move that quickly. Farmers
would have to give away their hemp and likely pay for the trucking to
move it out of their bins within six months, he said.

Lawrence Yakielashek, a Canadian flax merchant with European
multinational A.C. Toepfer, thinks the hemp industry has a big job
ahead in market research and development.

Growers will probably have to drop two-thirds of their acres from last
year and start from scratch, he said.

"I think this industry is probably wise to step back and take a look
at itself," said Yakielashek, who attended the conference out of
personal interest.

"If they can get through the losses like this, obviously they have the
energy to take it to the next level," he said.

Jerzy Prytyk, of Regina-based Gen-X Research Inc., said falling prices
may spur some demand for hemp oil in paints, oils, varnishes,
adhesives and other industrial products.

The provincial government could help eat up the surplus by insisting
small amounts of hemp oil go into every meal served in hospitals and
other institutions, he noted.

Wirtshafter said hemp marketers must work with natural food products
distributors to get hemp into food markets.

And he urged companies to "use creativity" in finding hemp products.
He said he knows of a dozen Canadian companies that want to market
oil.

"If Shania Twain could do to hemp what she did for Bag Balm, all of a
sudden we could sell those two million bottles of oil," he said.