HEMP COMPANY CLOSES CANADIAN OFFICE

DAUPHIN, Man. - There were more questions than answers last week about the
troubled company that spurred this community to believe it could be the
hemp capital of Canada.

Farmers and community leaders met here on Feb. 25 to talk about what to do
in the wake of events surrounding hemp buyer Consolidated Growers and
Processors Inc.

The company dismissed its four Canadian employees last week and was locked
out of its Winnipeg office by its landlord.

Hemp farmers have not been able to reach any of CGP's American officials in
California or Ohio.

And rumors flew that the company had declared bankruptcy.

Despite checking court records in California and Delaware last week, The
Western Producer was unable to find evidence CGP had filed for or has been
forced into bankruptcy. The company's head office is located in Monterey,
Calif., and it is incorporated in Delaware.

The Parkland Industrial Hemp Growers Co-operative, a group of farmers who
grew hemp for CGP last year in the Dauphin area, are no longer counting on
CGP.

"We think CGP is a thing of the past," said Joe Federowich, chair of the
co-op.

The Dauphin growers were joined by about 35 farmers from other parts of
Manitoba and Saskatchewan who also contracted with CGP last year.

Although they peppered the co-op board with questions, farmers were not
angry. They voted to get a legal opinion on the contract they signed with CGP.

Millions Owing

The company failed to pay farmers by its contractual deadline of Jan. 31.
Farmers estimate they were owed $3 million on Jan. 31, and another $3
million on March 31 for the hemp seed, which still sits in their bins.

They want to find out whether they now own the seed. If so, there was
general agreement that farmers would pool their production and marketing
efforts to try to avoid flooding the market.

"If you don't do that, I think a lot of guys are going to get hurt here,"
said Federowich.

The farmers talked about several options for selling their hemp seed and
fibre, ranging from selling it quickly to using part of their inventory as
equity to build a processing plant.

The co-op estimates farmers hold 5.5 million pounds of hemp seed, 2.5
million lb. of certified planting seed and 30,000 tonnes of baled fibre.

The co-op has taken about 500 lb. of seed to the Food Development Centre at
Portage la Prairie, Man., to crush for oil samples.

Several buyers have called for samples, Federowich said. An Alberta straw
processor has also shown interest in buying the farmers' bales.

Federowich said he believes if farmers stick together, they will get at
least half of the money they expected to earn from their hemp within four
months.

Brent Strachan agrees the unpaid hemp farmers should stick together to get
the best possible pooled prices.

Strachan, who grew 45 acres of hemp last summer near Hamiota, Man., about
150 kilometres south of Dauphin, said he plans to join the co-op.

"I guess I'm as confused as everybody else right now," he said.

Joe Laxdahl, with the provincial intergovernmental affairs department,
warned farmers that other hemp buyers will approach them and test their
resolve to stick together.

Laxdahl said there are markets for hemp, but they are small niche ones.
Most hemp processors are small operations that have established contracts
for what they need to buy.

The recently dismissed head of CGP's Canadian operations also attended the
meeting.

Darrell McElroy said he signed a confidentiality agreement with the company
and could say little about what has happened.

"Chapter 7 was mentioned," he said, referring to one of two types of
bankruptcy under American law.

McElroy, a farmer from Darlingford, Man., said he hopes to continue working
in the hemp industry.

Officials with CGP did not return calls from The Western Producer last week.

The company's Canadian lawyer also did not return calls.