HIGH HOPES FOR HEMP

A Crop That's Legal To Grow For The First Time In Decades Is Finding U.S.
Markets

By Phil Novak

Ontario, Canada -- It was one of the more unusual displays at last summer's
Society of Automotive Engineers International Congress and Exposition in
Detroit. There, among concept cars featuring the latest technology, were
the Kenex Ltd. folks, showcasing side panels, armrests, dashboards and
insulated RV and trailer walls made with hemp, a plant that had been banned
in Canada for 60 years.

Times have changed, though, and so has the law. The weed once prohibited in
this country because of confusion with its distant cousin, marijuana, is
now legally spreading across southwestern Ontario like a, well, weed. The
inaugural crops were harvested in southwestern Ontario last summer, giving
Canada a leg up on the U.S.; despite hemp's benign nature, strength and
myriad uses, its cultivation remains illegal there, forcing Americans to
import US$100 million worth of hemp per year, mostly from Asia and Eastern
Europe.

Hemp's uses include equine bedding.

Jean Laprise and Geof Kime, the first hemp farmers of the modern era, are
already bringing a healthy chunk of business north of the border. Laprise,
president of Pain Court, Ont.-based Kenex, oversees North America's largest
consortium of hemp growers and processors. Besides growing the crop, Kenex
converts it into fibre, oil seed, animal bedding and food products. It is
also blending processed hemp cores with resins, thermoplastics or
polyesters for use in the auto industry.

Thanks to its presence at trade shows such as SAE's, Kenex cultivated leads
that helped it land a contract to supply a U.S. auto-parts maker with the
equivalent of more than a third of its crop. And it has also landed the
equivalent of hundreds of thousands of dollars worth of coverage in
newspapers and trade magazines such as Hemp Times, the premiere voice for
North American hempsters. "This has generated a tremendous amount of
interest in what we're doing, and resulted in people calling us up or
getting in touch with us, so it really helps our marketing efforts," says
general manager Robert L'Ecuyer.

Kenex does all its marketing in-house. Its Web site, www.kenex.com, is the
main way it disseminates information.

Geof Kime, founder of Hempline, which last summer grew 500 acres of hemp in
Delaware, Ont., isn't shy about disseminating his company's information.
He's regularly quoted in print and on TV-including a segment aired
nationwide on CBC-TV's Venture-which helps attract customers.

To get to that point, though, Kime first spent two years convincing MPs and
Senators that you can't smoke hemp but can make a shirt out of it.

Hempline doesn't make shirts, but has two core products. One is Hemp
Chips-equine bedding. Hempline has sponsored horse shows, and run ads,
through Marie McKaskell Art & Design of London, Ont., in horse magazines.

Hemp fibre makes up the second area of Hempline's business. Kime has also
developed markets for his high-strength, mold- and mildew-resistant crop,
all 500 acres of which have already been spoken for by U.S. carpet and
upholstery manufacturers.

But the real action promises to be in edibles such as flour, snack bars and
salad dressing. Jerzy Prytyk, Quebec City-based president of the Canadian
Industrial Hemp Council, says "we think the fastest-growing hemp market
will be in food products, where the infrastructure exists to process hemp
grain into many nutritious and edible products, and that sector is much
more exciting."

Less exciting are the marijuana-related misconceptions that haunt those
trying to mainstream the industry and remove the connection to hemp's
original proponent-the drug subculture. "Hemp and marijuana are varieties
of cannabis and have the same leaf shape," Kime says. "But to think they're
identical is like saying a Great Dane and Chihuahua are identical because
they're both dogs."

Regardless of image, hemp's legal agricultural status here could give
Canada a U.S. foothold. "It could take years to legalize growing it here,
so this may give your country an advantage," says Ken Friedman, president
of the Hemp Industries Association in Seattle, Washingon.

But Bud Sholts, chair of the North American Industrial Hemp Council in
Madison, Wisconsin, says Canada's prospects will be vastly improved when
the U.S. government sees the light and legalizes it there too: "Our
manufacturers aren't really going to gear up for hemp until they know
there's a guaranteed supply in North America. So Canadians will really see
their markets expand when we can grow it here as well, because that's when
things will really start to happen."