HEMP PROCESSING EFFORTS BOOSTED BY FUNDING

The Kawartha Hemp Company has tapped into enough Ontario Small Town and
Rural (OSTAR) funding to jump-start its plans for a local processing operation.

Peterborough MPP Gary Stewart confirmed late last week the company will
receive money from a provincial agriculture ministry fund set up to assist
rural entrepreneurs. The money will pay the wages of a consultant to
explore non-textile markets for hemp.

Kawartha Hemp has been in limbo since the terrorist attacks of Sept. 11,
2001. One month prior to that, company president Paul Shaughnessy hosted
Ontario agriculture minister Brian Coburn and several other visitors in an
Otonabee-South Monaghan field. There, he showed them the plants he hopes to
some day to process into textiles.

But that plan was put on hold when terrorists flew jets into the World
Trade Center towers and the Pentagon. The Kawartha Hemp Company's major
potential client, based in Georgia, lost a bundle and bailed on a proposed
contract.

"All their new investments were put on hold," Mr. Shaughnessy says.

"When they came back to us earlier this year, their demands had changed."

Mr. Shaughnessy and company originally planned to expand from six fields --
120 acres -- to 2,500 acres at Peterborough County farms. The hemp harvest
would have been processed at a new plant which would employ dozens more people.

They set a high standard so the cloth produced by locally-grown hemp would
last 15 years -- the same as petroleum-based textiles. The Georgia firm
wanted a cleaner look but the process involved in that weakens the fibres
and cuts back on their durability.

Kawartha Hemp crew turned to the National Research Council for advice on
new methods. They discovered that research was beyond what they could afford.

"Because of the enormous expense, we decided to postpone those plans with
the first customer and went looking for others with less demanding
specifications," Mr. Shaughnessy says.

Over the summer, supporters grew 40 acres of hemp for research and
development. They are still working on a market assessment and business
plans to get the project off the ground.

"Everything hangs on the provincial government approving that OSTAR
application," Mr. Shaughnessy says.