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Hemp seed oil is poised to grow in flavor and fragrance markets

Posted on March 1, 1999

In 1998, Canada harvested its first commercial hemp crop in 60 years, and the viability of the plant as a raw material for flavors and fragrances is being explored. Though the fiber, nutraceutical and personal-care industries are set to profit most from this newly cultivated crop, its benefits to the flavor and fragrance community are the least developed and may offer the greatest potential.

“Canada grew about 5,000 acres in 1998,” says John Roulac, president of www.hempbrokers.com, a hemp seed marketing company based in Sebastopol, Calif., and secretary of the North American Industrial Hemp Council (NAIHC). “There are 30 food companies that are in the research and development phases for a variety of hemp foods, such as nutrition bars, beverages and coffee.”

Hemp oil, crushed from the seed, sells for $25 to $35 per gallon. The price is slightly higher for food-grade material and lower for cosmetic-grade product. For years, China has grown more than a 100,000 acres of hemp annually, “but outside of textiles, they’re not really innovative,” notes Mr. Roulac. “Canada is where the action is.”

Nutty Flavor

Greg Herriott, president and founder of the Mississauga, Ontario-based Hempola Inc., says that his company’s product line presently consists of hemp oil. “Basically, how we structure things is as follows: the oil and the seed cake, the crushed seed being a byproduct, are our two platform products.” Hempola markets the oil in bulk and bottled form. The seed cake is made into flour for baking, and the company is moving into baked products.

In March, Hempola will launch a line of three pourable salad dressings, all incorporating hemp seed oil. Hemp oil has a nutty flavor that is considered a cross between sesame seed and walnut. The oil’s flavor is strong and pungent, but like olive oil, its intensity depends on where the seeds come from and how they are pressed.

Hempola was formed in 1993. The company spent its first three years in research and development, and introduced its first product in 1996. The company is not public, but Mr. Herriott says that during its most recent fiscal year, which began in March of 1998, sales have doubled in each quarter.

“We’re still investing a lot of money and don’t see any profitability according to our business plan for the next couple of years,” he says. “There is going to be growth, but it’s not going to be a Yukon gold rush.”

Last year, Hempola harvested only 500 acres, a fraction of the acreage of other oil-giving crops. Mr. Herriott sees the US market as crucial to hemp seed oil’s success.

There is still a stigma attached to hemp, cannabis sativa, associated with its sister plant marijuana. In March 1998, Health Canada passed regulations allowing the legal cultivation of hemp. The hemp harvested cannot exceed 0.3 percent THC, the component responsible for the intoxicating properties in marijuana. The maximum allowable level for THC in the oil is 10 parts per million. Hempola’s hemp seed oil has no trace elements of THC.

Mr. Herriott predicts that the US will soon produce hemp. “There’s too much good quality to the product,” he says. But he notes that “for any pro-activity to happen, it has to be economically viable.” He expects the pulp and paper industry’s use of hemp to spearhead the market.

In January, delegates from the American Farm Federation withdrew language approved last year opposing research and domestic cultivation of industrial hemp. A spokesperson says the federation dropped its opposition to hemp because farmers need alternative crops.

“There isn’t enough product available to guarantee a constant flow of feedstock,” notes Irwin Sholts, chairman of NAIHC. “Our companies, based on what’s starting up in Canada, aren’t going to refit manufacturing equipment based on what they might be able to get someday.”

The use of hemp as a fiber may command the most acreage. Nevertheless, Bob L’Ecuyer, general manager of Kenex Ltd., a Pain Court, Ontario-based producer of de-hulled hemp seeds, oil and meal, notes that “the market in oils is relatively small, but it is expanding.” He expects the oil’s main uses to be in pharmaceuticals and healthcare products, as well as in flavorings for foods, beverages and salad dressings.

Kenex harvested 2,000 acres of hemp in 1998. The company has recently started processing grain, with a goal of producing more than 2 million pounds per year. “But we’re not doing that yet,” Mr. L’Ecuyer notes. “The market isn’t big enough to handle us right now.”

A company based in Switzerland called Cannabioland has created a fragrance by distilling the leaves of hemp plants into an essential oil. The closest fragrance application in the US comes from a San Francisco, Calif.-based company called Red Rooster & Sense Inc., which uses hemp essential oil from Europe as one of the notes comprising its Sativa line of perfumes and aromatherapy products. The oil, imported from Switzerland, costs $50 to $60 for 0.5 milliliters.

The most successful application of hemp seed oil has been in the cosmetics and personal care markets. The Body Shop uses hemp seed oil in skincare products, and Alterna produces a professional haircare line in which 17 of its 21 products use the oil. However, neither company uses hemp as a fragrance.

The major flavor and fragrance houses are not using hemp seed oil. “It’s too small a market,” notes a source.

“Flavors and fragrances are the most undeveloped of the hemp markets,” says John Howell, publisher of Hemp Times. “We have seen body product lines that started with a bar of soap, moved to a lotion or massage oil, then shampoo. They extend the line each season.” He adds that the hemp industry is young and it is only a matter of time before “hemp will be marketed as a fragrance itself.”

Copyright © 1999, Chemical Market Reporter. All rights reserved.