for New Zealand from Hemp
$2 billion/yr and 20,000 Regional Jobs
The purpose of this report is to explore the commercial, regional, and environmental opportunity for investors in the Industrial Hemp sector in New Zealand. Author: Dr Nick Marsh
Purpose Of Report
Growing at 20% CAGR
The global hemp industry has been growing at 20% CAGR over the past 4 years, but is projected to grow from US$ 4.6 billion in 2019 at a 40% CAGR to US$64.8 billion by 2030.
The Key Growth Driver
The mega trends driving hemp growth include:
- ‘Regenerative Agriculture and sustainability’- the drive
for a more sustainable world.
- ‘Hemp and CBD’ – the drive for natural health solutions.
- ‘Plant revolution’- the drive to replace meat and dairy
with plant based substitutes.
The three main product categories are:
- Seeds – manufactured into oils for consumer products including natural health products, food supplements, powders, and balms, and also industrial products.
- Fibre – from the Bast and Hurd in the Stalk – is manufactured into a wide range of textiles, paper, and building materials.
- Extracts – cannabinoids, terpenes and flavonoids extracted from the flowers and leaves into distillates and isolates, of which the largest market is CBD (cannabidiol).
One Hectare Of Hemp Can Produce
- 250 litres of hemp seed oil used for everything from paint, to food-grade culinary oil. High-quality food grade hemp seed oil retails for up to NZD$75 per litre; or
- One metric tonne of hemp seed, a nutritious cereal that is rich in easily digestible protein and omega 3 fatty acids. (Hulled hempseed retails for up to NZD$70 per kilogram); or
- Three metric tonnes of hemp fibre, valuable for the manufacture of rope and textiles – retails for around NZD$2 per kilogram;or retails for around NZD$2 per kilogram; or
- Six metric tonnes of hemp hurd (pulp),useful for the production of paper and construction materials such as hempcrete (retails for around NZD$1 per kilogram).
Returns From Hemp
- Seed prices per ton NZ$4,000-5,000
- Fibre prices per ton US$500 – depends on the specification
|Yield||800-1,000 kg||8-10 tonnes Dry Weight|
|Value per kg||NZ$4.00-NZ$5.50||$225/350 kg Bale|
|Seed rate and cost $20/kg||1-30 kg = $20-$600||30-50 kg = $600-$1,000|
These calculations are estimates, and are subject to environmental and other conditions, which could cause crop failures and no earnings. Irrigated land can yield higher than the target ranges above.
What are the Growth prospects for the NZ Hemp Industry?
- Fibre (bast and hurd) is available and used for animal bedding but will be able to develop further when the first decortication plant is built later this year. The industries which have shown interest in substituting hemp fibre for less sustainable raw materials include Road building and Supermarket packaging. Kiwi university researchers are actively pursuing several innovations with commercialisation options.
- The lesson from Wine and Kiwifruit among other high value food industries is that substantial industry growth will only be achieved through an aggressive export strategy, and hemp can respond to this challenge. Some hemp seed companies are already beginning to export.
- The hemp industry has much to learn about ‘discerning consumer markets‘ from the wine, honey, kiwifruit, and the natural health products exporters, which have implemented successful high value export strategies utilising the powerful New Zealand country ‘brand story’.
(Status quo) is simply based on a political failure to reform the current regulations: Which removes nutraceuticals but leaves the seed and fibre products estimated at $500 million with around 5,000 new jobs
Is based on political reform of the nutraceutical regulations, and forecasts total earnings of $2.0 billion; from $183 million in seed products, and $317 in fibre products, $1.5 billion in hemp nutraceuticals from cannabinoids, and 20,000 new jobs in the regions.
Regional growth – How hemp is grown and processed in regional clusters building on the platform laid by existing companies:
Hemp Connect, Pure Heart Aotearoa, Hemptastic,Aotearoa, Hemp NZ, Hemp Farm, Ligar Extraction, Kakariki Fine Foods and Kanapu
Midlands Nutritional Oils, NZ Yarn, Hopefield Hemp, Larrys Gold, Hemp Cottage Farm
|2030 NEW ZEALAND HEMP INDUSTRY SCENARIO 2||Domestic market||Export market||Total market|
|CANNABINOID EXTRACTS PRODUCT SALES
|HEMP SEED OIL PRODUCTS SALES
FIBRE PRODUCT SALES
|NEW JOBS CREATED||5,000||20,000|
With the benefit of hindsight the laws and regulations governing the hemp regulations in NZ had unforeseen negative consequences. These are now restricting the competitiveness of NZ in this global sector which is
growing at a rate of 20% per year and is expected to reach around NZD$90 billion by 2030.
Hemp offers major export driven economic growth and regional jobs if/when the current regulations are tweaked to open up the fast growing cannabinoid food ingredient and nutraceutical global market to NZ companies. (See legal discussion pg 46-48 of THE FULL REPORT) – https://joom.ag/attC/p46