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Thanks to the federal government’s recent statewide legalisation of cannabis, an economic boom is sweeping the Prairie Provinces. Industrial Hemp has the potential to become one of Canada’s most profitable cash crops for the first time.
Hemp is a close relative of marijuana, but it has almost none of the psychoactive chemical tetrahydrocannabinol (THC), which causes people to get high when they smoke or consume marijuana. On the other hand, Hemp includes significant levels of cannabidiol (CBD), a non-psychoactive chemical that has been shown to help with seizures, chronic anxiety, and pain.
Hemp production in Canada was severely regulated until late last year. Farmers who wanted to produce industrial Hemp had to pass a criminal background check and only collect the stems and seeds, and the CBD-rich leaves, buds, and flowers were let to decompose in the field.
Prospective farmers can now produce Hemp more easily than ever before, thanks to the government’s legalization of pot in 2018. Licensees can now harvest the entire hemp plant, including the flowers, buds, and leaves, and extract CBD from them.
Investors from all over Canada are flocking to the Prairie Provinces to look into the possibility of buying and investing in hemp farmland. Hemp is a versatile and relatively easy-to-grow cash crop. The plant’s fibres are utilised in a variety of textile and industrial applications, while the seeds are a good source of Omega-3 fatty acids and are frequently pressed into cooking oil. Everything from bed sheets to seizure meds to protein supplements is made from Hemp, and it is in high demand.
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The plant’s popularity is increasing
The legalisation of cannabis across the country has resulted in a surge in demand for CBD and other cannabis-derived goods.
While many people identify cannabis-infused goods with THC, a growing variety of products emphasise the supposed health benefits of CBD, which is non-intoxicating. CBD is now found in a variety of items, such as sparkling water, dog biscuits, and even brews. There are even nationwide shortages of CBD-infused items due to excessive demand.
Looser regulations governing the manufacturing and sale of Hemp and cannabis around the world are also resulting in a far broader market for CBD-infused products. Hemp was just legalised in the United States (though cannabis remains illegal at the federal level). CBD products are now being allowed to be imported into many Asian and European countries.
Textiles made from Hemp are likewise becoming more popular. Hemp fibres are long, durable, and resistant to rot, which affects other plant-based fibres. In comparison to many other textile commodity crops, Hemp is also a rapid and efficient crop to grow.
It’s worth remembering that the hemp business in Canada has had booms and busts in the past. Farmers dedicated progressively huge amounts of area to industrial Hemp as the seeds became an important health food staple, notably in South Korea, following the legalisation of the crop in 1998. Exports to South Korea mostly halted as China began developing its industrial hemp output, and the Canadian hemp market collapsed.
This past does not appear to be stopping Canadian hemp growers from attempting large-scale production once more. This year, the amount of hemp acreage in Canada is set to increase to 82,000 acres.
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What is the best way to invest in hemp farmland?
You might be wondering how to approach investing in hemp farmland, if you’ve decided to begin investing in Hemp growing as a unique, innovative way to diversify your portfolio.
It’s a good idea to start by looking at some of the ways people add farms to their portfolios. If you’re looking for a unique real estate investment opportunity, chances are you’re not an agricultural professional. As a result, you’re unlikely to want to start investing in hemp farmland.
Some real estate investors choose to buy farmland directly and manage it with the help of an agricultural team. Agricultural professionals that specialise in the production of specific crops can be found in plenty. If you want to begin investing in Hemp production, you’ll need to think about licence requirements as well as previous hemp production experience.
If you don’t want to buy farmland directly but still want to include it in your investing portfolio, look for an agriculture-focused real estate investment trust (REIT). In addition to REITs, mutual funds and exchange-traded funds are two other forms of funds that investors can use to add agribusiness to their portfolios. Many cannabis businesses in Canada are now publicly traded stocks as well.
There are a few things to keep in mind for the intrepid investor wanting to buy lands for investing in hemp farming.
Hemp, like many crops, is only lucrative when grown in large quantities. This means you’ll need to plant at least 50 acres of Hemp.
Hemp can be grown in a wide range of climate conditions. Plants can grow in hot, humid conditions with well-drained soil, and Hemp also does not thrive in desert or alpine conditions. This means that more hilly portions of Alberta, in particular, are unsuitable for investing in hemp farming.
While it is currently easier to cultivate Hemp in Canada than it was previously, it is still more heavily controlled than wheat or barley production. To process and extract CBD from hemp buds, flowers, and leaves, you’ll need to engage with a licenced cannabis company. Many CBD processors are struggling to keep up with the amount of Hemp that has to be processed due to increased market demand.
In a growing market, this is a once-in-a-lifetime opportunity
Due to the fact that Hemp is still a specialty crop, it is considered a high-risk, high-reward venture. While placing all of your eggs in one basket with CBD may not be a good idea, investing in Hemp and CBD can be a profitable investment for investors trying to diversify their portfolios.
While acquiring farms directly can be unreasonably expensive and difficult to acknowledge, you can still begin investing in Hemp through REITs, mutual funds, and publicly traded companies.
So, if you are interested in investing in hemp farmland and expanding your portfolio, we want to help you. All you need to do is click the link below to book your free strategy call with us at LendCity today.