Hemp Legalization in Canada

The regulations define industrial hemp as “cannabis plants whose leaves and flowering heads do not contain more than 0.3% THC.” Any part of the plant identified in Schedule 2 of the proposed Cannabis Act, such as a non-viable seed or mature stalk without any leaf, flower, seed or branch, would fall outside the scope of the proposed Act. As such, activities related to these plant parts (such as their processing or sale) would not require a licence under the proposed Act. Further, as is currently the case under the Industrial Hemp Regulations, a licence would not be required for the sale of derivatives of seed and grain that contain 10 micrograms per gram of THC or less.

Industrial hemp does not include non-viable cannabis grain (except for its derivatives), bare mature stalks and fiber derived from these mature cannabis stalks. Hence, performing most activities with these parts of hemp does not require a license. It should be noted that production of products or derivatives from viable hemp grain (used to produce hemp seed oil and hulled hemp seed for example) does require an industrial hemp license.

In 2018, the Cannabis Act and the new Industrial Hemp Regulations set out clear guidelines for hemp. The Cannabis Act clears the way for whole hemp plant utilization. Industrial hemp licenses would authorize the intra-industry sale of leaves, flowers and branches (or the whole plant). That means licensed industrial hemp producers can sell the flower to someone who has permits to process and sell CBD.

Only seeds of approved industrial hemp varieties found in the List of Approved Cultivars can be used for industrial hemp cultivation.

Canada’s Commercial Hemp Industry

Canada’s commercial hemp industry is fairly new: Canada began to issue licenses for research crops in 1994, followed by commercial licenses starting in 1998. Since hemp cultivation was legalized in Canada, production has been variable year to year but generally increasing – which some attribute to increased import demand in the United States. Acreage has ranged from 48,000 planted acres in 2006 to about 8,000 acres in 2008, rising again to 100,000 acres in 2014 but then sharply dropping back again to 33,000 acres in 2016. In 2017, acreage in hemp cultivation and production rose sharply – reaching a record of 138,000 acres.

In 2019 36,900 hectares of industrial hemp were planted. After a 72% fall in 2020 to 21,400 hectares of planted industrial hemp, there was an upward trend, reaching 31,100 hectares in 2022. However, the hectarage then began to fall. According to most recent data from Statistics Canada, there were just 14,800 hectares of industrial hemp planted in 2024. However, acres of hemp planted recovered slightly in 2025 to 37,800 acres. Manitoba accounted for around 38% of planted hemp acreage in 2024, followed by Alberta (26%) and Saskatchewan (19%). In 2025, Manitoba increased its share to nearly 42%.

In 2023, nearly half of the hectarage for industrial hemp cultivation was dedicated to growing for grain – 10,497 hectares – followed by fiber at 3,260 hectares (around 15%). In 2024, the focus shifted more to hemp flower – hectares of hemp fields planted for flower reached 4,607 hectares which is more than 5 times the number in 2023. While grain hectarage remained dominant at 8,396 hectares, fiber hectarage slid to the third place with 1,865 hectares, losing its spot to flower.

The number of cultivation licenses has also varied from year to year, reaching a high of 560 licenses in 2006, followed by a low of 77 licenses in 2008 and rising to 340 licenses in 2011. Since then, the number of licenses has risen to 711 (1,226 total industrial hemp licenses) issued in 2018, 731 (866) in 2019, 1,091 (1,269) in 2020, 903 (1,050) in 2021 and 872 licenses for cultivation (992) in 2022. In 2023, there were 737 active industrial hemp licenses.

In 2022, Canada exported 5,800 metric tons of hempseed cake (by-product of crushing grains), worth $6.5 million. This was exported mainly to India and Japan. In the same year, Canada also exported around 480 metric tons of processed hemp fiber, valued at $675,000.

Data from the USDA reveals that over 3.3 million kilograms of hemp seed for consumption were imported into the US from Canada both in 2023 and 2024 – more than 90% of the grand total imported in each of those years. From January 1 to July 23 of 2025, the US has already imported around 2.1 million kilograms of hemp seed for consumption, accounting for 90% of the total amount imported. This reaffirms Canada’s continuing position as the main supplier of hemp seed for the US. Manitoba in particular consistently accounts for 70%-80% of the annual imports of hemp seed for consumption into the US.

Sales of hemp in Canada were estimated at $525 million in 2022, with $84 million in exports (over 90% went to the United States). According to marketing analysis reports by Technavio, the global industrial hemp market size is set to reach $6.47 billion by 2026 with a CAGR of 17.7%. Canada’s favorable climate and long daylight hours create optimal conditions for high-yield hemp cultivation.

Proficient Market Insights projects the global hemp-derived CBD oil market size to reach $3.15 billion by 2028, exhibiting a CAGR of 28.3%. Market estimates for the value of hemp-derived CBD in Canada are limited, but researcher Jan Slaski of InnoTech Alberta has predicted the overall Canadian hemp industry could be worth $1 billion a year. In March 2025, Health Canada proposed making CBD products available without a prescription, and requested feedback from stakeholders and consumers until June 5, 2025. Proposed regulations are expected to be posted in late 2025. In Canada, CBD products are currently regulated in the same way as all cannabis products which prevents the market from quickly developing. According to a 2020 report by the Institute of Fiscal Studies and Democracy (IFSD), a mature CBD market could bring $1.9 billion to Canada’s GDP in the first year, and then grow by 7% each year.

Based on the findings of a study on the use and perceptions of CBD products in Canada and in the US, around 16% of adults in Canada have used CBD products in the past 12 months. Most of the respondents in Canada reported consuming CBD through drops (47.3%).

If new regulations are developed and CBD products can be sold without a prescription, then CBD use will likely increase due to easier access. There is evident interest in CBD products among consumers and businesses in Canada, demonstrated through the results a report published by Health Canada in September 2020 which revealed that 61% of consumers and 62% of industry representatives among consultation respondents were interested in cannabis health products for human and animal use. There was strong interest expressed in making CBD available for therapeutic purposes without practitioner oversight.

Source: hempcbdbusinessplans.com.

Canada Hemp/CBD Market Infographics

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