A new mandatory hemp levy has gone into effect in Canada, marking a key step toward establishing stable industry funding for research, promotion and market development after years of relying heavily on voluntary contributions.
The 0.5% levy took effect last month under an order approved by the federal Farm Products Council of Canada (FPCC). It is payable to the Canadian Industrial Hemp Promotion-Research Agency (CIHPRA), which operates as Hemp Canada Chanvre (HCC).
According to the Canada Gazette, the federal government’s official publication, HCC was established to “coordinate a national approach to funding research and marketing activities,” boost competitiveness, expand exports and open new market opportunities.
Boost for CHTA
The new system promises a more stable foundation for the Canadian Hemp Trade Alliance (CHTA) and the industry programs it has long supported through voluntary contributions, membership revenue and government funding.
CHTA and HCC are expected to work closely together, with HCC funding eligible research, promotion and market-development activities and CHTA carrying out some programs and sharing certain operational resources with the agency.
The Hemp Producers Committee, an industry group that developed the proposal for the new agency, estimated initial levy revenue at about C$200,000 (US$145,000) annually. The committee said that could potentially rise above C$400,000 (US$290,000) over the longer term as hemp acreage, production and prices increase.
Important step
The move represents the most important step since the federal government established HCC in November 2024, putting the financing mechanism at the heart of the agency’s mandate into operation.
The levy applies to hemp products sold in interprovincial trade, and when hemp produced in one province is sent to another for processing. It covers planting seed, grain, stalk, flower, leaf, extraction biomass and several other raw and intermediate products.
Money trail
The initial levy is in place for one year, according to the official order published in the Canada Gazette. The provision imposing the 0.5% charge ceases to have effect Aug. 4, 2027, giving HCC one year to implement the levy before determining whether and how the funding mechanism should continue.
That gives HCC its first year to establish the collection system, determine how levy revenue is allocated and begin putting the money into promotion, research, and market development.
According to the federal levy order, buyers deduct the 0.5% levy at the first point of sale and send the money to HCC through a collector appointed by the agency. When hemp grown in one province is processed in another, the processor pays the levy on behalf of the producer.
The levy formalizes a funding model that Canada’s hemp sector had already been using voluntarily. CHTA previously operated a voluntary 0.5% checkoff.
Agency formed
CIHPRA was formally established in November 2024 under Canada’s Farm Products Agencies Act, becoming the country’s first promotion-research agency for an agricultural product of non-animal origin. The organization subsequently adopted Hemp Canada Chanvre as its operating name.
The agency is governed by a board representing hemp producers, importers and the supply chain. Will Van Roessel, an Alberta hemp grower, is chairman; Reuben Stone, who farms hemp in Ontario, is vice chairman; and Syeda Khurram, previously chief operating officer at the Alberta Barley and Wheat Commission, is executive director.