HEMPALTA is one of our companies to watch in 2023 as the hemp producer from Calgary has been recognized by Foresight as a top investable cleantech company in Canada.
Just a year old, the company’s mission is to be at the forefront of what it calls the next evolution in agriculture utilizing advanced technology to create and produce hemp-based products for a healthier and sustainable planet.
Darren Bondar is HEMPALTA’s CEO and a serial entrepreneur who most recently was the Founder and CEO of Inner Spirit Holdings, the public company which built Spiritleaf into Canada’s leading cannabis retail brand before it was sold to SNDL Inc. in 2021.
Darren connected with Fintech.ca to talk about how he pivoted into the hemp industry and where he sees 2023 taking him and his new business ventures.
If we do this interview a year ago, you’re in a very different place. Tell us about how you entered the hemp business.
DB: Well, a year ago I was coming off having sold Spiritleaf, then Canada’s leading cannabis retail brand, to SNDL. It was the result of many years of hard work and some great support by a team of wonderful people and from our loyal investors.
I took some time to relax, scout business opportunities, created a capital pool company called Trail Blazing Ventures, and then this hemp business opportunity entered my radar. It was an opportunity to acquire industrial hemp processing assets and a products division from Canadian Greenfield Technologies who were operating right here in Calgary. The arrangement included obtaining exclusive use in Southern Alberta of a patented and high-tech HempTrain unit to process the industrial hemp and create the products.
I liked the industrial hemp industry for its dynamic growth opportunities. The global market value for industrial hemp is projected to triple between 2022 and 2026. Hemp fiber has been used for many years to make paper, clothing, food and rope, and most recently the hemp flower has been used to extract cannabidiol or CBD. With HEMPALTA, we’re focused on the hemp fiber component of the crop. But what we do with it is different as we apply our technology to process hemp on a commercial scale to produce a variety of consumer and bio-composite building material products.
Your entry into hemp is truly a case of an entrepreneur seeing an opportunity where many others have not.
DB: I was very excited to launch HEMPALTA in 2022 and take the new brand into an industry we think holds significant growth potential. Bringing HEMPALTA to life has taken great passion and a talented team. We developed a strong relationship with the people at Canadian Greenfield and they have been supportive of us every step of the way. We own and operate one of their specialized processing plants, and they have joined us as a shareholder in our new company. Our base is really solid.
The new company is an industry leader in the agricultural technology field due to the innovative hemp processing operations. We’re processing industrial hemp into clean, high-value fiber, green microfiber and hurd (the woody interior of the hemp stalk). The outputs are then used to create a number of consumer products such as food preservation pads, pet litter, animal bedding, and a natural organic soil amendment.
Being named a Foresight 50 company is an accolade we noticed at Calgary.tech. What does it mean to you?
DB: The Foresight recognition was important to us. It told us we’re in the right space and doing the right things. We contribute to sustainability efforts by utilizing what is considered one of the world’s most sustainable crops as hemp is a renewable, reusable and recyclable resource. The 100% natural hemp feedstock used by HEMPALTA is grown right here in Southern Alberta, home to some of Canada’s largest hemp acreages, but with no processors around the hemp has traditionally been considered agricultural waste. Our company’s production facility effectively converts all hemp feedstock into high-value product streams, so it operates as a near zero waste manufacturing facility.
You talk about supportive partners, right from your days with Spiritleaf. What has that enabled you to do?
DB: First off, we have a talented and experienced group of employees and advisors to guide HEMPALTA and craft our business strategy. Our management team includes Brittany McKell as General Manager, who joined us after five years with Canadian Greenfield in marketing and manufacturing roles, and Pete Knechtel in Business Development who handles sales and client relations.
Major shareholders in HEMPALTA include Prairie Merchant, a company run by W. Brett Wilson, and Fullbrook Thorpe Investments, a UK-based private equity fund. These partners have been supporting us for years. We’ve also received financing from Farm Credit Canada which is a Crown corporation. We’ll work on bringing additional investors on board this year.
Your crowdfunding campaign last year was a bold move. How did that work out?
DB: We had strong support from our traditional backers as I mentioned. I wanted to expand that and enable additional investors the ability to get in on the ground floor for HEMPALTA. We did a crowdfunding round on FrontFundr and with the support of existing shareholders raised just over $1 million. The financing is being used to fund strategic technology acquisitions as well as support sales and marketing activity.
The crowdfunding campaign was also an opportunity to welcome a number of retail investors who support HEMPALTA’s mission to better the planet. We’re pleased to add investors like this who look to fund sustainable and planet-friendly practices.
2023 is upon us. You sound like a leader who knows where he wants to take his company.
DB: Since HEMPALTA’s launch in 2022, the company has made significant improvements to its product lines, production scalability, and distribution channels. We’re selling product in Canadian retailers such as Sobeys, Safeway Canada and Calgary Co-op as well as on online sites such as Amazon, Walmart, Lowe’s and Loblaws.
We’re on the cusp of adding a sizable and potentially lucrative new market by using our optimized hemp hurd in hempcrete formulations. Hempcrete is an environmentally friendly alternative to insulation, made from a mixture of hemp stalk hurds and lime binder. The resulting product is safe, durable and sustainable.
The product can also contribute to achieving net-zero GHG emissions in the residential construction sector. Home building companies are committed to providing sustainable, net-zero homes. These commitments coincide with legislation changes to building codes and government climate action plans. Canada’s desire to achieve net-zero emissions by 2050 is no longer a goal. The Canadian Net-Zero Emissions Accountability Act, passed in June 2021, has made it law. That gives Canadian homeowners just under three decades to consider how they will transition to a net zero home, one that produces as much energy as it consumes.
Last year hempcrete was approved as a material for use in U.S. residential construction with those changes to fully take place in 2024. We are optimistic those opportunities can also be adopted into Canada, which in my opinion are long overdue.
We think we can disrupt environmentally destructive products by targeting the growth potential of industrial hemp fiber. It’s exciting as our hempsulation product can be positioned for the U.S. residential construction sector in the near term and would supplement our business in that major new market.
You’re brand new to the cleantech space here in Calgary. How has year one gone?
DB: We have learned so much in our first year. Our HEMPALTA team has been great at building the brands, fine-tuning production and applying the technology to improve our business. I’m so proud of where we’ve gotten to.
We’ve also found the cleantech community to embrace what we’re trying to accomplish in terms of us finding innovative ways to develop hemp-based products that are good for the environment and minimize the damage being done to the planet.
Our Foresight recognition was a great way to end the 2022 year and propel us into 2023. We are getting more acquainted with the cleantech community and think we can continue to make substantial advances for our business in the coming year. There are funds we are looking to access and grant opportunities which seem perfect for our business model. We’ll pursue those in the coming year and look to really build on the foundation we established in our first year.
Earlier you mentioned another business called Trail Blazing Ventures. Can you share an update on that venture?
DB: After I sold Spiritleaf, I worked to set up a capital pool company or CPC to seek out business opportunities that I could help take public. This was a chance to keep flexing the entrepreneurial muscle and stay connected to inspiring business ideas. We received strong interest from a core set of investors and Trail Blazing Ventures was born. It’s about a year old and the CPC is basically seeking to unlock a company that needs financial and corporate support to drive its growth. We’ll see how things come together this year as I’m quite optimistic about the prospects.
Leave a Reply