The provincial government is giving $500,000 towards the expansion of a Manitoba hemp-processing plant — an investment it says is the first of its kind in Canada.

Plains Industrial Hemp Processing Corp. is based in Gilbert Plains. The company currently manufactures hemp pellets, animal bedding and insulation, the province said in a statement issued on Tuesday.

However the company is expanding its business to be able to make hemp fiber. The new plant will allow it to produce 18,000 metric tonnes of fibre a year, Agriculture, Food and Rural Initiatives Minister Stan Struthers said.

Hemp is the common name for the cannabis plant, which has fibrous roots, stalks and stems useful for producing a variety of products and seeds that are edible.

The flowers, buds and leaves of some strains are used to produce drugs such as marijuana and hashish because they contain a psychoactive compound called tetrahydrocannabinol (THC), but industrial hemp is bred to produce very little THC.

Struthers said the plant expansion will create local jobs in the central Manitoba community, located 350 kilometres northwest of Winnipeg.

The $500,000 for the plant will come from a provincial fund for rural economic development, the province said.