Matt Hall, vice president of external communications at Winson-Salem, North Caorlina-based Hanesbrands, said the idea isn’t to replace cotton. But if Crailar can be commercialized, it would mean being able to produce organic fibers for everyday products at competitive prices.

Hemp grows faster and uses far less water than cotton, making it a favorite among champions of sustainable apparel, which was a $3 billion international market in 2007, according to a report last year by Packaged Facts, a division of MarketResearch.com.

Even so, Naturally Advanced is eyeing more than just apparel markets.

In what could be an equally sizable deal, the company in June signed a development deal with Georgia Pacific Consumer Products LP, which makes household paper products such as Brawny paper towels. Barker said he was prohibited from disclosing details of the agreement.

It also reached a spinning and trademark licensing deal with Patrick Yarns of Kings Mountain, North Carolina, a maker of industrial yarns, to produce Crailar products for denim, work wear, home furnishings and carpet markets.

The company’s also developing uses of the technology applicable to forestry pulping and as diesel fuel.

Until now the company generated revenue from HTnaturals Inc., a wholly-owned sustainable apparel company. Last week it announced second-quarter sales of $401,000, down from $580,000 a year ago.

But now the company is shuttering HTnaturals and expects to generate its first revenue from Crailar in the next quarter. The anticipated revenue—the amount of which Barker declined to release—will be generated through a manufacturing agreement with Philadelphia dyehouse G.J. Littlewoods & Son Inc., which will produce the fabric ordered by Patrick Yarns.

“As we introduce Crailar into the market and into the industry next year, we’ll start generating the revenue everybody’s been waiting for,” Barker said.