by Nigel Jeffries | Oct 8, 2018
Amidst the steady flow of rancor and partisanship coming from Washington, there is one piece of good news that has not made many headlines. Congress may be on the cusp of removing hemp from the federal controlled substances list and officially classifying it as an agricultural commodity.
Provisions of a standalone bill titled the Hemp Farming Act were included in the larger Farm Bill that recently passed both the House and the Senate. However, the House blocked language to make hemp legalization part of their version of the bill, language the Senate included.
Therefore, a bicameral conference committee must combine both bills into a single piece of legislation that will then go to the president. There is no guarantee that hemp legalization will make it into the final version of the Farm Bill, but the chances are reasonably good considering the bipartisan support legalization currently has. Hemp and marijuana both come from the cannabis sativa L plants but have different attributes. Hemp does not have the psychoactive properties because it has far lower levels of tetrahydrocannabinol (THC) than marijuana. Hemp is cultivated from the stalks and seeds of cannabis sativa plants, which has very low THC content, and not the flower or buds like marijuana.
Traditionally hemp has been used to make thread, cordage, paper, and cloth due in large part to its exceptionally robust and durable qualities. The National Hemp Association contends that industrial hemp has up to 50,000 uses, from agricultural and medicinal to applications in biofuels and construction material. Currently, Canada, China, and Europe grow most of the hemp used to make products in the United States. America used to treat hemp like any other agricultural commodity until the early 20th century when Congress passed the Marihuana Tax Act of 1937. That act levied prohibitive taxes and licensing requirements on farmers of hemp fibers and sellers of hemp products.
During World War II, America’s supply of hemp from the Philippines was cut off. To meet the necessary wartime demands for hemp, the federal government lifted restrictions, issued special permits to farms, and subsidized hemp cultivation. Hemp cultivation went back to the status quo after the war when the restrictions and licensing requirements were re-imposed.
The Controlled Substances Act of 1970 classified the Cannabis Sativa L plant as an illegal schedule I drug (a classification it shares with heroin, LSD, and ecstasy). This, in turn, imposed strict regulations on the cultivation and research of hemp as an agricultural commodity. Growing hemp was not prohibited per se; however, growers were required to register with the Drug Enforcement Administration (DEA) which made for a nearly impossible barrier to entry into the market considering the potential civil and criminal liability growers faced for even minor infraction.
The 2014 Farm Bill allowed states to implement laws enabling state departments of agriculture and universities to grow hemp for research purposes. Since 2014 some thirty plus states have industrial hemp programs for research purposes. This allows researchers to grow hemp through registration with state regulatory agencies rather than the onerous and costly process of registering through the DEA. However, the 2014 Farm Bill did not permit hemp cultivation for commercial purposes. Some states have simply ignored the federal prohibition and legalized licensed commercial hemp cultivation within their state borders.
Some states did this prior to 2014. Still, growers are not able to sell their raw plants and cannot transport them across state lines under federal interstate commerce regulations until after the first phase of hemp processing. Many states have utilized hemp research and pilot programs to great effect, but have since realized that the benefit to the several states will not come unless the restrictions at the federal level are loosened.
There is an artificial ceiling on the productivity and success of state hemp industries so long as the federal government regulates hemp in the same manner it regulates schedule I drugs. Several essential benefits to hemp commercialization come with federal legalization.
First, it will give states ultimate control over their hemp industries without unnecessary federal intervention. With less federal restrictions and more state control comes innovation.
Next, lifting the restriction on interstate commerce in hemp seeds, plants and products will allow the industry to establish domestic supply chains and tap new commercial markets both domestically and internationally.
Last, federal hemp legalization will open up banking and other financial services to hemp farmers, sellers, manufacturers, and entrepreneurs that have previously either been prohibited or discouraged due to hemp’s designation as a schedule I drug. Access to capital will increase the viability of hemp as a cash crop. Hemp legalization is a significant step in the right direction and one that has not received a lot of attention although it has the potential to make a significant economic impact in the coming years if signed into law.
by HempingtonPost | Mar 9, 2017
This article is reprinted from the State of Hemp market report with permission from Hemp Biz Journal. –
A green wave of opportunity is sweeping America
and it shows no sign of stopping. Hemp Biz Journal estimates that the U.S. hemp industry reached $593 million in sales in 2015 and project it to reach $1.8 billion by 2020. Hemp industry insiders say they’ve seen this coming for the better part of a decade. With hemp growing legally in 26 countries, the U.S. has lagged the global hemp market, embroiled in a prohibition dating back to the 1930s. Spurred by legislative changes and a more tolerant political climate for cannabis, states like Colorado, Kentucky, Tennessee and North Carolina are starting to see their memories of hemp prohibition fade away. Now the young U.S. hemp market is experiencing a new set of problems: growing pains.
With these growing pains comes the opportunity for entrepreneurship, investment and innovation for hemp cultivation, hemp manufacturers andthe US economy at large. Driven by a competitive American culture, a good old-fashioned work ethic, and a strong agricultural backbone, the U.S. hemp industry is poised to deliver on a century of promises to become a billion-dollar industry.
This means more jobs and opportunities across the entire hemp value chain. With full federal legal commercial cultivation and processing all but imminent for the U.S. hemp industry, the dialogue among hemp CEOs and thought leaders has shifted from how we legalize hemp to how we nurture this young industry and use it as a stabilizing force for the U.S. economy.
The Economic Data of the Hemp Industry
Hemp Biz Journal research showed consumer sales of hemp products rose to $400 million in 2014, up 33 percent over a year earlier. The market continued at a similar pace for 2015 and is poised for tremendous growth in several consumer categories in the not too distant future.
According to the Hemp Industries Association, the industrial product sector was led by automotive composites with nearly $100 million in sales. Hemp Biz Journal estimates that by 2020, industrial products including automotive, green building, oil well liners, and non woven or technical fibers will storm the market and contribute 32% of overall hemp consumer sales, up from 20% in 2015. The U.S. hemp industry will grow from a niche industry filled with activists and startups to a nationally recognized market expected to reach $1.8 billion in sales in 2020. In all, the U.S. hemp market will be a catalyst for innovation and spur growth across the broader global market. Truly, these are exciting times filled with potential and opportunity. Now that the seeds are planted, it’s on all of us to grow the industry we’ve imagined.
HBJ showed sales of hemp based products like automotive parts, oil well linings, insulation, fiberglass, biofuels, bio-plastics and animal bedding and feed accounted for about $116 million in sales in 2015, and is projected to skyrocket to approximately $575 million by 2020. This growth will be highly dependent upon increased domestic hemp production and the addition of the appropriate processing facilities located stateside.
By the numbers: the U.S. Hemp Industry Today
While the global hemp industry races ahead, the emerging U.S. hemp industry is reaching a tipping point. The federal government now allows farmers to partner with state agriculture departments and institutions of higher learning to plant “pilot project” test crops on U.S. soil. Over the last decade, a small hemp market has developed in the U.S. that has relied on imported hemp —both finished goods and raw materials.
These hemp-based goods have largely consisted of personal care products, foods and textiles, which currently account for almost two-thirds of the U.S. hemp industry’s total sales, or $340 million in consumer sales in 2015. HBJ estimates that hemp-based food product sales accounted for 15 percent of hemp consumer sales in the U.S. in 2015. Sales reached $90M in 2015, with hemp seeds and hemp milk being among the most popular categories. While the hemp food market has grown tremendously over the last few years, nearly doubling since 2012, it is still a small segment of the natural foods industry. According to Nutrition Business Journal, total sales of natural and organic foods in the U.S. reached $70 billion in 2015, which equates to a nascent penetration of about one-tenth of a percent for hemp foods. This penetration is highest in the snack food category, where the popularity of hemp seeds has allowed close to a 1 percent penetration.
The natural and specialty retail channel, including chains such as Whole Foods Market and Sprouts Farmers Market as well as thousands of small health food stores, is currently the most popular place to purchase hemp food products, with HBJ estimating that this channel contributed approximately 70 percent of sales this year. Because food is one of the more established segments in the hemp market, HBJ projects average annual growth of hemp foods to be 16 percent for 2015-2020, which is slower than many of the emerging hemp industry segments but slightly above the natural and organic food market as a whole.
s currently very small compared to the overall supplement market, which according to Nutrition Business Journal will reach $38.6 billion in 2015 on 5 percent growth. Other consumer products that contain hemp include pet food and supplements, household cleaners, cigarette paper, traditional paper products and jewelry and craft items such as twine. These other products contributed between $10 million and $15 million to
the hemp industry in 2015 and remain the smallest product niches. HBJ predicts sales of hemp based industrial, composites and CBD products will post the strongest growth over the next five years.
Interest in CBD extracted from hemp is on the rise, thanks in large part to the fast paced growth of the legalized adult use cannabis industry. Hemp experts see the market for industrial hemp as potentially greater than that for consumer adult use cannabis sales driven by the DEA rescheduling from Schedule I to Schedule II. This rescheduling will have an enormous impact on the hemp industry, and healthcare industry at large.
The Hemp Biz Journal estimates the size of the Hemp CBD market alone to have risen from a market that didn’t exist a few short years ago to an $85 million market in 2015. We expect growth in sales of these products will be one of the primary drivers of the broader hemp industry, with a compound annual growth rate of 33 percent forecast for 2015-2020.
The U.S Hemp industry is poised for tremendous growth that will fuel a green, sustainable revolution for the U.S. agriculture and healthcare industries. We look forward to helping hemp stabilize the U.S. economy for decades to come.
About Hemp Biz Journal:
Hemp Biz Journal is the premiere source of hemp industry market data and intelligence. The company published the State of Hemp and CBD Report, the definitive reports on the Hemp Industry and the emerging CBD segment. Learn more at http://HempBizJournal.com
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