The hemp plant is one of the oldest cultivated crops utilised by humans, having been used for paper, textiles and food for more than 10,000 years.
The Columbia History of the World reveals that the oldest relic of human history is a scrap of fabric made of hemp dating back to 8000BC.
Back in the 18th century, The Declaration of Independence was drafted on hemp paper, as was the well-known Alice in Wonderland by Lewis Carroll. Even some ancient Bible papers still remain made of hemp to this day.
The global industrial hemp market is predicted to experience huge progress, with a projected annual growth rate of 18.3% from 2018 to 2027. The report predicts that within the hemp sector, CBD will experience the highest annual growth rate, boasting a 18.6% rise, dominating all other segments within the hemp market.
There has been a meteoric 368% rise in the number of acres taken up by hemp farming over the past year, beating the likes of maple, flax, hazelnuts and oranges with ease. Last recorded in August 2018, there were 27,424 acres of hemp being grown across the US, with that number now rising to 128,320 acres of land.
From a solely profitability perspective, hemp farms can net the farmer around 30,000 dollars per acre. Comparatively, the recently trendy soybean can only net 500 dollars per acre.
This is a stark contrast to times in the late 80s when the US government destroyed its last remaining stockpile of hemp seeds as to conform with new federal prohibition. Within the US, hemp was a viable and legal crop spanning through the 18th and 19th centuries, only gaining a banned status after the controversial war on drugs and the Controlled Substances Act in 1970 which banned the production of industrial hemp.
Coming full circle in 2019, the United States is now the third largest global hemp producer, closing in behind China and Canada.
Satisfying the environmentally friendly minded, hemp is much more sustainable than most traditional crops as it requires less water to grow and, in most cases, no pesticides are needed as the plant naturally repels pests. Hemp also breathes in CO2 as it grows whilst also detoxifying the soil by transforming contaminating metals and preventing further soil erosion.
Demand needs supply
Around 14% of American adults are currently taking CBD, equating to an enormous 49 million people. Usage has risen in correspondence to last year’s change in federal law – the long awaited US Farm Bill, which removed hemp from the official narcotics list, making the controversial crop legal to grow and produce.
With the supply chain growing exponentially in accordance to demand, the rise in interest in hemp is fuelled by the increasing awareness of potential health benefits as well as the optimistic view on future laws changing in favour for industrial hemp growth, alongside the increasing demand for hemp and cannabidiol-based products.
While mostly used for industrial products, hemp is also useful in creating an array of commercial items such as paper, textiles, clothing, paint, insulation, biofuel, food, animal feed and biodegradable plastics. CBD is also extracted from hemp, which is defined by law as cannabis sativa with 0.3 percent or less THC content.
A congressional research paper states that impressively, the global hemp market consists of more than 25,000 products within nine main submarkets; agriculture, textiles, recycling, automotive, furniture, food/beverages, paper, construction materials and personal care.
The multitude of uses make hemp one of the most versatile crops available. However, up until recently its main use in the agricultural realm was for animal and bird feed, as a 2013 study showed that of the estimated 6,000 tonnes of hemp seeds per annum produced in Europe, 95% were used for such purposes.
The first and only hemp seed bank in the US has officially begun construction in upstate New York. The Industrial Hemp Germplasm Repository at Cornell University’s AgriTech facility will be undertaking the “characterising, maintaining and distributing seeds, while also helping to identify genes for pest and disease resistance”.
The federally-funded project was kickstarted by Senate Minority Leader Chuck Schumer, who led a legislative charge to finalise the program and eventually secured 500,000 dollars in federal cash to begin construction of the seed bank.
PanXchange, a physical commodities OTC market structure solutions provider, announced the launch of the industry’s first industrial hemp exchange. The new company aims to improve efficiency and pricing transparency for producers, processors and end-users by starting a legitimate online market place for hemp contracts.
“It’s the fastest growing market I’ve ever seen,” said Julie Lerner, the founder of PanXchange, ahead of a CBD and hemp expo in Miami where she moderated a panel of hemp growers.
“Despite the massive market demand for industrial hemp, the ability for producers to transact with processors and end-users in a transparent, efficient manner is woefully inadequate.”
Risky game for farmers?
The profits in hemp are clearly unrivalled, but there is still the ever-looming chance that the FDA could suddenly slap strict regulatory guidelines on CBD, which could destroy millions of dollars worth of potential profits and the livelihoods of farmers.
While the FDA is still in the midst of researching whether the uses and effectiveness of CBD products are as they claim, the circumstances of the unknown has not put off farmers who see the opportunity to farm hemp whilst waiting for a solid answer.
While the new farming bill shows optimism for the future of hemp farming, it is not the final yes confirmation some were hoping for. Although hemp is now officially regarded as an agricultural product, strict regulations still hang over the plant as any crop found with more than 0.3% THC would be considered marijuana which is still federally illegal.
Additionally, the federal government and individual states are required to share regulatory power over all hemp production, with states having to submit their programs for monitoring the hemp production to the USDA for approval. States that decide not to create their own individual plans will have to abide by the federally run program.