The “Green Rush:” Hemp and the U.S. Economy

In the last few years, there’s been a growing sector of the market that’s capturing more interest every day. Legal cannabis, and in particular, the hemp plant, is experiencing something of a renaissance here in the United States. As increasing numbers of states legalize the use of medical and recreational marijuana, the Federal Government is also changing its relationship with cannabis. The 2014 and 2018 Farm Bills made it legal for farmers to cultivate, refine, and sell hemp and hemp-based products.

These changes in legislation, partnered with changes in market interest has created what many are referring to as the “green rush.” Hemp has become a cash crop in its own right and the huge number of products that can be created from it is having a noticeable impact on the economy. As an innovator in the hemp industry and a leading producer of CBD isolate products, Medimorphic has watched the green rush with interest.

What Did the Farm Bills Accomplish?

When hemp is discussed, the dialogue often begins with the 2014 and 2018 Farm Bills. But why is that the case? It’s because these bills dramatically reshaped the federal relationship with hemp. For more than 80 years, the government viewed hemp through the same lense as it viewed marijuana. The 1937 Marijuana Act criminalized the plant, victimizing hemp in the process. But as more states began legalizing medical cannabis, it generated more support for a reevaluation of the role and uses for hemp.

In 2014, the Obama Administration passed a Farm Bill. One of the elements of this bill was to allow for state and university-run research labs to grow and experiment with hemp. The bill was an overnight success and by 2016, 30 different research groups in 15 states had planted nearly 10,000 acres of the cannabis plant. This in many ways opened the door for the explosion of hemp and hemp-based products we are seeing today.

The 2018 Farm Bill essentially expanded the efforts of the 2014 act. Section 7605 of the bill extends the protections for hemp research. Section 7501 improved research allowances into hemp. But most importantly, the 2018 bill treated hemp like any other agricultural crop. This made hemp legal to plant, grow, and sell in all 50 states of the union, provided there are no local laws preventing this. Reflecting this change was section 11101, which placed hemp under the protection of the Federal Crop Insurance Act. This means that farmers who face crop loss can make an insurance claim on their hemp.

Another important part of the 2018 bill was the clarification it offered on cannabis compounds, including cannabidiol or CBD. This compound was legalized, and under section 12619, all hemp-derived products were removed from Schedule 1 drug status. That said, only hemp-derived CBD is legal, as marijuana-derived CBD is still illegal, even under the 2018 Farm Bill.

Market Factors that Have Helped the Green Rush

The recent success of hemp can be traced back to a number of factors. While its often misunderstood connection to marijuana is obvious, hemp has actually benefited from the increased discussion around marijuana legalization. As distinctions between the two plants are being drawn, consumers are starting to recognize the value in hemp.

The most obvious is that hemp cannot get you “high” the same way that the psychoactive compound THC in marijuana can. This means that for individuals looking to use a cannabis product to address aches and pains, help manage stress and anxiety, or even care for their skin can do so without fear of becoming inebriated in any way.

This characteristic of hemp has made it particularly fascinating to those who have had to rely on prescription and over-the-counter medications to manage these health concerns. With reports of the opioid crisis getting more air time every day, and as we understand more about the side-effects of medications, it’s no surprise that many have embraced hemp-based products like CBD as a natural alternative.

But the benefits of hemp aren’t limited simply to the CBD products it can create. It’s a great crop to grow for its environmental benefits, as it doesn’t require much room or water to grow. It thrives in harsh conditions and can even help improve the soil it’s growing in. The products that can be made from hemp fibers, like paper and fabric, are more durable and can be recycled more easily. This makes hemp a profitable and eco-friendly product.

How the Hemp Market is Growing

Perhaps an obvious indicator of the expansion of the hemp market is the expansion of the agricultural space being used to grow it. While there were less than 10,000 acres of hemp in the U.S. in 2016, that number ballooned to nearly 24,000 by 2017. In 2018, that number expanded again to 77,000 acres. Farmers are growing more of the cannabis plant in order to meet the huge demand for these products.

The North American Industrial Hemp Council estimates that more than 25,000 products can be made from the hemp plant. From soap to CBD to t-shirts to rope and so much more, hemp has the potential to play a huge role in many of the goods and products we use every single day.

Perhaps the most obvious driver of hemp sales right now is CBD and CBD-infused products. In 2018, it’s estimated that CBD sales ranged between $600 million and $2 billion. The market research firm, Cowen believes these sales could soar to nearly $16 billion by 2025 as more health and wellness products and food and beverage companies begin embracing the use of CBD.

Can the Supply Meet Demand?

But as the market presence of CBD and hemp continues to grow, some question whether current growing practices and prices will be able to keep up with the demand. This is because some CBD and hemp companies face supply chain challenges. As more and more players get into the industry, they begin competing for the same resources and materials.

The challenges start at the farm level. Humans have been growing hemp for literally thousands of years, but because of the 1937 ban on the plant, hemp farming in the U.S. has been something of a lost art for more than 80 years. This means that farmers have to reinvent effective hemp growing practices and strategies. Many hemp specialists and agronomists have noted that most hemp farmers are growing the plant the same way they would tomatoes. While this makes for attractive and nice smelling hemp plants, it’s a resource and time-intensive process to raise a crop that will be broken down into CBD isolates or turned into fibers.

There’s also the risk of growing industrial hemp that doesn’t meet federal guidelines. To be made into CBD, the hemp has to contain less than 0.3 THC. Farmers won’t know if their current crop falls below this threshold until after it’s been cut down, harvested, and dried.

The Future of Hemp and CBD

Despite the challenges, many in the hemp and CBD industries have a bright outlook. As the industry grows, the U.S. Food & Drug Administration has started to take notice, and there is some discussion that the federal institution will soon start a dialogue to ensure quality growing, processing, and distribution practices. This will only help the market, as it will eliminate inferior products or products that make false claims. This means that companies who have been following stringent practices since the beginning will flourish.

Additionally, FDA rulings will also mean an increase in research funding into hemp and CBD. With expanded research opportunities, innovators in the CBD field can find new and even more useful for the cannabis compound. This translates to an increase in the number of helpful products on the market for consumers to enjoy.

Be a Part of the Green Rush and Order your CBD and Hemp Products Today

You can easily incorporate hemp and CBD products into your life when you shop within the Medimorphic family of products. We offer luxury CBD brands like nuhumun, which make use of some of the purest and most potent CBD isolates available. From micro-mists to softgels to salves, we have the CBD products you need to enhance your health and lead the lifestyle you want. Explore our product lines today and order now.

6 views0 comments

Recent Posts

See All