In 2018 the Farm Bill was proposed to differentiate between hemp and marijuana. This bill made hemp a standard agriculture commodity and removed all major restrictions.
How did the 2018 Farm Bill come about?
Senate Majority Leader Mitch McConnell initially introduced the bill in March of 2018. This is where he announced legislation legalizing hemp production in the United States. The bill was co-sponsored by Oregon Senators Ron Wyden and Jeff Merkley. Kentucky Representative James Comer and Colorado Representative Jared Polis introduced the companion bill in Congress.
The Act also removed low-THC cannabis, also known as hemp, from regulation under the Controlled Substances Act. It allowed hemp farmers to benefit from water rights and federal agricultural grants. It made the national banking system available to them as well. The banking system was previously in a grey area supporting the cannabis industry. The bill also allowed for other benefits of producing a recognized crop, such as marketing, agronomy (the science of soil management and crop production), research, and crop insurance.
What is Hemp?
For many centuries, hemp has produced fiber and oil worldwide to create various industrial and consumer products.
Both marijuana and hemp come from the species Cannabis sativa L. Different varieties of hemp containing low THC levels are legal in the United States, many European countries, Canada, and Australia. THC is one part of the marijuana plant that gives it psychoactive properties.
Industrial hemp grows as a fiber, a seed, or a dual-purpose crop. When developing hemp as a fiber, farmers plant it in high density to maximize their stalk production. The plant produces an outer ring of more valuable fibers and an inner circle of less valuable threads. When farmers grow hemp for seed, they tend to space out further apart to increase seed production.
History of Hemp in the United States
In the 1950s, hemp production in the United States stopped due to market conditions and federal regulations. There has been an enormous increase in the interest in producing industrial hemp since then. By Executive Order of President Clinton in 1994, hemp was deemed strategic national product that should be grown. The Agricultural Act of 2014 initially failed industrial hemp farming and attempts to amend the Controlled Substances Act. The Agricultural Act of 2014 created a regulated, national agricultural hemp pilot program in which states could create their own regulations.
Unfortunately, federal and state authorities’ ongoing tension over state hemp policies slowed the industry’s rebirth. This left many potential hemp farmers uncertain about how federal authorities would respond to production. Finally, in 2018, groups such as the American Farm Bureau Federation, the National Association of State Departments of Agriculture, the National Farmers Union, and the National Conference of State Legislatures called for the differentiation of hemp from marijuana. This lead to the 2018 Farm Bill.
Hemp Production, Imports, and Markets
With the 2014 Agricultural Act allowing hemp production under specific conditions, hemp production in the U.S. rose quickly. Vote Hemp is an organization that promotes hemp in the marketplace. They estimated from 2015-2018, hemp acreage has increased from 9,800 to 78,000 acres.
Over the last few decades, hemp imports have been sky rocketing. They reached a ceiling of $80 million in 2015 and have continued to climb exponentially since then. In 2018, almost 66% of hemp imports comes from seeds. Canada was the largest supplier of hemp to the U.S., accounting for as much as 90%.
Some farm bureaus claim there could be as many as 50,000 various uses for hemp products. Despite this, there may be only a few products with the potential to generate a significant market share. The critical categories are fiber, oilseed, and pharmaceuticals. The Hemp Business Journal estimated in 2017 that U.S. hemp sales reached $820 million. This is a considerable increase of 19% over 2016’s estimated $688 million in sales.
How the 2018 Hemp Farming Act can help
The markets for fibers, such as industrial hemp, include specialty textiles, paper, and composites. These fibers make up fabrics, yarns, carpeting, insulation, construction materials, and even auto parts. Hemp seed and oil are in various foods and beverages, including cooking oil. Farmers crush seeds hemp seed oil used in soap, shampoo, and cosmetics. Another use of industrial hemp includes a hemp-based concrete, hempcrete. Other various uses include building material and composites for a fiberglass alternative in the auto and aviation industry.
One of the biggest potential markets for hemp products is cannabidiol or CBD. CBD is a non-psychoactive compound in cannabis that is low in THC. CBD serves as a relief for various illnesses such as epilepsy, PTSD, nausea, and other disorders.
There is a concern about how the industry markets some products derived from industrial hemp, such as hemp oil. Consumers boast that hemp oil has comparable therapeutic uses to CBD extracts. Originally there was much speculation as to how the Farm Bill would actually assist the hemp industry. Based on the current sky-high demand for hemp products, it appears to be working.