THE SHORT ANSWER
On November 17, 2022, OSU's Global Hemp Innovation Center (GHIC)’s Hemp Industry Research Needs Workshop provided expert presentations and industry input via Zoom for some 500 participants worldwide. Findings concluded that regulation and education are the top issues affecting the advancement of the US hemp market.
LACK OF CLEAR FEDERAL AND STATE REGULATIONS
US Workshop participants agreed that regulatory uncertainty is the most significant risk to domestic hemp industries in general. Several EU countries, Canada, and China are among the top hemp producers, with Switzerland ranked #1 in exports of raw or retted hemp and the US ranked #5 in 2021. https://www.statista.com/statistics/1031754/global-leading-exporters-of-raw-hemp/ These are hemp statistics that do not indicate CBD/hemp numbers but are representative of the global hemp market.
Hemp’s general legal status in the US is increasingly up in the air. The 2018 Farm Bill resulted in an enor
mous spike in hemp production, mainly contributed to the biomass/flower market. Seemingly overnight, the US saw hemp products become widely available after nearly a century. This “open market” had allowed for both online and brick-and-mortar commerce as well as use of the US Postal Service for shipping. Markets are strong, but perceived oversupply, lack of regulatory clarity, and an historic drought in the western US have created a rapid decline in production in the past two years.
Beau Whitney of Whitney Economics stated that “federal murkiness” and the “patchwork of [state] laws” must be addressed quickly to give US farmers the opportunity for global hemp market access. Multiple federal agencies tasked with assorted pieces of the regulatory puzzle are often out of touch with each other on policy and enforcement. Added to the dilemma of consistency, individual states are faced with cobbling together a confusing assortment of rules of their own. Workshop participants voiced frustration over the lack of a single, clear source of information for producers at every level. Inconsistencies are leading to compliance problems ranging from licensing to testing to distribution to sales. Good-faith efforts to stay in compliance mean that every business runs a frustrating gauntlet of bureaucracies and regulations that, very often, are not entirely understood by the various governing bodies due to a lack of communication among them.
FUTURE OF CBD/HEMP
Eric Steenstra, Executive Director of Vote Hemp, stated that the CBD/hemp market is not predicted to comprise the hundreds of thousands of acres of fiber and grain that will be farmed. Whitney agrees with expectations that hemp cultivation for fiber and grain will surpass those for CBD/hemp by 2023/2024. This is not to say that CBD/hemp is destined to become an undesirable commodity, but in terms of the economics of global scale and market demand, hemp as “green material” for replacing traditional manufacturing processes for plastics, synthetics, and other less carbon-neutral materials far outpaces the farming hemp for CBD/hemp. Hemp as food and fiber also has significant importance for sustainability along all parts of the value chain. Other countries’ early or enduring hemp markets con
tinue to dominate worldwide market share while the US remains stalled in its self-created regulatory quagmire.
A 2021 University of Kentucky poll found that 52% of the respondents indicated that they had used CBD/hemp personal care products, 41% had consumed CBD/hemp in food, and 33% used products for their pets. Asked about intent to use those CBD/hemp products in the future, 51% said yes to personal care, 42% yes to food, and 41% replied yes to pet supplies. (Source: GHIC) The largest gainer in the intent to use hemp category was plastics, which jumped from 33% used to a whopping 68% intending to use. The sheer number and variety of products that can be derived from hemp stand it on solid ground for expansion. CBD/hemp may not be the most significant player, but there is evidence for continued market viability.
NEED FOR SECTOR, LEGISLATIVE, AND PUBLIC EDUCATION
Tyler Mark, an assistant professor of production economics in the University of Kentucky’s Department of Agricultural Economics, stated that after a “bumpy start,” the US hemp industry can now begin thinking about “adjustments and resets” that are the natural result of the rebirth of an industry that has been dormant for almost 100 years. This will be a lengthy and comp
licated process at multiple levels: scientific, agricultural, mechanical, legislative, etc.
There is also the question of whether hemp falls into the category of drug, food, and/or industrial commodity applications. Much of the market confusion on these points centers around terminology. Consumers see “hemp” and think “weed,” “marijuana,” “high,” “illegal” — all connotations connected with adult-use cannabis that do not apply to hemp as a food, fiber, and green material commodity. Consensus at the workshop was overwhelmingly in support of educational efforts to clarify those differences and increase the public’s awareness of CBD/hemp’s current and potential benefits. Standardizing and destigmatizing industry terms through education are vital to the regulatory future of the hemp industry as it pertains to legislation, law enforcement, and farming.
WHAT NEEDS TO HAPPEN . . . SOON
The movement to raise compliant THC content of CBD/hemp products to 1% rather than .03% by dry weight would significantly reduce the current testing failure rate of 78% (Whitney). Whitney states that 44% of growers found their harvests unprofitable in 2021. He claims th
at just over 50% of growers doubt they will be in business in two years. This is a startling change from the auspicious beginnings of US CBD/hemp, one which Whitney suggests is partially fueled by his assertion that “big cannabis” lobbying efforts have “stolen the narrative about hemp” and are attempting to block competition.
A 2022 Gallup poll reported that cannabis use has outpaced tobacco use in the US. “According to the results published last Friday [August 26, 2022], 16% of Americans say they currently smoke marijuana, while only 11% reported being cigarette smokers.” (https://nypost.com/2022/08/31/marijuana-outpaces-cigarette-use-for-the-first-time-on-record/)
US support for full cannabis federal legalization has reached 68%. (NY Post) The Cannabis Administration and Opportunity Act (CAOA) is currently on the President’s desk after approval from both houses. The 2023 Farm Bill is due in a few months. These factors combine to create a crucial turning point for the future of hemp as a commodity and CBD/hemp production and consumption.
UNLOCKING US HEMP’S POTENTIAL
The reintroduction of hemp as a new part of the US economy is not only a historical shift in agriculture in particular but a societal shift in general. There has not been a crop in the US that has required substantial research on multiple levels and by multiple agencies in nearly a century. Hemp farming has opened the floodgates to entirely new industries and business opportunities. With quick and precise attention to regulation and education, hemp has the potential to become a valuable, multi-use crop that will benefit the US economy, employment, global trade, and environmental objectives.
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