The fact that investment gurus and market researchers alike are estimating the hemp business will bring in more than $20 billion over the next three years makes it extremely likely.
Up until now, industrial hemp production in the United States has been heavily restricted. Only research and pilot programs have been given the legal clearance to grow the crop.
Interestingly enough, it was Senate Majority Leader Mitch McConnell, a Republican from Kentucky, who introduced this legislation earlier this year. The bill effectively deems hemp a lawful agricultural commodity and allows individual states to be the primary regulators of cultivation processes.
This bill also allows for researchers to apply for federal grants to grow hemp as well as puts it on the list of insurable crops, thereby protecting any investments.
Benny Gomez, Brightfield Group’s director of research says, “This opens the floodgates for this industry to grow very rapidly and scale on a national level.” Brightfield Group is a cannabis market researcher based out of Chicago.
As for the timetable on this vote, the House Agriculture Committee is cautiously realistic. "With any luck, it'll be passed by the end of next week, but knowing how things go around here it may drag into the week after,” surmises ranking committee member Collin Peterson, a Democrat who represents Minnesota’s 7th congressional district.
As we know, cannabidiol, more commonly known as CBD, dominates the $800 million U.S. hemp market. CBD infused products are cultivated for a plethora of health issues, including chronic pain, arthritis, epilepsy, and multiple sclerosis.
Brightfield group analyzed sales of CBD from 2017 and 2018 and issued the following statement in September:
"Between 2017 and 2018, the U.S. hemp-derived CBD market has nearly doubled in size, but the five-year growth projections for this market are now dramatically higher than they were a year ago. This is because the full legalization of hemp-derived CBD is now a real and likely prospect following Republican Mitch McConnell’s recent proposal of the Hemp Farming Act of 2018 (Farm Bill). This legislation – likely to pass later this year – would clearly and unambiguously legalize hemp as well as its derivatives, extracts, and cannabinoids, including hemp CBD."
The CBD market is slated to reach between $2.5 billion and $3.1 billion by the year 2022, projects Hemp Industry Daily.
Though CBD takes the cake in hemp profitability, a vast array of other products can be produced from the versatile plant. Industrial hemp stands to replace traditional methods for making apparel, foods, personal care products, plastic alternatives, and building materials.
There’s really not much this plant cannot do.
Until now, the U.S. has relied on imports from China, Europe, and Canada to meet our demand for hemp seeds and fibers. Allowing farmers across the country to cultivate this profitable crop is sure to boost investor interest.
CEO of Farmtiva Chris Boucher says hemp will ”... Become an agricultural commodity, which in turn will allow crop insurance and Wall Street will be able to invest institutional funds into the hemp industry."
Many members of Congress themselves are considering not only investing in hemp but even producing it themselves. "I may grow some hemp on my farm," admits Agriculture committee member Peterson. "I'm looking at it. There's a big market for this stuff that we've been ceding to Canada and other places."
The legality of CBD, like that of its THC-ridden relative, is a decision left up to the states thus far. This protocol of making every cannabis-related decision a state issue is to continue on with the farm bill. While the U.S. Department of Agriculture will manage and control hemp the way they do other crops, individual states will be able to impose any additional taxes and regulations.
Boucher says, "In the long run, it's all going to be managed and controlled by the U.S. Department of Agriculture, just like corn, soybeans and everything else.”
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