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Is hemp the next big legal cash crop in the United States? Experts say hemp industry on track to be worth $22 billion by 2022. How does CBD fit in the equation?
Maybe money doesn’t grow on trees, but it’s springing up from the soil across America in the form of the hemp plant. And why not? Now that the 2018 Farm Bill has been passed and signed, which declassifies hemp as a Schedule 1 Controlled Substance, American farmers and CBD retailers are gearing up for a major boom in the industry. Analysts from the Brightfield Group project the hemp industry could be worth $22 billion in total by 2022.
In Tennessee, farmers are already cashing in on this exploding market. Hemp is on the verge of becoming the state’s next big cash crop, the heir-apparent to Tennessee tobacco.
One of the state’s hemp farmers in particular, Clint Palmer, has no doubts. He believes hemp is the country’s next big cash crop. As he walks through rows of hemp plants – touching, smelling and admiring his work – it’s easy to see why he loves his crop so much. The plant offers huge profits for less, an American farmer’s dream come true.
For example, the typical return for tobacco is about $3,000 to $5,000 per acre. However, the return on hemp crop is much, much higher than this. Palmer can easily grow about 1,000 hemp plants on one acre of land. Each of these 1,000 plants provides about one pound of usable bud, depending on the quality, etc. He then sells his crop for about $50 per pound. Let’s do the math really quick. Yes, that’s right! The return on just one acre of hemp crop comes to about $50,000, ten times the potential return of tobacco.
The number of farmers getting into the hemp industry will grow exponentially in the next few years with returns like that. New legal-to-grow crops don’t just pop up every day, either. This is a huge deal in the farming industry, a much-needed beacon of light. Much of the demand for hemp stems from the growing popularity of cannabidiol (CBD) products, which are currently taking the country by storm.
Cannabidiol, or CBD, is a cannabinoid found in the Cannabis family of plants (hemp is a part of this plant family, but is not the same as marijuana). There exist over 100 known types of phytocannabinoids, which act as “keys” for the human body’s endocannabinoid system. The endocannabinoid system, also known as the endogenous cannabinoid system (ECS), is crucial for regulating various body functions, like hormones and appetite. When taken orally, CBD lights up the cannabinoid receptors in the body. After setting them to work, the ECS balances the body and brings it to a point of homeostasis.
Unlike the cannabinoid THC, CBD does not induce psychoactive effects when taken. All legal, hemp-derived CBD products contain less than a .3% THC content, which is not enough to get you high or register on drug tests. The chemical profile of CBD is differs greatly from THC – do not confuse the two with each other. Hemp is also now legal in the U.S. on a federal level, thanks to the recently passed 2018 Farm Bill. CBD exists in the glandular bulbous trichomes of the hemp plant, also known as its buds. The market for these trichomes is absolutely booming.
According to a report published by New Frontier Data, the hemp CBD industry in the United States grew by nearly 40% in 2017, reaching $367 million in sales across hemp-derived and marijuana-derived markets.
And in 2018, the hemp-derived CBD industry was on track to hit $591 million, thanks to a number of factors, such as more public interest in CBD and the 2018 Farm Bill passing. In the next four years, these factors could increase up to 40 times that amount. The Hemp Business Journal estimated that the CBD market will grow to a $2.1 billion market in consumer sales by 2020. The U.S. CBD market is primed for huge growth across its primary sectors: hemp-derived CBD, marijuana-derived CBD and pharmaceutical CBD.
And the market is wide open to anyone and everyone right now. The top five CBD retailers in the United States only own 12% of the CBD market currently. This means 76% of the market is available for small CBD retailers.
“Twenty businesses now host two-thirds of hemp-derived CBD sales,” states the Brightfield report, “as the evolution of the market has allowed these companies to develop reputations, spread the word about their brands and products through grassroots-level word-of-mouth marketing, and grow their consumer bases tremendously despite the barriers presented by the current regulatory system.” When it comes to hemp-derived CBD, it’s anyone’s game now folks.
Hemp-derived CBD can be found in a variety of products these days, from oils to gummies to healing balms.
“This plant is special because it has a very high level of CBD. Very special terpene profile as well. If you get a smell…it’s like a, like a fruity, citrus delicious aroma,” exudes Palmer as he talks about his hemp plants. There are over 500 compounds in the hemp plant, such as cannabinoids, terpenes and fatty acids. In certain types of CBD oils, these compounds work together offering maximized potential health benefits.
More research into CBD and cannabinoids should be done to determine the extent of potential health benefits. The prohibition on hemp and marijuana-related products prevented research into this arena previously. However, as CBD and THC become more popular, more research will come to light on cannabinoids’ effects on the human body.
Medical Marijuana’s Dr. Titus says, “The cannabinoids [in hemp] provide essential and vital nutrients that support the human body’s highest levels of health and wellness. Cannabinoid deficiency is rampant in our society and a contributing cause of numerous medical conditions. Mother’s breast milk is cannabinoid-rich and the ‘runner’s high’ is a release of the endogenous cannabinoid, Anandamide. Thirty U.S. states now approve medical marijuana – certainly, in the industry, we believe that ‘the trend is our friend’ and the end of cannabis prohibition is at hand.”
The end of cannabis prohibition may be great for those in the recreational marijuana industry. However, it could mean bad news for hemp-derived CBD retailers. Once recreational marijuana becomes legalized around the U.S., people will ditch hemp CBD for marijuana CBD instead, a trend witnessed in other areas. Hemp CBD retailers will need to focus on maintaining market share to fend off those future competitors. But for right now, retailers and farmers alike can rejoice in this newfound hemp industry. Time to make the most of it while hemp-derived CBD is on the up and up!
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