The United States House of Representatives approved a massive $867 billion farm bill in a 369-47 landslide after the Senate approved it decisively the day before.
Now awaiting a signature from President Trump, the new farm bill covers many areas of note, but most notably reclassifies hemp as an agricultural crop. With it being entirely legal now to grow hemp, many analysts see this as a massive step forward for the cannabis industry in America and expect massive growth in the sector’s future.
The hemp legislation introduced earlier this year by Senate Majority Leader Mitch McConnell from Kentucky would allow states to regulate hemp cultivation as well as make it eligible for crop insurance. According to CNBC, analysts expect that the total U.S. cannabis market could grow well over $20 billion by 2022 as opposed to its current size of $800 million.
“At a time when farm income is down and growers are struggling, industrial hemp is a bright spot of agriculture’s future,” said McConnell. “My provision is the farm bill will not only legalize domestic hemp, but it will also allow state departments of agriculture to be responsible for its oversight.”
Hemp production has historically been limited to mainly research programs, with imports from Canada and Europe filling some of the domestic demand for non-CBD related products. As a cousin of marijuana, hemp contains some – albeit lower – levels of THC, a chemical that produces a “high” for consumers.
“This opens the floodgates for this industry to grow very rapidly and scale on a national level,” said Bethany Gomez, Research Director for cannabis market researcher Brightfield Group. “The vastly majority of the market right now is going for CBD products. You can find some hemp seed-based beauty products or hemp in some cereals and things like that, and there’s such usage on the fibers for like clothes and other industrial purposes, but that’s really minimal right now.”
Historically, cannabis cultivation grows well in regions where tobacco production used to exist, such as North Carolina and Kentucky. In the later states case, Kentucky received over $2 billion in Tobacco Master Settlement Agreement funds and is allocating some of that money into the hemp industry to diversify.
“For too long, the outrageous and outdated ban on growing hemp was hamstrung farmers in Oregon and across the country,” added Sen. Ron Wyden, top Democrat supporter of hemp legalization. “Hemp products are made in America, sold in America, and consumed in America. Now, hemp will be able to be legally grown in America, to the economic benefit of consumers and farmers in Oregon and nationwide.”
While this bill will be a boon to farmers, the CBD industry is well poised to take advantage of the upcoming hemp revolution coming soon. Currently selling around $350 million worth of products in 2017, many analysts expect that figure to balloon into $1 billion by 2020. At the same time however, there is only a limited amount of research done into CBD products, and since hemp won’t be policed in the same way cannabis is, researchers will have better access to CBD for future studies.
While perhaps not as significant of a milestone for the cannabis market as Canada’s countrywide legalization, the fact that hemp can now be grown freely by farmers is a massive step forward for the industry.