The One Cannabis Investment You Can't Afford to Miss
It’s time for hemp’s breakaway moment.
For almost five decades, hemp in America has been tied to its controversial cousin marijuana. Despite being defined by the federal government as being low in psychoactive tetrahydrocannabinol (THC) -- less than 0.3 percent -- industrial hemp is lumped in with all other forms of Cannabis sativa L., which have been classified since 1970 as a Schedule I controlled substance, along with heroin, LSD, and ecstasy.
Legislative attempts to remove hemp -- or “deschedule” it -- from the Controlled Substances Act have picked up steam in the last five years, but they still haven't made it out of committee status. As a result, the U.S. hemp market, worth hundreds of millions of dollars, consists of thousands of products mainly made with imported hemp.
But in 2018, political, market and environmental forces are uniting in a perfect storm to change hemp’s domestic destiny, and we believe that now is the perfect time to go “all-in” with hemp investments. We are pressing the issue at my cannabis lifestyle company, Chiefton Supply Co., making our hemp apparel available nationally, and preparing to bring our production stateside as soon as possible -- which we see as much closer of a possibility than ever before. Here are three reasons why.
1. Rising Political Tide
The political will to change hemp's current legal status crosses party lines.
Since 2015, Senate Majority Leader Mitch McConnell (R-KY) has introduced bills to exclude hemp from the CSA. In April of this year, he once again took up the charge, with the Hemp Farming Act of 2018, which has picked up nearly 30 co-sponsors as of early August. The bill would help farmers in other ways, too, such as making USDA funding and water rights available to them and allowing them to insure their crops.
On the other side of the aisle, Oregon Senator Jeff Merkley (D-OR) has said: "It’s past time that we move beyond these outdated and frustrating restrictions on hemp farming in the United States. If we’re selling hemp products in the United States, we should be growing hemp in the United States—it’s good for jobs, good for our communities, and it’s just common sense."
While hemp awaits legalization on a federal level, there is a patchwork of state-by-state regulations around growing and researching. Currently, it is illegal to grow hemp in the United States without being issued a special permit from your state or from the DEA.
This is a far cry from hemp’s heyday during World War II when the American government promoted a Hemp for Victory program, and farmers grew about 150,000 acres of hemp. As far back as the 18th century, hemp was an important crop, used to produce rope and textiles.
But progress is being made. The 2014 Farm Bill began to turn things around for hemp farmers, legalizing the cultivation of industrial hemp for research purposes in states “where such growth and cultivation is legal under State law, notwithstanding existing Federal statutes that would otherwise criminalize such conduct.” To date at least 35 states have taken advantage of this legislation, according to the National Conference of State Legislatures. In 2017, nearly 25,000 acres of industrial hemp were cultivated in 19 states, reports the advocacy group Vote Hemp.
Chiefton’s home state of Colorado leads the nation in hemp production and was the first in the nation to certify domestic hemp seeds.
2. Massive Market
The numbers prove that the market is hungry for hemp. Despite its legal challenges, American consumers purchased more hemp than any other nation -- an estimated $688 million worth of products -- in 2016.
Personal care products made up almost a quarter of those sales (about $163 million), while food and CBD products each were 19 percent and other industrial applications were 18 percent. Textiles were 14 percent of the market, close to $100 million.
Sales have been increasing for the past several years, tripling from 2012 to 2016, and are projected to hit $1.8 billion by 2020.
Hemp has a seemingly infinite set of uses, stretching far beyond food and health. Car manufacturers like BMW are including it in their panels, the construction industry is using it for insulation, and researchers are looking at hemp biofuel for vehicles. At Chiefton Supply Co., we’ve consciously moved over to using hemp in our apparel.
I can say from firsthand experience that consumer response has been overwhelmingly positive. A common question asked at our booth during cannabis festivals is: “Are your cannabis leaf-print shirts and shorts made of hemp?” After more than a year of sourcing and innovating, I'm glad I can finally answer, “Yes!”
3. It's Sustainable
The last reason hemp is a great investment right now? It's an environmentally-friendly crop.
Hemp requires 50 percent less water and land than cotton to grow. It’s a drought-resistant, resilient crop that can grow well in poor soil, yet causes less soil nutrient depletion than many other major crops.
Hemp is considered the world’s most durable textile. Since it’s four times more durable than cotton, hemp helps fulfill the “reduce / reuse” aspect of environmental sustainability.
One of the other advantages of a friendlier political climate is that it makes it easier for agronomists and other scientists to do more research on making hemp crops even more sustainable and profitable in the United States.
Right now, given the limited number of acres on which to grow in any given state, producing domestic hemp costs more than cotton for example. But consumers have shown they are willing to pay more for a higher-quality product that is more responsible when it comes to environmental impact.
On a common-sense level, using the most sustainable textile is simply the right thing to do. States like Colorado are positioned well to lead in domestic hemp production, creating good jobs in a supportive market. What comes next is reviving and rebuilding processing infrastructure for hemp, which will be a prime opportunity for investment.
We’re looking forward to the day hemp returns to its rightful place as a central crop in America’s economy. And we eagerly encourage federal lawmakers to keep propelling this important issue to the top of their priorities list.