CBD Is Just the First Huge Benefit From Legal Hemp
Hemp has vast potential as an environmentally benign source of many fundamentals of modern life.
With the passage of the 2018 Farm Bill, the U.S. is on the brink of a hemp revolution that could affect industries ranging from construction to healthcare. By legalizing hemp the Farm Bill removes obstacles that have kept a versatile and economical crop down for decades.
Here’s how the Farm Bill will create a multi-billion dollar industry, play a crucial role in the U.S. trade war with China, and help struggling farmers across the country.
The Farm Bill removes hemp from the Controlled Substances Act.
First and foremost, the 2018 Farm Bill nationally legalized hemp. Before, hemp with more than 0.1 percent THC was classified as a Schedule 1 Controlled Substance, on par with heroin and ecstasy. This legislation dates back to the 1970s, but cannabis prohibition has deep roots going back to the Marihuana Tax Act of 1937.
Before this legislation, there was no legal distinction between hemp and marijuana. Though both are varieties of the cannabis plant, hemp contains only traces of the psychoactive cannabinoid THC, meaning that it cannot get you high. As stated by the Drug Enforcement Administration (DEA), “Cannabinoids, such as tetrahydrocannabinols (THC), and cannabinols (CBN) and cannabidiols (CBD) are found in the parts of the cannabis plant that fall within the CSA definition of marijuana, such as the flowering tops, resin, and leaves.”
By signing the Farm Bill, Trump removed hemp from the Controlled Substance Act (CSA). Specifically, hemp that contains less than 0.3 percent THC now has legal standing distinct from psychoactive cannabis, or weed. This means that the DEA and U.S. Department of Agriculture can no longer curb, or prosecute, hemp farmers.
Major hemp farming and sale restrictions have disappeared.
Even when hemp was a Controlled Substance, hemp farming across the country did exist. This is thanks to industrial hemp pilot programs legalized by the 2014 Farm Bill. For example, New York’s Industrial Hemp Agricultural and Research Pilot Program allows universities to apply for licenses to research hemp cultivation. Businesses can also farm industrial hemp, with the proper licensing, per this new program.
But hemp farming is in its infancy. In 2017, 19 states were farming hemp under pilot programs. Thanks to hemp’s shaky legal status, cross-state hemp trade is difficult and hemp farmers do not have access to government subsidies or traditional methods of financing. Hemp farmers had to approach normal business considerations just like anyone in the cannabis industry -- until Trump signed the 2018 Farm Bill.
The Farm Bill replaces DEA restrictions with USDA regulations. This would mean that farmers can certify their hemp crops as organic or American grown and trade nationally and internationally. In broad terms, hemp can become like wheat, corn, and cotton in the eyes of the government, banks, researchers, and farmers.
The U.S. hemp market could be worth over $10 billion by 2025, by conservative estimates.
Hemp product sales reached $820 million in 2017, up 16 percent from $688 million in 2016. This is only the beginning of the hemp boom: The entire hemp market will be worth $10.6 billion in 2025, according to Grand View Research. However, other estimates show the CBD market growing to twice that size in less time. By contrast, $10.6 billion appears conservative.
CBD sales could reach $22 billion annually by 2022.
CBD, the non-psychoactive cannabinoid otherwise known as cannabidiol that is found in hemp and marijuana, is one of the biggest contributors to hemp market growth. Today, CBD sales account for 23 percent of hemp product sales by market share.
Though cannabis research is still nascent, studies and personal accounts have already shown that CBD can dramatically reduce seizures, chronic pain, acne, anxiety, depression, nausea, addition, sleep disorder, and more. For all these reasons, medicinal and medical CBD oil and hemp oil use is growing.
And the fact that CBD cannot get you high makes it an incredibly versatile form of cannabis. In other words, a growing number of adults and children use CBD day-to-day.
CBD is only one of many types of hemp-derived products.
The Farm Bill could transform the way we make fuel, paper, textiles, building materials, plastics and much more.
Hemp is the strongest natural fiber in the world. Virtually anything can be made using hemp, including fuel, clothing, packaging, concrete, cosmetics, fiberglass, and other essential products. Hemp also contains nourishing omega-3 fatty acids, making it an increasingly popular dietary supplement.
Not only is hemp a stronger material than many of those it could replace, but it’s also more environmentally friendly and economical to farm. Cultivating hemp does not require pesticides or herbicides. Cotton farming takes 50 percent more water to farm and 400 percent more water to process than hemp. One acre of hemp yields as much dry materials as four acres of forest. For all these reasons, hemp is one of the oldest and most-versatile crops in existence. Hemp prohibition is a modern invention.
Hemp’s various applications are nothing short of revolutionary. Today, industrial hemp only accounts for 18 percent of the market. Textiles and food derived from hemp account for 13 and 17 percent, respectively. Though a CBD market explosion may be the most immediate consequence of the Farm Bill, it’s only a fraction of what the hemp market could become. Cars, fuel, buildings, and other necessities of modern life can all be made more cheaply and sustainably with hemp.
Growing hemp could lift some of the burden placed on farmers by Chinese tariffs.
U.S. farmers, now more than ever, are in desperate need of an economical crop like hemp. Trump’s tariffs have caused major disruptions in U.S. trade with China. Specifically, China has levied a 25 percent tax on American soybeans, wheat, corn and sorghum in response to Trump’s $50 billion worth of tariffs imposed on Chinese goods in early 2018.
As a result, American farmers have taken a major hit. China bought $14 billion in U.S. soybeans in 2017. In July 2018 alone, the price of soybeans fell 14 percent as farmers struggled to sell off their crops. Though Trump and Chinese President Xi Jinping have agreed to postpone the $267 billion worth of tariffs to be levied against China on January 1, the still-existent 25 percent tax on American goods is still hurting U.S. farmers.
The Farm Bill gives farmers a viable alternative to soybean, wheat, corn and other commonly exported crops. And from the White House’s perspective, American-grown hemp puts a dent in Chinese hemp production. Since the U.S. has been unable to meet its hemp demands yet, we import around $60 million of hemp per year. Much of it comes from China, the world’s leading cannabis producer and researcher.
The Farm Bill benefits consumers, farmers -- and Trump.
We’ve only scratched the surface of hemp’s many uses, not to mention its ability to curb some of America’s most pressing health and political problems. To name a few:
- Research has shown that CBD can help patients struggling with addiction, or serve as an alternative pain medication.
- Hemp fuel could be a viable alternative to fossil fuel.
- Hemp farming is more sustainable, versatile,and economical than any other large-scale crop farming.
The only thing that stands between the U.S. and a booming hemp market is outdated perception. Now that Trump has signed the Farm Bill, the hemp market is poised to change.