What Is Industrial Hemp? And Is It Good For The Economy?

When people think about the legal cannabis market, most of the discussion centers around distribution for and consumption of medicinal marijuana, and the impact of recreational marijuana laws in states like Colorado.

Though made from similar plants, hemp is different from the marijuana people use to alter their mood or help them cope with physical and mental illnesses. What’s more, there is a growing U.S. market for hemp agricultural and hemp made products that is being tightly regulated, because of hemp’s long-standing illicit status.

Nevertheless, over a dozen states in the last three to five years have been experimenting with allowing various levels of hemp growth and cultivation, as well as product development. Both the U.S. Congress and state legislatures have been considering laws that would change hemp’s status and make it a legal crop.

But what is hemp or industrial hemp? And does it have potential to be good for the U.S. economy?

What is “hemp” or “industrial hemp”?

Hemp or industrial hemp is a variety of the Cannabis sativa plant. Though classified with marijuana and deemed illegal by the federal government (without special exemption), hemp typically has very low amounts of THC (tetrahydrocannabinol), which is the psychoactive element that provides potency. THC levels are how medicinal and recreational marijuana strains are measured, with higher percentages yielding higher potency. The hemp that is approved by the U.S. and most international governments normally contains .2% THC or less, which means there would be no psychoactive effect from consuming hemp.

The hemp plant is grown mostly in the northern hemisphere. Hemp has long been used by humans for a wide range of products. For example, it was first spun into fiber for clothing over 10,000 years ago. It also is high in fiber, and has been used to provide nutritional benefits to humans and animals.

At 70% of the global market, France is the world’s largest hemp producer. The French use hemp mostly for manufacturing cigarette paper as well as in automobile manufacturing (mainly fibers used in cars). Prior to France becoming a global leader in the 1980s, the Soviet Union (prior to its dissolution) was the world’s largest producer. Today, Ukraine (once part of the Soviet Union) is still one of the leading nations in the world on experimenting with hemp to improve its use as a fiber in textiles.

In the United States, hemp has long been a part of many state economies, and at times has been a critical resource. Hemp has been grown in states such as Kentucky and Virginia since colonial days. During World War II, 150 million pounds of hemp were produced in 1943 for a variety of uses.

However, hemp has had a difficult history in the U.S.

After World War II ended, hemp cultivation and processing plants were shut down. Despite this, hemp and marijuana were still treated as distinct and separate until the U.S. enacted the Controlled Substances Act (CSA) of 1970. Hemp-based products are legal provided there is almost no trace amounts of THC. Hemp growth for industrial applications and research is allowed with an exemption from the Drug Enforcement Agency. Some states also have passed more liberal hemp cultivation and production laws. However, the threat of DEA enforcement of existing drug laws does have a stifling effect on hemp’s growth.

How Is Hemp Being Used Today?

As New Frontier wrote in August (see Hemp Technologies uses hemp related building materials such as HempCrete, Hemp Insulation, and Hemp Mulch. The mixture of hemp with lime and other elements creates a fire-resistant material that also resists mold and adds (per their claims) greater energy efficiency.

Hemp oil and seeds are also have commercial appeal, as they have a variety of uses. Since it has a high level of polyunsaturated essential fatty acids, and is high in some amino acids, hemp has great nutritional benefit. Hemp oils, extracts and edibles are most often what consumers see in the marketplace.

While hemp has been traditionally used as a paper (it has qualities that prevent fading or discoloration), as well as in textiles for clothing, it also is being used to create biodegradable plastics, paint, insulation (as mentioned above), biofuel, food, and animal feed, and even converted into malt for use in brewing beer.

One of its benefits is that hemp can be grown quickly, and does not require pesticides or herbicides. It also helps to prevent topsoil erosion. All of which are factors that make hemp an excellent crop for farmers.

The changing political atmosphere and social attitude towards marijuana has allowed for hemp to slowly gain recognition as a viable crop and business enterprise. Colorado, which has been seen as the leader of all states in making progressive changes to cannabis policy, become the first state to produce and certify domestic hemp seeds. Though it has taken a few years,

the Colorado Department of Agriculture now has certified hemp seeds that “consistently produce plants low enough in the chemical THC to qualify as hemp”and not as marijuana. By 2017, these hemp seeds will be available for purchase in the 29 U.S. states that allow hemp production, though some experts predict the seeds will be slightly more expensive than those purchased over-seas, because of the certification.

The Future of Hemp In The U.S.

Last year, the Hemp Industries Association (HIA) estimated the total retail value of all hemp products sold in the U.S. at $620 million. The challenge has been that much of the hemp used in those products has come from outside the U.S. Restrictive laws and DEA enforcement continue to slow domestic growth, but with laws changing across the country – it is possible that 2017 sees dramatic growth in domestic hemp production.

According to the North American Industrial Hemp Council, more than 25,000 products can be made from hemp. And as we can see from ongoing research and new businesses, hemp has potential to be an excellent substitute or renewable resource in everything from building materials, energy, food, fuel, body care, and more.

As states and the Congress continue to evolve their views on hemp, domestic growth and product development is sure to continue to rise, serving as a benefit to the overall economy.