Global Hemp, Poised to Make Its Impact with a Post-Industrial Heyday
By J.J. McCoy, Senior Managing Editor, New Frontier Data
Especially since its federal legalization was mandated through the passage of the 2018 Farm Bill at the end of last year, hemp has been making headlines for its impact across a range of mature markets – from food and textiles to building construction and nutraceuticals. Hemp is emerging as a potential commodity ripe to not only influence but possibly revolutionize major economic sectors around the world.
Hemp is a fast-growing, environmentally friendly plant with a low cost to produce. Not only is it one of the world’s most diversely applied and sustainable crops, but it has some 25,000 documented applications, or so many uses and byproducts as to have driven farmers to embrace the crop as a hedge against traditional but lower-value crops like soy, cotton, canola, and alfalfa.
As detailed in New Frontier Data’s recent release, The Global State of Hemp: 2019 Industry Outlook, during the early 1990s there were less than 10 countries growing hemp within an organized commercial market. Today, approximately three dozen countries are commercially growing hemp, with more than another dozen conducting research. In all, there are about 50 countries actively cultivating hemp, with many more considering whether to participate in the burgeoning rebirth of the industry.
Given the sheer amount of applications for the plant, there are myriad footholds for entry to industrial hemp’s related markets. For immediate purposes, a back-of-an-envelope review of motives for engagement includes at least five, according to New Frontier Data’s Chief Knowledge Officer John Kagia:
- The global hemp industry is growing dramatically as the plant’s versatile applications are better understood, and the costs associated with deploying such applications falls;
- Potential rescheduling of CBD by the United Nations this year will further accelerate both interest in and demand for CBD products, as the UN’s recommendation will be viewed as an endorsement of the compound’s therapeutic efficacy and low-risk profile;
- Hemp could challenge fossil-fuel-based products in a range of areas: Innovations in hemp-based bioplastics and biofuels (spurred by falling production costs) will lead to hemp-based products’ challenging petroleum-based products, including (as is already being done) BMW vehicle interiors. Ever since TV host and comedian Jay Leno posted an online video of himself test-driving a 2017 Renew sports car (with a chassis fashioned from 100 pounds of woven hemp), fewer potential participants have been willing to get left behind;
- Hemp-based foods will represent a tremendously high growth market given the plant’s rich nutritional profile, though brands and markets will need to proceed carefully in positioning such products less as any quickly dismissed health fad than rather as a durably adopted dietary option among consumer foods; and
- Hemp cultivation in less-developed countries across Africa, Asia, and Latin America will provide a high-volume, low-cost source for CBD, posing a considerable challenge to higher-cost producers in North America and Europe. Nevertheless, given the nascent hemp production in the developing markets, need will persist for the transfer of significant knowledge, technology, and capital for such emerging nations to develop the requisite processes and quality standards to sufficiently serve international markets.
NOTE: Beyond The Global State of Hemp: 2019 Industry Outlook, New Frontier Data, and the Hemp Business Journal provide in-depth analysis of the total CBD market – across hemp-derived, marijuana-derived and pharmaceutical CBD – in the industry-leading study, The CBD Report. For that comprehensive market research, please visit the product page.