From Debbie Ivy in Robertsdale, Alabama:
“My question is ... do you foresee the Hemp market becoming a profitable crop in America's future? Hemp is known for being a fast-growing plant that can be used to make usable fibers, paper, textiles, food for animals, etc. With many states that now allow the use of cannabidiol (CBD) oil do you think the Hemp industry will become a profitable market for the US?”
This is a timely question, Debbie, and the outlook for hemp as a crop is changing as we speak. Let’s make sure of the basics. Industrial hemp is a cousin so to speak of what is commonly known as marijuana. The major difference is the presence of two chemicals: THC-tetrahydrocannabinol, and CBD – cannabidiol. THC is the psychoactive substance we associate with pot. Hemp is defined as cannabis with less than .3% THC by weight. Hemp can be harvested for the fiber, or the far more lucrative seeds and leaves, notable refining CBD oil.
Fiber production is essentially a forage type of system, with various methods of processing. For farmers it appears like cutting, field drying, and baling are the usual processes. Allowing the cut fiber plants to lay in the fields, called retting, partially decomposing the fibers adds value but more field time. There are multiple fiber uses, but very few domestic processors.
The big excitement is CBD products. Pending an FDA ruling called GRAS – generally recognized as safe – the market for what are labeled CBD nutraceuticals is subject to wild speculation and intense investor interest, as an explosive demand cannot be ruled out. Harvesting hemp for CBD products is done in varied methods, even simultaneously with the fiber cutting.
I know only slightly more about hemp farming than I did before, but suggest these guidelines:
- Watch what happens in Canada, especially Manitoba. They are years ahead of us. Also Kentucky.
- Monitor the FDA ruling. The recent departure of its head will probably slow GRAS approval – no pun intended.
- I think h.emp will not be a commodity like grain, but rather a specialty crop like tobacco. The hemp market has yet to become demand-driven, but is now supply pushed by farmers looking for alternative income sources. In markets like that, my rule is to sell the seed, technology, or breeding stock, not the final product. The premium prices currently touted especially for CBD products are likely to collapse in the face of any massive production increases.
In short, this is a crop heavy with risk and unknowns, which means the profits could be massive for a short period for some early adopters. I do not see it becoming a major economic competitor to grains for the majority of farmers.