What New U.S. Hemp Legalisation Means for the Industry

By Maria Onofrio

Thu, 5 Jul 2018

After a decades-long ban due to marijuana prohibition, the U.S. Senate has passed The Hemp Farming Act, legalising hemp as an agricultural commodity, while removing it from the federal list of controlled substances.

The Act passed through legislators as part of the Agriculture Improvement Act of 2018 (Farm Bill), and cedes control of hemp production to states, enabling researchers to apply for federal grants from the USDA.

The wider bill contains more than 1,000 pages, covering everything from farm subsidies to trade, however Senate Majority Leader Mitch McConnell (R-Ky) singled out the Hemp Farming Act for attention, announcing in a floor speech,

“Consumers across America buy hundreds of millions in retail products every year that contain hemp. But due to outdated federal regulations that do not sufficiently distinguish this industrial crop from its illicit cousin, American farmers have been mostly unable to meet that demand themselves.”

Many farmers, such as those in McConnell’s own Kentucky state, stand to benefit alongside the federal budget. Hemp recorded more than $16 million in product sales through Kentucky’s own pilot program last year, however this is just a drop in the ocean compared to the revenue even a state-wide roll out would bring in.

According to the research firm Brightfield Group, the U.S. market for hemp-derived CBDs “will swell to $1.65 billion by 2021 – a nearly six-fold increase”. CBD, or cannabidiol, is a special compound found in the plant genus Cannabis, but that lacks the psycho-active element that THC contains.

Hemp, Inc. stands to be a major beneficiary of the changes, and is already set to capitalize by growing its state-of-the art CBD extraction machine and setting up the Hemp, Inc. University. This has allowed them to train over 800 specialist hemp farmers in just over a year. As a result, the company expects to grow up to 25,600 acres of industrial hemp this year.

Prior to nationwide legalization, the period between 2016 – 2017 had already seen a 140% increase in the number of acres licensed for hemp cultivation in the top 10 hemp-growing states. This level of growth bodes well for the future strength of the hemp industry and its many applications.

Implications of Hemp Legislation

Industry Growth

While hemp has a few well-known and less well-known applications, the most important thing to consider is how this impacts U.S. Agriculture more generally. Hemp is generally grown like most other field crops such as corn and alfalfa.

However, the benefit of hemp is that it can be grown on about half as much water as corn, meaning that large scale adoption could free up precious water supplies in areas such as the dry west. Already, states in the west are the heavy growers of hemp, with Colorado leading the way at 9,700 acres harvested, prior to the bill’s passing.

Due to its psycho-active cousin, growing hemp requires a long process to obtain a permit, with regular inspections and strict guidelines to follow.

Despite this, there are significant pay-offs for the effort. Some U.S. farms have been reporting revenue of $90,000 per acre from CBD oil alone, prior to this week’s news. The passing of this bill will remove nearly all of the legal restrictions in hemp-growing, and open farmers up to the benefits that others enjoy, such as crop insurance and federal research grants.

Industry growth is ultimately fuelled by the huge potential hemp has for a range of products. While as many as 25,000 goods utilze hemp, there are a few products set to be revolutionized by this new legislation.

Contaminated Soil

Hemp’s abilities in cleaning soil contaminated with toxic substances has been increasingly documented. This process is known as ‘bioremediation’ or ‘phytoremediation’, and hemp has proven success in accumulating heavy metals from soil in contaminated fields near Chernobyl in the 1990s. Legalisation will allow us to study these affects even further, and if hemp grows well, the phytoremediation will pay for itself. Hemp can be a solution to the many degraded and polluted soils that are taken out of production.

Hemp Fuel

There are two types of hemp fuel. ‘Hempoline’ is made using the plant’s biomass, and is made by extracting its cellulose and converting it into fuel. ‘Hemp Diesel’ is made from hemp seed oil, which is processed in a very similar way to petroleum. Hemp fuel is a great source of green energy as it only releases the amount of CO2 taken in during growth, when burned, compared to petroleum fuels that release unequal and substantially more CO2.

Hemp Plastic

In today’s world, few people need reminding of the devastating effects our plastic consumption is having on the world. Hemp plastic, made using hemp cellulose, is non-toxic and biodegradable. As a direct substitute, hemp plastic is also strong and flexible, with high impact resistance. Furthermore, studies have also shown that hemp plastic can reduce CO2 emissions by 30 to 80 percent compared to oil-based plastics.

Health

CBD oil can be used to treat a variety of health problems, from basic muscle and joint strain to epilepsy and brain trauma. Much of the scepticism about efficacy has come from CBD being produced without regulation and with a lack of testing. The new legislation will allow for a rigorous testing system and research that will provide the relative certainty of epilepsy treatment for other illnesses.


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Maria Onofrio

monofrio@challenge.org

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