How Hemp Legalization Has Opened the Door for Growth in Other Industries
With the passage of the 2018 Farm Bill, formally known as the Agricultural Improvement Act of 2018, hemp became legal across the United States. The bill became effective January 1, 2019. Prior to this, hemp was not distinguished from other forms of cannabis, and had been illegal for nearly five decades, classified as a Schedule I substance under the 1970 Controlled Substances Act. Hemp, no longer considered a controlled substance, is now defined as cannabis with 0.3 percent or less of tetrahydrocannabinol (THC), the substance responsible for psychoactive effects in cannabis.
The legalization of hemp has also paved the way for hemp-derived cannabidiol (CBD). CBD, like THC, is an active ingredient in cannabis but, without any known psychoactive effects. CBD has been gaining popularity the past several years. It is now common to find CBD-infused products in drug stores and gas stations. You can find CBD in a variety of products from body lotions to coffees. CBD is believed to have a multitude of potential health benefits as varied as treating certain types of seizures or reducing anxiety.
The gradual shift in public opinion and awareness, as well as the new-found legality of hemp and hemp-derived CBD, is allowing for the emergence of new industries as well as growth and expansion in several existing industries.
Hemp Farming & Harvesting
Hemp growing is a highly specialized type of farming requiring specific machinery. The options for hemp farming equipment is varied and depends on multiple factors such as growing methodology and intended use of the hemp. The two most common uses for hemp are for textiles or CBD oil. Both require specific types of equipment. As the demand for hemp and CBD grows, so will the need for the various, specialized hemp farming equipment.
Extraction is an often-overlooked part of the CBD process. CBD is in high-demand and expected to be a $20 billion industry by 2024. In order to keep up with demand, either new product producers must emerge, or existing product producers must sizably scale their operations. Often, neither the hemp farmers nor the CBD product producers have expertise in extraction technology. This is creating a boom for manufacturers of the equipment required to extract CBD oil from hemp.
Foods & Beverages (and Packaging)
While CBD is often perceived as the golden child of hemp, hemp is making an appearance in several products. Food and drink products are a prime example. There are now hemp-based trail mixes and hemp milk. The hemp-infused food market has been steadily increasing, with U.S. sales expected to top $151 million and global sales expected to reach $479 million in 2020; a 46% increase from 2018.
It’s also worth noting that hemp is changing the face of food packaging. Hemp-based bioplastics and packaging are likely to become more mainstream as technological improvements drive the price down and societal pressures for more environmentally conscious packaging options increase.
These industries and markets are just a few of the many that have emerged and grown due to the legalization of hemp. While hemp is now legal across the country, the legality of CBD and other types of cannabis can still be murky, especially due to the complexity of varying laws and restrictions at state levels. Regulations can also vary depending on what industry or part of the supply chain a company operates within.
In order to take part in these tremendous emerging and growing opportunities, it is best to work hand in hand with an advisor. Whether planning to launch a new endeavor or adding hemp or CBD to some part of your existing business or processes, a skilled advisor, such as Joorney Advisory Services, is well suited to help you navigate and plan in this complicated and continuously evolving landscape.