There’s no question that 2018 has been a landmark year for the hemp and CBD industries. With the approval of the Farm Bill presented by Senate Majority Mitch McConnell, hemp has now been taken off the list of federally controlled substances.
This isn’t a new bill, in fact it is one that has been around since 2014, when a bill was passed to distinguish hemp from marijuana based on the THC content. In 2014, the passing of that bill made it legal to grow and study hemp through various universities and agricultural programs.
Industrial hemp is defined as any part of a cannabis plant that has no more than 0.3 percent THC based on the dry weight.
The Growing Hemp Industry
Thanks to the passing of the Farm Bill, the provision from 2014 will be repealed, which means that now it is possible to expand who and where industrial hemp is grown. In 2017, more than 25,000 acres of hemp were grown across 19 states, which represented an increase of 126 percent since 2016. It is expected that this growth is going to continue with the new legislation that is in place.
While both chemicals are derived from hemp, CBD is the element that doesn’t produce a psychoactive effect, unlike THC. This means there is no “high” sensation experienced with hemp, especially considering the many uses it has, such as for rope, fabric, paper and more.
The Growing Rate of CBD Sales
Thanks to the passing of the Farm Bill, it is expected that the CBD market will grow by more than 40 times what it is now by the year 2022. While federal legalization is great news for CBD companies, the question that many have is how do they prepare for this change, and what are they really hoping to see?
This is a question that is still being pondered by many in the industry, and for most, it is a “wait and see” situation.
The Increase in Demand for Hemp Acreage
With the original bill for limited hemp growing rights the expansion of hemp was significant. While it was still considered a minor crop in 2016, it was rapidly expanding. In fact, in 2017, there were approximately 26,000 acres of hemp being grown in the US (almost double the previous year) and was produced by approximately 1,500 farmers.
With the amendment to the 2014 bill, which was approved on December 12, 2018, the federal ban on hemp cultivation was lifted with broad and bipartisan support.
Upon passing, the American hemp industry is projected to balloon in short order and create a huge demand for farmers and land for this crop.
There are some who believe that in rural areas, the demand for more farm acreage may impact the real estate market. This is another factor that is unknown since the new bill has been passed. While the increase in demand will likely result in a surge of prices for available farmland, no significant change in this particular industry is expected.
The Establishment of Quality Standards
While this isn’t a topic that has been breached in the U.S. yet, it is something that Canada (the neighbors to the north) have already done. The fact is, with hemp now being legal, more people are going to be growing it. As a result, eventually there will have to be industry-wide standards regarding the growing process and selling requirements.
While managing the crops grown by 1,500 farmers may have be manageable, with the new Farm Bill this may not be as possible. With the increase of product that’s projected to come to the market offer the course of the next few years, the need for quality standards is high and something that will have to be considered at some point.
A Better Understanding of the Farm Bill
For many, the Farm Bill contains a lot of information that isn’t exactly clear – after all, this bill alone is more than 1,700 pages long. Within those pages, things like pesticides, the SNAP program and other factors – even tariffs – are discussed.
While the actual impact of this bill on farm land, real estate and farmers in general is yet to be seen, there are many experts and government officials who believe that the bill will be beneficial in the long run. With the increase in demand of CBD oil, hemp products and other related items, the ability to make these in states where it is legal is a huge advantage. Not only that, but hemp is considered a cash crop, which is going to lead to farmers being able to make up the deficit that some of the newly appointed tariffs have created in the recent past.
So, is it positive for the country, citizens and individual farmers? This is a question that time will answer. Currently, there are many who support what the bill offers and the ability to grow hemp, which is a commodity that is in high demand both in the United States, as well as in other countries.