Talking about hemp is like talking about inside baseball. Unless you one of the legions that have found benefits with cannabidiol (CBD), most people in the US and elsewhere have a faint idea that industrial hemp and marijuana are related and assume they are probably both illegal. People in the industry, throughout the supply chain from farmer to processor to retailer are climbing a steep information curve.
Hemp can be produced as an oilseed, a fiber or a dual-use plant. After further processing, hemp is used in a variety of consumer ready products including food, apparel, shoes, cosmetics, supplements, nutraceuticals, pharmaceuticals. The estimated value of the US market for consumer ready products in 2019 was over $4 billion and is forecast to be $24 billion by 20251. The estimated global market value for consumer ready products is $11.1 billion2. Industrial use for processed hemp products includes technical textiles, building materials, feed and pulp.
The global industrial hemp and products market was estimated at $11.1 billion in retail sales in 2019. With an annual growth rate of 52 percent, driven by continued strength in textiles, food and industrial uses and hemp-derived cannabidiol (CBD), the market is forecast to be worth $89 billion by 20253. The hemp for industrial use, textile and CBD market is expected to quickly expand and be the primary driver of global industry growth.
In the US, industrial hemp production was legalized in the 2018 Farm Bill. Industrial hemp and marijuana are produced from the same species of plant, Cannabis sativa. The Farm Bill legalizes the production of industrial hemp as long as it contains less than .3% delta-9 tetrahydrocannabinol (THC), the active psychotropic in marijuana. Regulations are in place for USDA and production regulated in all but four states. Because of prior production restrictions, the US market has been largely dependent on imports, both as finished hemp-containing products and as ingredients for use in further processing. The US was the largest hemp fiber importer in 2019, with over $1 million in imports.
Outside the US, industrial hemp has been legal in some places, like Europe, illegal in many, like Japan, Korea, and many parts of Africa, and restricted, in places like China. Since 2018, production, commerce and international trade have grown. The global industrial hemp and products market was estimated at $11.1 billion in retail sales in 2019. With an annual growth rate of 52 percent, driven by continued strength in textiles, food and industrial uses and hemp-derived cannabidiol (CBD), the market is forecast to be worth $89 billion by 20254.The hemp for industrial use, textile and CBD market is expected to quickly expand and be the primary driver of global industry growth.
By 2021, the global trade of hemp is forecast $8.1 billion across all markets, representing a three-year compound annual growth rate (CAGR) of 83%5. Global growth in 2020 and 2022 is expected to accelerate as a result of regulatory certainty in Europe and Asia, the 2018 Farm Bill in the US, Epidiolex’s going to market in the US, Canadian licensed cannabis producers (LPs’) entering the international industrial hemp market, and the rise of Chinese industrial hemp CBD-derived nutraceutical and supplement production.
Europe, China, and Canada are currently the primary sources of industrial hemp. With the passage of the 2018 Farm Bill, the US has become the third largest producer of industrial hemp. While Europe has rapidly developed a robust hemp and CBD market, pending US FDA rules on CBD, the US is positioned to provide leadership in hemp-derived CBD, food, supplement, and personal care products6. China has led global markets in textiles with almost 80% of the $1.7 billion hemp textile market, in 20197. Europe led the global market with $424 million in industrial product sales.
Long term exports will depend on trade facilitation and increasing trade standards. Trade facilitation efforts include working with foreign buyers and providing them opportunities to learn about US industrial hemp products and the US industry’s capacity to deliver high yield oilseed, fiber and cannabinoid extract-use industrial hemp.
Standards and Harmonization. The international industrial hemp industry has developed fragmented and mostly small-scale operations. The US Farm Bill opens global trade and the opportunity to standardize and harmonize industry and regulatory standards. In addition, discussions are already underway about standardizing approaches to baling, chipping and measuring oil impurities.
1 US CBD Market_Free Report_Brightfield Group (2019) https://content.brightfieldgroup.com/2019-us-cbd-market.
2 Ibid. See also, BrightGroup-EU CBD Report (2020) https://content.brightfieldgroup.com/european-cbd-market-report-2020 and FAS Hemp GAIN Reports.
3 Cannabidiol Market revenue worth over USD 89 Bn by 2026: Global Market Insights, Inc., https://www.globenewswire.com/news-release/2020/02/20/1987618/0/en/Cannabidiol-Market-revenue-worth-over-USD-89-Bn-by-2026-Global-Market-Insights-Inc.html.
4 Cannabidiol Market revenue worth over USD 89 Bn by 2026: Global Market Insights, Inc., https://www.globenewswire.com/news-release/2020/02/20/1987618/0/en/Cannabidiol-Market-revenue-worth-over-USD-89-Bn-by-2026-Global-Market-Insights-Inc.html.
6 See., e.g., FAS Gain Reports: An Overview of the Dutch Hemp Market_The Hague_Netherlands_05-08-2020, Italian Industrial Hemp Overview 2020 _Rome_Italy_02-18-2020, The German Hemp Market – Hemp Makes a Comeback in Germany_Berlin_Germany_02-10-2020.