After a brutal shake-out that chopped hemp acreage in half in two years, the industry is focusing on hemp as a source of grain and fiber, a less profitable but possibly steadier market than cannabinoid (CBD) oil, used in food, beverages and dietary supplements. Analysts say the unclear regulatory status of CBD has throttled sales.
The first year of nationwide cultivation of industrial hemp has been a mixture of retrenchment and optimism for growth in the longer term. "The industry isn't going to go away," said hemp entrepreneur Morris Beegle on Thursday. "It's going to become more of a whole-plant industry."
Americans are consuming the cannabis derivative cannabidiol (CBD) in food, beverages, and supplements, and dosing their pets with it as well, but "there is still much that we do not know about ... potential risks," said FDA commissioner Stephen Hahn on Thursday.
The government will allow farmers to destroy "hot" hemp fields themselves, rather than having to hire a contractor to do it, and will expand the number of laboratories that can test industrial hemp for THC levels, said Agriculture Undersecretary Greg Ibach on Wednesday.
Industrial hemp, an infant crop heading for its first year under national regulations, is likely be a small player in the farm sector, with a future like a rodeo ride, said panelists at the Ag Outlook Forum on Thursday. "This is going to be a rough-and-tumble ride," said Tyler Mark, a professor at the University of Kentucky.
Challenges including competition for acreage, the threat of imports, and the necessity of building marketing networks "will determine patterns of development in the emerging U.S. hemp industry," said USDA economists in a report issued Wednesday.
A lot of farmers will give industrial hemp a try this year, the first time cultivation is allowed nationwide, USDA officials predicted on Thursday. But they said there was no way they could allow more THC in hemp despite complaints that the limit of 0.3 percent is so low that some growers will be penalized unfairly for a "hot" crop.
For all its cachet as a potential money-making crop for American farmers, industrial hemp ranked midway between safflower and flaxseed in plantings, with an estimated 230,000 acres in 2019, and industry leaders disagree whether 2020 will be a year of expansion or retrenchment. But the USDA is approving state plans to regulate hemp production and offering crop insurance for hemp growers, steps that could help establish the crop.
In a potential blow to the hottest-selling hemp product, the FDA said it "cannot conclude that CBD (cannabidiol) is generally recognized as safe among qualified experts for its use in human or animal food" because a lack of scientific evidence. The warning came as USDA gathers public comment on a rule that opens the way for nationwide cultivation of industrial hemp in the new year.
Industrial hemp faces more regulatory and legal hurdles than many other newly hatched industries, says a report from agricultural lender CoBank. While growth in the industry is driven by cannabidiol (CBD), widely available in foods and as a supplement, two other markets hold potential: the fiber and the grain and seed sectors.