Farmer Will Cabaniss stands with his crop on his 20-acre hemp farm in Pueblo, Colorado, in June 2016. (Kristen Wyatt, The Associated Press)

Hemp products booming, but U.S. farmers hampered by its Schedule I status

Is industrial hemp, a variety of cannabis and a relative of marijuana, as versatile and important a crop as some of its proponents believe?

It certainly appears to be a much underutilized resource for American agriculture. According to a report released in March by the nonpartisan Congressional Research Service, there are more than 25,000 hemp products being used internationally.

Industrial hemp is bred to have only traces of THC, the intoxicating chemical compound that gets marijuana consumers high. Nevertheless, as a form of cannabis sativa L., hemp remains illegal under federal law – where it has been lumped together with marijuana under the Controlled Substances Act and classified as a dangerous Schedule I substance.

But that outlaw status for hemp is beginning to relax.

Related: American hemp has a tumultuous history. Now it’s coming out of marijuana’s shadow.

Recent estimates by the advocacy group Vote Hemp and the Hemp Business Journal calculated the total retail value of all hemp products sold in the U.S. last year to be at least $688 million.

The two groups break down the U.S. hemp market as follows:

  • Personal care products: 24 percent ($163 million)
  • Hemp-derived cannabidiol (CBD) products: 19 percent ($130 million)
  • Hemp foods: 19 percent ($129.3 million)
  • Industrial applications: 18 percent ($125.5 million)
  • Consumer textiles: 14 percent ($99.5 million)
  • Supplements: 4 percent ($26 million)
  • Other consumer products (including paper and construction materials): 2 percent ($14.4 million)

Many states, meanwhile, are setting up their own hemp research and pilot programs after the federal Agricultural Act of 2014, a.k.a. the Farm Bill, opened the door for limited production of hemp that contains less than 0.3 percent THC.

According to Vote Hemp, more than 9,600 acres of hemp were planted in 15 states last year. Thirty universities reportedly conducted research on hemp cultivation during 2016, and more than 800 state hemp licenses were issued nationwide.

“The U.S. remains the largest consumer market for hemp products worldwide,” Vote Hemp president Eric Steenstra said in an April 2017 press release.

“However, misguided drug policy still prevents our farmers from cultivating hemp at the scale needed to meet consumer demand,” he continued, “so instead nearly all the hemp to supply the U.S. market is imported. We need Congress to pass federal legislation to allow commercial hemp farming nationally, to let our farmers and American business take advantage of the robust economic opportunity hemp provides.”

That call for allowing nationwide legalization of industrial hemp in the U.S. is gaining traction with a wide array of industry analysts and agricultural experts.

One challenge is that American scientists have to become reacquainted with hemp, after decades of federal prohibition and a lack of federal funding for research, said John McKay, plant sciences professor at Colorado State University.

“None of my plant science colleagues in the United States have any idea about this plant because we haven’t been able to touch it,” McKay told The Cannabist. “So we’re doing basic stuff now.”

There is more domestically-grown hemp available to scientists now than there was in previous years. The Hemp Business Journal reports crop production has increased from just under 4,000 acres in 2015 to over 9,600 acres planted last year. Colorado and Kentucky are the nation’s current leaders when it comes to hemp acreage. Earlier this year, Colorado became the first state in the nation to certify domestic hemp seeds.

McKay has co-founded a private company, New West Genetics, meant to improve the genetics and growing properties of cannabis, including hemp. And he noted that many American farming communities are looking for alternative crops.

“It’s well known that if you rotate a diverse mix of crops in your fields you get better yields and less disease,” he said. “So having something that grows well … that farmers can make some money on and increase the diversity of what they’re growing, is needed throughout the agricultural production states in the U.S.”

McKay said he believes hemp’s largest potential, in terms of overall crop production, is as an animal feed. Hemp seed used as grain has all 20 amino acids and is unique as a vegetarian source of omega fatty acids. “It’s about 30 percent protein and 30 percent fat,” he adds. “Usually grains are either high in fat or high in protein, but not both.”

The concept of hemp as livestock feed is gaining political traction in Colorado. During the past legislative session, the Senate voted unanimously in favor of a bill that would allow the Colorado Department of Agriculture to study the feasibility of allowing farmers to use hemp in animal feed, and the measure was signed into law by Gov. John Hickenlooper in March. Additionally, a House bill signed by Hickenlooper in April excluded marijuana — but not hemp — from the official definition of farm products.

Returning hemp to the field also holds appeal because it’s a particularly resilient, cost-effective and sustainable crop. As the National Hemp Association notes, the plant is pest resistant, so it requires fewer pesticides and agricultural chemicals. It also causes less soil nutrient depletion than many other major crops and can grow well in poor soil. McKay said solid research is needed, however, to determine hemp’s cultivation capabilities and resource needs, including fertilizers and water usage, in the U.S. growing environment.

The broad scope of hemp’s potential applications is also exciting investors. But Sean Murphy, founder and publisher of the Hemp Business Journal, said the U.S. hemp market will remain a niche industry until full federal legalization allows more processing infrastructure to be developed.

“There needs to be more research, there needs to be more product development and (research and development),” he told The Cannabist. “The scenario that a lot of the people in the industry talk about is we need a better consumer and mass market understanding and…demand to drive a lot of the economics of that.”

“It’s just a matter of the market maturing,” McKay said. “The Farm Bill is a great start for the ending of hemp prohibition, but more buy-ins from our federal representatives are needed to provide funding for research and the unimpeded development of future hemp markets.”