The U.S. hemp-derived cannabinoid market has swelled in total value, but the industry continues to face serious threats from a messy patchwork of state bans and regulations that are stunting growth and pushing production overseas, according to a leading cannabis economist.
“All this hysteria over cannabinoids is having a profound effect on the fiber and grain environment,” said Beau Whitney, founder of Whitney Economics, told Green Market Report in an interview.
Whitney’s analysis shows the hemp market, including CBD, THC, CBN, CBG and related compounds, has grown into a robust industry that now rivals legal marijuana markets. Two years ago, his firm calculated the total market for hemp-derived cannabinoids ranged from $21.3 billion to $35.8 billion, with a midpoint of $28.4 billion.
Of that total market, Whitney noted that “about $21 billion was available on the legal side and then about $7 billion was on the illicit side.”
Recent surveys conducted by Whitney in states, including Arizona, Illinois, Tennessee and Texas, validated these projections. “In states where I could get data and states that allowed for the sales, that’s where (the data is) really solid,” Whitney said. “They’re being confirmed as being conservative.”
While it isn’t an apples-to-apples comparison, since Whitney’s measuring total market potential for hemp against only legal sales in the marijuana world, the economist said it’s becoming nearly impossible to measure legal hemp sales accurately as state regulations constantly shift.
“Every time I turn around, a different state has a different proposal to ban all of this,” Whitney said.
As a result, Whitney’s firm focuses on measuring total market potential rather than solely legal sales. Still, he sees potential growth beyond current projections, especially with hemp-derived cannabis beverages making a splashy entrance to the market.
“Hemp-derived cannabis beverages, Delta-9 beverages, are coming on in a big way,” he said, noting these products are breaking out of traditional CBD shops and into “bars, liquor stores, restaurants and grocery stores.”
According to Whitney, legislative approaches to hemp cannabinoids have had unintended consequences across the broader hemp industry. The confusion also affects hemp fiber and grain sectors that have nothing to do with intoxicating products.
“Banks are debanking hemp fiber and hemp grain companies,” Whitney claimed. “Investors are pulling back on investment into the infrastructure.”
Whitney calculated that “the lost economic potential because of these legislatures was between $20 (billion) and $25 billion dollars.” He added that he’s “taken (his) acreage forecast through 2030 down by over 4 million acres.”
Whitney estimated “an impact to farmers of between $1 (billion) and $3.5 billion in revenue” in lost opportunities.
Licensed hemp acreage plummeted from 525,000 acres in 2019 to just 30,000 acres last year. That decline means there isn’t enough domestic acreage to support the hemp cannabinoid industry, potentially pushing manufacturing overseas.
“It’s driving manufacturers to China and to South America and Canada and anywhere else that can get CBD or CBD biomass,” Whitney said, which creates additional public safety risks as “Chinese CBD is laden with heavy metals.”
He said that the irony is that policies ostensibly designed to protect public safety might actually be increasing risks. “The whole legislative goal of having increased public safety … all their policies are running against that, and they’re actually increasing the public safety risk rather than decreasing it.”
Whitney has long advocated for product-level regulation rather than wholesale bans, suggesting age restrictions, testing requirements and proper labeling would be sufficient, “if it’s intoxicating.”
“That’s all you need to do,” he said.
Additionally, current regulatory approaches, he argued, are creating a false binary.
“The dispensary model for marijuana is failed. It’s an abject failure because it’s limiting people’s access,” he said. “Not everybody wants to go in there.”
Whitney also noted that declining commodity prices for corn, wheat, soybeans and other staple crops have driven farmers to seek higher-revenue alternatives. Hemp represents not only potential increased revenue per acre but also agricultural benefits – if the industry is actually allowed to develop.
“Hemp is a great rotational crop because it helps with the soil, it restores certain aspects of the soil, and it takes impurities out of the soil,” Whitney explained. He added that using hemp in rotation can increase output for subsequent soybean crops “on a significant per bushel level.”
Despite the challenges, Whitney still forecasts potential growth, projecting “a million acres in 2030, which is twice the size of it at its peak.”
Many have attributed much of the regulatory confusion to federal inaction, particularly from the FDA, which has taken a hands-off approach and created much of the uncertainty. Whitney expressed hope that the upcoming farm bill might provide greater clarity, though he noted the legislation “has been pushed out a number of times.”
The post Regulatory chaos threatens US hemp industry appeared first on Green Market Report.
“While alcohol use appears to perpetuate a reinforcing cycle of stress and poor sleep, cannabis use may offer short-term stress relief and perceived sleep benefits,” investigators determined.
Researchers concluded, “The findings from the present study underscore the importance of establishing regulatory frameworks that address safety, labeling, and consumer education related to delta-8 THC products.”
Eighty-one percent of participants reported reduced pain following their use of CBD products.
“Legal hemp and illegal cannabis are indistinguishable by appearance, texture, and odor,” the court determined.
A third bill extending the moratorium on new marijuana business licenses was also approved by lawmakers.