Hemp is in the headlines in mid-2024, prompting the question: has the wider world finally awoken to the potential of this often-misunderstood Cannabis sativa variety, spurring trending discourse and subsequent media attention? Alas, no.

Instead, hemp is on the lips of legislators thanks to the Miller Amendment. The “loophole closing” legislation threatens to effectively bulldoze the nascent hemp industry, with catastrophic consequences that will reverberate both nationally and internationally — for established national brands and budding minority-owned businesses alike.

But before we analyze the disastrous nature and scope of Representative Miller’s proposed amendment to the 2024 Farm Bill (officially the Farm, Food and National Security Act), let’s dig into the details around hemp.

This article, the first in a series, sets out a practical definition of the plant and gives a brief overview of its current cross-industry applications.

A quick hemp history

Hemp is a variety of the Cannabis sativa plant. Primarily cultivated for industrial and wellness purposes, the hemp plant is considered non-intoxicating because it contains low levels (a maximum of 0.3%) of tetrahydrocannabinol (THC), the primary psychoactive compound found in cannabis.

Once a widely grown crop in colonial America, hemp production was first curtailed in 1937 via the Marihuana Tax Act. While hemp was traditionally cultivated as a fiber source, its association with its higher-THC cousin led to its restriction at both the state and federal levels. The 1937 tax legislation effectively halted the crop’s production because it required farmers to secure prohibitively difficult-to-obtain tax stamps.

The de facto ban was formalized with the passing of the Controlled Substances Act of 1970. Hemp was officially bundled among other cannabis varieties and ruled federally illegal.

In 2014, the Agricultural Act, more commonly known as the 2014 Farm Bill, allowed states to begin pilot hemp growing programs for research purposes. With the Farm Bill’s 2018 iteration, the floodgates finally burst. The legislation federally legalized hemp, removing the crop entirely from the definition of marijuana in the Controlled Substances Act (CSA). Hemp’s definition was amended to include “the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers …”

Of course, stringent regulatory requirements, including state and federal oversight, remain. The USDA’s final rule on hemp production, published in 2021, introduced key provisions such as licensing, THC testing, and disposal of non-compliant plants.

The hemp industry across the US today: Key sectors

The legislative reforms outlined above enabled broad hemp cultivation across the US, as well as the commercial transfer of hemp-derived products across state lines. The market has expanded accordingly; the USDA’s 2024 Hemp Report showed that the value of both floral hemp and seed production is trending upward, with an 18% increase in the value of all production in 2023 over 2022.

So, what’s going on behind the figures? Let’s dig further into this diverse industry and its key sub-sectors, their current challenges, and their respective sizes. From wellness to industrial manufacturing, the versatile crop drives multiple industries in 2024. Here’s a look at the core components of each.

Hemp-derived cannabinoids & consumables

CBD, health and wellness

CBD, or cannabidiol, is a non-psychoactive compound extracted from the flowers and leaves of Cannabis sativa varieties. One of the better-known of hundreds of active cannabinoids, CBD is present in both cannabis and hemp. Notably, only hemp-derived CBD is legal. If it’s extracted from a cannabis plant, it is illegal.

Increasingly recognized for its therapeutic potential, CBD is a popular ingredient in wellness products, including oils, edibles, functional beverages, and skincare and cosmetics markets.

According to Market.us, the global CBD market was worth 7.6 billion dollars in 2023 and has the potential to reach approximately $36.6 billion by 2033. Global Market Research anticipates a compound annual growth rate (CAGR) of around 21.2% from 2021 to 2028.

Meanwhile, Statista predicts product sales will reach nearly 16 billion U.S. dollars in the US by 2026.

Delta-9 and other cannabinoids

While CBD is the most commonly extracted hemp-derived compound, the 2018 Farm Bill also opened up the market to all hemp derivatives. This includes the best-known and most well-studied form of THC, Delta-9 THC, CBD’s psychoactive cousin. In addition to its social use, Delta-9 THC has been associated with a wide range of potential medical benefits, including anxiety, glaucoma, insomnia, low appetite, muscle spasticity, chronic pain, obstructive sleep apnea, and nausea.

Other forms of THC, such as delta-8 and delta-10, have similar chemical structures to delta-9, but their effects are usually different. Delta-8 THC and Delta-10 THC are derived from CBD. Delta-8 is often marketed as tetrahydrocannabinol’s “nicer younger sibling”; the compound is milder and less likely to cause anxiety than Delta-9 THC. Delta-10 THC, on the other hand, is regarded as being slightly stronger. While these derivative cannabinoids are natural, the manufacturing process for Delta-8 THC involves converting CBD from hemp with chemicals, which may include organic solvents and strong acids. This means that most delta-8 THC is semisynthetic, rather than the “natural” compound it is often claimed to be.

While the components of the market may appear disparate, its overall growth and impact are not to be overlooked. Whitney Economics, a cannabis data firm, reported that in 2022, total hemp product sales reached $28 billion, surpassing sales of the legal marijuana products market.

Crucially, while critics point to a “gray area” in the 2018 Farm Bill and dangerous loopholes in the legislation, particularly around semisynthetics, the bill allows individual states to regulate hemp and its derivatives more aggressively than federally required. As such, many states have excluded synthesized cannabinoids from their definition of the plant.

For example, California’s removal of synthesized cannabinoids from its hemp definition in 2021 effectively outlawed delta-8 products statewide. Meanwhile, delta-9 THC products became significantly more costly to produce, curtailing the viability of the market.

In Minnesota, the hemp-derived THC market has proliferated. Edibles may contain up to 5 milligrams of delta-9 THC per serving, with a maximum of 50 mg per package. Beverages may contain up to 10 milligrams.

Industrial hemp: Manufacturing, agriculture and environment

Industrial hemp is generally marketed as a fiber, a seed, or a dual-purpose crop. The industry produces fabrics, textiles, paper, construction and insulation materials, biofuel, livestock feed and bedding, and multiple other manufactured goods.

As well as its range of practical applications, industrial and agricultural hemp cultivation offer many environmental benefits. The plant is an excellent tool for soil remediation. It can be used to remove contaminants, prevent erosion, and enhance absorption and water retention.

Hemp can also be grown in a variety of climates and boasts impressive carbon capture capabilities — absorbing more CO2 per hectare than huge forests. As an ideal rotational crop, hemp can also contribute to circular and sustainable practices across the wider agricultural sector.

Consequently, the industrial hemp market’s significance is arguably far greater than the numbers suggest.

This industry sub-sector currently holds the smallest slice of the financial pie; the US industrial hemp market is estimated to be worth $253.5 million in 2024, around the same value as the global CBD pet market (as per Zion Market Research data).

The reality on the ground

US-based hemp farmers face a myriad of challenges in 2024. Harvested hemp still exceeds hemp sold, as per the USDA’s 2024 Hemp Report. Yet the application of modern farming practices to the cultivation of this centuries-old crop reaps clear benefits; both for the wider agricultural sector and land and for small-scale farmers who struggle to compete with larger actors when cultivating conventional or more established crops.

Notably, the value of hemp grown in the open in 2024 for seed alone increased 96% from 2022 to 2023. After years of fluctuations and difficulties for domestic hemp growers, yields are rising rapidly: per acre, hempseed yields jumped more than 210% in 2023. Work is still needed for the agricultural hemp industry to truly thrive, but such figures demonstrate both progress and potential as markets mature.

One plant: multiple industries with unique requirements

In all, the hemp industry is not a singular, clear-cut market. Just as whole plant extracts cannot be standardized to the same extent as synthetic pharmaceuticals, hemp markets cannot be packaged into one neat and convenient box.

When considering the potential of each of these emerging sectors, predicted figures vary, but the takeaway is the same. All of these markets are in their infancy. Businesses and farmers should be supported with favorable legislation — rather than restricted with a clumsy, unstudied, catch-all regulation — to provide scope for expansive, transformative, and safe cross-sector growth.