That legalization means big things for the hemp industry and farmers as authorities must now look upon hemp as it would any agricultural product, such as potatoes. This opens up the market for hemp farmers to do business without barriers — they don’t have to jump through the regulatory or business hoops that apply to the higher-THC varieties, which are still considered a Schedule 1 drug and defined as marijuana.
What Does That Mean For Cannabis Entrepreneurs?
The change allows cannabis companies and farmers to diversify their revenue streams and offerings through legal business opportunities, opening access to financial tools and public markets once unavailable due to hemp’s previous classification.
The hemp industry finally has obtained the legalization its pushed for throughout past decades. No longer does hemp have the most restricted drug classification. Moving forward, the U.S. Department of Agriculture (USDA) needs to develop national regulations that check THC content for the legal amount, but authorities cannot charge licensed hemp producers with a crime if the THC limit is exceeded. They can only destroy the plants.
While CBD will be legal in the New Year, that doesn’t mean one can add it to dietary supplements or food products. Those who sell CBD-infused or dried hemp flower products can safely ship over state lines, without fear of impound or interruption, but must follow the regulations that the USDA puts in place.
Growers who joined state pilot programs to grow hemp legally now qualify for crop insurance and can legally expand their acreage. They can apply for grants and loans, and just like any other farmer, they can write off their business expenses on their taxes. Producers no longer have to cross their fingers about crossing legal gray areas.
Hemp CBD Market Growth Projected to Triple
In 2017, the total CBD market in the United States made $367 millionthrough retail sales with a 39 percent growth rate, according to the Hemp Business Journal.
Thanks to legalization, the overall hemp market is projected to triple to $2.5 billionby 2022. That’s in three short years. $1.3 billion will come from CBD-derived products alone.
If the banks get involved, the credit card processors will also. Big box stores will open up their doors to producers and hemp products. Seismic shifts are coming in the cannabis industry, but the USDA is still monitoring the potential of the industry in terms of the economic viability of hemp.
The USDA will analyze the progress of 42 states and report back to Congress. Each state, territory and Indian tribe must submit their hemp-regulation plans to the USDA.
That falls under section 10113of the Farm Bill, and state departments of agriculture must consult with the chief law enforcement officer and state governor to submit a regulatory and licensure plan to the Secretary of USDA. If plans are not provided or approved, the USDA will put its own USDA-specific plan in place for hemp entrepreneurs to follow.
The state-specific plans present another wild card until revealed, but hemp is here to stay — and it’s now a legal crop. Big companies are already positioned to cash in, and producers are making plans to expand their growth. In 2018, 3,544 licenses were issued across 23 states.
From ethanol and rope to therapeutic CBD products, the hemp industry is set to blossom thanks to legalization. From flower to stalk and beyond, the whole hemp plant is now a legal consumer product, but remember to keep the THC under 0.3 percent.
As the hemp industry triples in the next three years, LVE Trust will be there to consult with entrepreneurs as a full-scale hemp commodities services provider. LVE Trust started with one hemp farm and one producer in 2012 and grew to work with thousands of hemp farmers and more than 100 lab processors around the world.
We saw them through the red tape, and we’ll be here for you to answer any questions as the industry booms. Now is the time to grow! Contact us at LVE Trust for a consultation and to learn how we can be your go-to commodities link and ally within the hemp industry.