Trends in Industrial Hemp Market
Cultivation of Industrial Hemp Being Legalized
The legalization of the cultivation of industrial hemp in many countries is driving the market. Cannabis sativa L., which is used to make industrial hemp, is not marijuana, but a different cultivar of the same species. A resurgence in cultivation is being seen since the European Union, the U.S., and many other countries have legalized it, provided that the mandates for low THC levels are adhered to.
In the U.S., the 2018 Farm Bill (the Agriculture Improvement Act of 2018) removed hemp with less than 0.3% THC from the Controlled Substances Act's definition of ‘cannabis’. In June 2018, the FDA approved the first CBD-based drug, Epidiolex, for the treatment of childhood seizures associated with two forms of epilepsy.
In the European Union, the cultivation must be of varieties containing less than 0.2% THC. In these countries, hemp seeds, seed oil, and flour are permitted, while all extracts and derivatives containing cannabinoids are considered “novel”. Additionally, in March 2019, the Chinese National Anti-Drug Committee announced that CBD is not included on the list of narcotic drugs in the country and that it is not a controlled drug. It also stated that cannabis with a THC content of 0.3% or less can be grown in certain parts of China.
The legalization of industrial hemp cultivation in North America and Europe has shifted the focus on producing oilseeds and CBD oil; CBD is a non-psychoactive cannabinoid that can be employed in the food and medicinal industries. Further, CBD is becoming popular as a food supplement and a component of pharmaceutical and cosmetic products.
Long and Complicated Regulatory Procedure Hampers Market Advance
As a significant portion of hemp still goes into recreational use, growers, THC and CBD extractors, and end product manufacturers have to undergo extensive government scrutiny before being licensed and even during production. Since different countries look at this product differently, the regulatory procedures and the level of checks and compliance vary significantly. Moreover, CBD is not yet approved from pharmaceutical or food & beverage use in many countries, thus limiting its application.
Moreover, its cultivation requires specific conditions, such as high humidity with up to 30 inches of annual rainfall, good soil drainage, and compact soil. Further, since hemp and marijuana are similar, it can be difficult for new growers to distinguish between the two. This raises the risk of the cultivation of the wrong species, which can bring about regulatory action, such as fines or confiscation of the entire farm.