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A Year Into A Resurrected Hemp Market, How Are States Handling It?

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A Year Into A Resurrected Hemp Market, How Are States Handling It?

By J.J. McCoy, Senior Managing Editor, New Frontier Data

Since federal passage of the 2018 Farm Bill last December, interest in hemp farming has catalyzed a national industry reborn after decades of prohibition. Reports from state agriculture officials indicate that licensed hemp acreage for 2019 has more than tripled, with the number of hemp licenses issued having quadrupled since 2018. It is increasingly likely that the U.S. hemp industry will see more acreage planted this year than in 1943, the peak of cultivation during World War II.

Hemp has been making headlines for its impact on several mature markets – from food and textiles to building construction and nutraceuticals – and is emerging as a potential commodity ripe to not only influence but possibly revolutionize major economic sectors around the world.

Throughout a previous report, New Frontier Data has elaborated on the potential for retail and channel sales across CBD, supplements, consumer products, and industrial products, including wholesale and market pricing for biomass, flower and CBD wholesale products including historic and recent prices per kilogram for CBD isolate, full-spectrum oil (FSO), and THC-free distillate.

In a newly released report by the Hemp Business Journal (HBJ, a division of New Frontier Data) along with Vote Hemp, the U.S. Hemp Market: 2019 States Ranking provides in-depth, strategic insights about U.S. state hemp markets, including which are leading the domestic industry today, and those positioned to become dominant in years to come.

Several states entered the arena this year, often exceeding estimates for growth across the supply chain and from cultivation to retails sales. As cultivation booms across the U.S. in top hemp-producing states, an increase in processing licenses and facilities demonstrates a course to the inevitable commoditization of raw hemp products.

Across a majority of states having reported their licensed cultivation areas, the combined totals mark more than a threefold increase in total acreage from 2018. Colorado leads all states with 80,000 licensed acres, followed by Kentucky with 60,000 acres, and Oregon placing a close third at 54,940 acres.

Meantime, while the 2018 Farm Bill was expected to open the mass-market retail channel with access to better banking, credit card processing, and reduced retailer risk, what proved more unpredictable was the extent of CBD products' explosive "fad-like" phenomenon extending their availability to department stores, apparel retailers, and restaurants. Mass-market retailers like CVS and Walgreens will continue to grow sales of topical products, and look to offer ingestible products pending regulatory clarifications from the FDA.

Until then, some states will prosper under increased mass-market retailer distribution, while other states will fall behind with outdated hemp and CBD states laws in effect. The uncertainty surrounding the FDA's pending position regarding CBD products has introduced new risks for companies heavily invested in CBD-infused foods, drinks, and other ingestible products. While such risks have done relatively little to dissuade thousands of entrepreneurs and investors who have flocked into the space, those operating outside the final regulatory guidelines may face substantial retooling costs, or experience dramatic shifts in their strategic directions.

As such uncertainty looms, respective state attorneys general offices continue to set the legal state-by-state standards by which companies operate. The trend of asserted states' rights to define their markets reminds observers of how states responded to cannabis reform — with some states accepting legalized markets, and others retaining highly restrictive or prohibitive markets. Pending FDA clarity regarding hemp-derived CBD, states will be expected to function similarly (i.e., with sales continuing to boom in many of the top state markets identified), while other states seem inclined to remain hidebound about hemp CBD.

The post A Year into a Resurrected Hemp Market, How Are States Handling It? appeared first on New Frontier Data.

Image Sourced from Pixabay

Posted-In: cannabis industry CBD HempCannabis News Global Markets General

 

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