The Emergence of New Industries
The Hemp Industry
Today, hemp and hemp seeds are no longer controlled by the Drug Enforcement Agency as a “controlled substance,” resulting in the emergence of new, high growth sub-industries. These include:
The Farm Bill established a pilot program for the production of industrial hemp, which had previously been prohibited under U.S. federal law. The University of Florida found hemp to be a versatile crop that can be used in a wide range of products, including textiles, paper, construction materials, and food.
By legalizing hemp production, the Farm Bill has created new opportunities for domestic farmers and manufacturers to produce hemp-based products and compete with imported goods.
Hemp farming has become a popular option for farmers looking for a profitable and sustainable crop. The crop requires less water and pesticides than other crops, making it an environmentally friendly option. In fact, the Rodale Institute, a non-profit research organization focused on organic farming, found five hemp products that can mitigate climate change.
- Hemp and plant-fiber plastic
- Hemp paper
- Hemp in fabrics and textiles
- Building materials
- Hemp biofuel as an alternative to fossil fuels
These environmentally and cost-friendly crop options increase the demand and markets for hemp leading to a potentially lucrative market for farmers and growth across the agricultural sector.
The CBD industry, which has exploded in popularity in recent years, is another area of hemp that presents and interesting and lucrative profit-making opportunity for some companies. CBD, or cannabidiol, is a non-psychoactive compound found in hemp and marijuana plants that has been credited with a wide range of health benefits.
CBD products, such as oils, capsules, and topicals, have become increasingly popular in recent years, and their ingredients may be found in thousands of products sold everywhere from common pharmacies and convenience stores to “big box” and department stores. The market for CBD products is expected to continue to grow with some estimates suggesting that it could be worth $20 billion by 2024.
Perhaps not as widely known, hemp can also be used to create sustainable building materials such as Hempcrete, hemp insulation, and hemp fiberboard.
Springer Nature, a world leading science journal, published a study finding that hemp materials are renewable, biodegradable, and have a lower environmental impact than traditional building materials. Many companies, such as Pennsylvania-based Americhanvre, have been developing hemp-based building materials which have contributed to greater overall energy efficiency and building sustainability. With the price of lumber and building materials increasing, hemp is becoming an attractive alternative.
Other industries, beyond hemp, have also taken off, including:
Organic Food Industry
Today, the organic food industry is a multi-billion dollar industry that continues to grow as more consumers seek out healthier, more sustainable food options.
The Farm Bill provided additional support for organic farmers through programs like the National Organic Program and the Organic Certification Cost Share Program. These programs help small farmers and businesses meet the strict requirements for organic certification and allow them to compete with larger, more conventional producers.
The Farm Bill has also been instrumental in the growth of the regenerative agriculture movement. Regenerative agriculture is a holistic approach to farming that focuses on building healthy soils, promoting biodiversity, and reducing the use of synthetic inputs like pesticides and fertilizers.
The Farm Bill has provided funding for research and education on regenerative agriculture practices, as well as support for farmers who adopt these practices. Today, regenerative agriculture is seen as a promising solution to many of the environmental and health challenges facing the food system.
It’s worth noting that other well-established industries have also experienced growth as a result of the Farm Bill and the tremendous growth of the hemp industry.
As mentioned, hemp farming and CBD production, has become a popular option for farmers looking to diversify their crops and increase profits by taking advantage of incentives of the bill designed to promote the industry at large.
Within the industry, the new legislation has encouraged nearshoring by providing incentives for key players across the industry. Through the Specialty Crop Block Program and the Local Agricultural Market Programs, domestic production of certain agricultural products (corn, cotton, wheat, soybeans, rice, dairy, and more) has been encouraged through subsidies, reimbursements, tax write-offs, and research grants.
The growth of the CBD industry has had a significant impact on the growth of the retail industry. Today, as interest in CBD products continues to grow, retailers are likely to see increased demand for these products. Additionally, retailers that carry hemp-based products, such as clothing and construction materials, may also see increased demand as consumers become more interested in sustainable and eco-friendly products.
The legalization of hemp has also had an impact on the manufacturing industry. Hemp can be used to create a wide range of products, including paper, textiles, and bioplastics.
As the demand for sustainable and eco-friendly products grows in production-related industries, manufacturers are likely to turn to hemp as a viable alternative to traditional materials. This could lead to increased demand for hemp-based products and a shift away from the non-renewable materials traditionally used.