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Industrial Hemp Profile

By Ray Hansen, content specialist, AgMRC, Iowa State University, hansenr@iastate.edu.
Profile updated August 2012 by Malinda Geisler, AgMRC, Iowa State University.


Currently, the Controlled Substance Act makes it illegal to raise industrial hemp (Cannabis sativa) commercially without a permit from the Drug Enforcement Agency(DEA). However, numerous state and national initiatives are working to return industrial hemp production to the United States, where it once was a major crop. Food and fiber uses for industrial hemp are growing rapidly and have increased over 300 percent, to an estimated 25,000 products, in the past few years. Much of that growth is coming from the increased sales of hemp food products.


Hemp production originated in Central Asia thousands of years ago. The plant is one of the oldest sources of textile fiber. In fact, hemp rivaled flax as the main textile fiber until the middle of the 19th century.

The crop was first brought to North America at Port Royal, Canada, in 1606. Industrial hemp was the most important non-food crop in the early history of the United States, being used for sails, riggings, canvas, ropes, clothing and paper. Its diverse uses made it a required crop, for a farmer’s and for the country’s existence.

The hemp industry thrived in Kentucky, Missouri and Illinois between 1840 and 1860 because of the strong demand for sailcloth and cording. From then until World War I, nearly all hemp in the United States was produced in Kentucky. During the war, some hemp cultivation occurred in Kentucky, California and most Midwestern states. With the passage of the Marihuana Tax Act in 1938, hemp production in the United States essentially ended. World War II led to a brief revival of hemp cultivation in the Midwest, because the war cut off supplies of fiber for rope, boots, uniforms and parachute cording. (Small and Marcus 2002)

New manufacturing technologies, crop diversification, increased wood products usage and the development of synthetics all aided in the decline of hemp production. As hemp’s use declined, so did the loyalty to the crop. This decline allowed for even more confusion between the values of industrial hemp versus the problems associated with its similarity to marijuana.

In the 1950s, domestic opposition concluded in anti-drug legislation that made it illegal to raise any cannabis plant varieties. This total eradication of the crop was designed to improve drug enforcement of illegal marijuana production. During this time, all hemp became classified as a "drug" under the Controlled Substance Act and subsequently placed control of hemp production under the control of the U.S. Drug Enforcement Administration (DEA) rather than the U.S. Department of Agriculture (USDA).

Hemp and Marijuana

The confusion between industrial hemp and marijuana is based on the visual similarities of widely differentiated varieties of plants. By definition, industrial hemp is high in fiber and low in active tetrahydrocannabinol (THC), the psychoactive ingredient in marijuana that makes some cannabis varieties a valued drug. Canada and the European Union maintain this distinction by strictly regulating the THC levels of industrial hemp, requiring it to be less than 0.3 percent, compared to THC levels of between 3 to 30 percent in marijuana.*

Though smoking industrial hemp would result in no psychological effects, THC could be extracted by means of solvent extraction using butane other solvents. This process produces a more concentrated source of TCH and a more “intense” high. Even so the process can be quite dangerous due to the often flammable nature of the solvents. Using industrial hemp for the production of hash oil would be highly inefficient and time consuming.

Most pro-hemp initiatives in the United States are now focused on defining and distinguishing between industrial hemp and marijuana. Some pro-hemp supporters would like to move the control of U.S. hemp production from the DEA to the USDA. Proponents of legalizing hemp also argue that new technology to distinguish THC levels both in the field and from the air will allow for adequate production enforcement.

Value-added Uses

Hemp is a crop that can be grown for food and non-food purposes. As a result of its numerous nutritional benefits, many new food products containing hemp seed and its oil are finding their way into the marketplace, including pasta, tortilla chips, salad dressings, snack products and frozen desserts. Non-dairy hemp "milk" beverages, which provide significant amounts of omega 3 essential fatty acids (EFAs) and protein, are also available. Hemp oil is also used in nutraceuticals and health care products.

As a fiber source, hemp is undergoing rapid growth as a natural fiber in everything from clothing and textiles to automotive composites. The fiber is also gaining popularity as insulation.

The combined retail value of hemp food and body care products sold in the United States in 2010 was $40.5 million, up more than 10 percent from 2009, according to the market research firm SPINS. (The same firm estimated that 2009 sales of hemp products reached $36.6 million.)

The Hemp Industries Association (HIA) estimated that the retail value of North American hemp food, vitamin and body care products was in the range of $156 to $171 million in 2012. When clothing, auto parts, building materials and other non-food or body care products are included, the HIA estimates that the total retail value of U.S. hemp products is about $500 million.

Hemp Seed

Hemp seeds can be used directly as a food ingredient or crushed for oil and meal. The seed is also used in bird seed mixtures. Canada is the main supplier of hemp seed products to the United States.

Whole hemp seed is composed of approximately 45 percent oil, 35 percent protein and 10 percent carbohydrates and fiber. According to Agriculture and Agri-Food Canada, hemp seed (and its byproducts) can be used to supplement diets poor in EFAs to maintain good health. Hemp is one of only two plants that contain both EFAs as well as gamma linolenic acid (GLA). GLA has been found to have many properties ranging from anti-inflammatory to anti-depression.

Hemp Fiber

Hemp "bast," the outer surface of the hemp stalk, has the longest fibers and is used for textiles. Hemp "hurds," the inner woody portion of the stalk, have shorter fibers that are extremely absorbent, thus making excellent animal bedding. Special machinery is required to separate the more valuable outer hemp fibers from the inner fibers.

Some of the most common products made from hemp fiber are cigarette paper, bank notes, technical filters and hygiene products. Similar uses include art papers and tea bags. Other important hemp products are plastic composites for cars and thermal insulation. Several of these uses take advantage of hemp’s high tear and wet strength.

Well-known European companies, such as Mercedes-Benz and BMW, now use hemp for car interiors, including door panels and dashboards. U.S. auto industry suppliers are following the European example and have started to use hemp to make stronger, lighter and relatively less-expensive composite panels.

China is the source of most hemp fiber for the U.S. hemp clothing industry, cultivating more than 150,000 acres of hemp and looking to expand that to well over 1 million acres.

Hemp Seed Oil

One of the fastest growing markets for hemp seed oil is health care products. The significant amounts of EFA in hemp oil makes it an ideal topical ingredient in lotions, lip balms, conditioners, shampoos, soaps and shaving products. Hemp oil can also be used as cooking oil and in salad dressings, spreads and dips.

Hemp seed contains 30 percent of its weight in EFA-rich oil, providing an ideal combination of omega 3 and omega 6 for long-term use. As a healthier alternative to oils containing more saturated fats hemp seed oil may have potential health benefits for diabetes, cancer, lupus, asthma, rheumatoid arthritis, depression and hypertension.


Cultivated industrial hemp plants usually consist of a spindly main stalk covered with leaves. Considered a low-maintenance crop, hemp plants typically reach between 6 to 15 feet in height. Depending on the purpose, variety and climatic conditions, the period between planting and harvesting ranges from 70 to 140 days. One acre of hemp can yield an average of 700 pounds of grain, which in turn can be pressed into about 22 gallons of oil and 530 pounds of meal. The same acre will also produce an average of 5,300 pounds of straw, which can be transformed into approximately 1,300 pounds of fiber.

Experts indicate that production costs can be lowered by cultivating hemp as a dual-purpose crop, using both the grain and fiber of each plant. Of the 27 varieties legally authorized for cultivation in Canada in 2007, certain varieties were best suited for fiber production, others produced significant amounts of grain and some produced a dual harvest of grain and fiber.

Industrial hemp may be an excellent rotation crop for traditional crops, because it suppresses weeds and decreases outbreaks of insect and disease problems. Hemp may also rebuild and condition soils by replacing organic matter and providing aeration through its extensive root system.

U.S. Status of Hemp Production

In 2002, Hawaii became the first state to reopen licensing for research production of hemp under strict regulatory oversight. Since then, 23 states have conducted dialogues at the legislative level that may pave the way for eventual reintroduction of hemp production. Of those states, 14 have passed a policy resolution to further advance the issue. Eight additional states have joined Hawaii in reducing the barriers to production of hemp at research levels. Nationally, legislative efforts continue in hopes of changing federal policies restricting the industrial hemp industry.


The domestic hemp industry continues to import hemp seed, hemp oil and hemp fiber for numerous products. These products can all be legally traded in the United States. Most industrial hemp used in U.S. products is imported from Canada. Available trade statistics indicate the value of products labeled “hemp”, mostly seeds and fibers, imported into the United States was nearly $11.5 million in 2011. The import value of these base hemp items has more than double since 2007 when the value was $4.8 million.

Such hemp food manufacturers as French Meadow Bakery, Hempzels, Living Harvest, Manitoba Harvest, Nature's Path, Nutiva and Ruth's Hemp Foods make their products with Canadian hemp. Other U.S. companies that make or sell products made with hemp include Dr. Bronner's Magic Soaps, a California company that spends more than $100,000 a year to import hemp oil from Canada, and FlexForm Technologies, an Indiana company that manufactures natural fiber materials for cars. Source: FAOSTAT, http://faostat.fao.org/site/567/default.aspx#ancor.

Canadian Status of Hemp Production

Canada legalized the production of industrial hemp in the late 1990s. The government has supported the country’s re-emerging hemp industry through changes in legislation and regulations, and through market development funding.

Canada has allowed the commercial production of industrial hemp for seed and for fiber since 1998. Permits are required, and there are strict guidelines as to who can grow the crop and what varieties they can grow.

More than 100 Canadian farmers are currently taking advantage of the market for hemp and are growing the crop (Agriculture & Agri-Food Canada). The provinces of Alberta, Manitoba and Saskatchewan are the leading producers of industrial hemp, having licensed the most acreage for hemp production. According to the Canadian Hemp Trade Alliance (CHTA), the trade association representing the Canadian hemp industry, Canadian farmers planted nearly 39,000 acres (15,720 hectares) of hemp in 2011. Canadian farmers are reporting net profits of $200 to $250 per acre.

Detailed market information for hemp seed isn't readily available. One report compiled by Alberta Agriculture and Rural Development estimates gross revenue for Canadian hemp seed production at between $30.75 million and $34 million.

In 2010, exports of Canadian hemp seed and hemp products were valued at more than $10 million. Most Canadian hemp exports go to the United States.

World Status of Hemp Production

Worldwide research and development has sparked an increase in new, innovative uses for hemp. In contrast to the United States, over 30 countries have continued to grow and process industrial hemp. World leaders of hemp production include Canada, Germany, England and France.

The European Industrial Hemp Association (EIHA), which has seven processor members, says between 15 to 20 companies in the European Union (EU) and between 5 to 10 companies in Eastern Europe process hemp. The EIHA reported hemp production on 37,065 acres in 2009, producing an estimated 24,000 metric tons of fiber.

In Eastern Europe, the traditional hemp-producing countries (Hungary, Poland and Romania) are struggling to upgrade their traditional hemp farming and processing methods and to establish modern facilities. Hungary produces twine and pressboard, while Romania is the primary European supplier of hemp yarn and fabric.  (EIHA)


Canadian Hemp Trade Alliance (CHTA).

European Industrial Hemp Association (EIHA).

Hemp: A New Crop with New Uses for North America, Ernest Small and David Marcus, 2002.

Hemp as an Agricultural Commodity, Congressional Research Service, 2013.

Hemp Industries Association - Association working to change regulations and policies prohibiting the use of hemp for commercial purposes.

Industrial Hemp, Agriculture and Agri-Food Canada, Ontario, Canada.

Industrial Hemp Production in Canada, Alberta Agriculture and Rural Development, 2012.

Industrial Hemp Statistics, Statistics Canada, Agriculture and Agri-Food Canada, 2008.



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