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Agricultural Marketing Resource Center

Industrial Hemp

By Ray Hansen, updated July 2015
 

Introduction

Industrial hemp is from the plant species Cannabis sativa and has been used worldwide to produce a variety of industrial and consumer products. Hemp is a source of fiber and oilseed grown in more than 30 nations. In the United States production is controlled under drug enforcement laws. To produce industrial hemp in the United States the grower must obtain a permit from the Drug Enforcement Agency (DEA).

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.

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.

Marketing

Industrial hemp is marketed a fiber, as a seed, or as a dual-purpose crop. Although detailed market information for hemp ins not readily available, estimates from The Hemp Industries Association (HIA) show that the total retail value of hemp products in the U.S. in 2013 was $581 million. This includes food and body products, clothing, auto parts, building materials, and other products.

Production

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.

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.

Prices

Industrial hemp seed costs up to $1.23/lb. In 2011 prices averaged between $.90 and $1.00.

Financials

Based on most recent production and price averages, the estimated value of hemp per acre is $21,000 from seeds and $12,500 from stalks.

Sources

 
 
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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