In December 2018, the Trump administration legalized hemp at the federal law by signing the Farm Bill of 2018 or the Agriculture Improvement Act of 2018. The administration legalized growing, transporting, and processing of hemp, which contains less than 0.3% of THC. Despite federal legalization, Idaho hasn’t legalized hemp. However, the state’s House passed the bill, which would allow hemp to be transported through the state with the necessary permission. Also, hemp can’t be unloaded in the state.
However, the situation could change soon. On Tuesday, Magicvalley.com reported that the Senate Health and Welfare Committee of Idaho introduced the bill, which would declassify hemp as a Schedule 1 drug. Representative Dorothy Moon sponsored the bill. She wants the bill to be on par with the Farm Bill. Moon’s bill also includes an emergency clause, which would allow farmers to cultivate hemp this year.
Previously, Idaho’s House passed a similar bill. The bill stalled after the Senate made changes to it. Fred Martin, the Health and Welfare chairman, said that the Senate leadership would decide on which committee will look into it. He expects that the recent federal changes, which prevent states from prohibiting the transportation of hemp, could make it easier to pass the bill.
Speaking about the bill, Moon said, “We want to open opportunities for our farmers and give them an alternative crop and let them do what’s best for their financial situation.”
Hemp industry’s outlook
Apart from medicinal values, hemp has a variety of industrial usages including clothing, food and beverages, paper, and construction. In the health and wellness sector, many hemp-derived CBD products are used to treat ailments like anxiety, pain, dystonia, and Parkinson’s disease.
In July 2019, Brightfield Group said that it expected CBD product sales to reach $5 billion in 2019, which represents growth of 706% year-over-year. The market research company also expects the industry to reach $23.7 billion by 2023. The report stated that tinctures have the largest share in the CBD market, followed by topicals, vape oils, and capsules.
Earlier this month, Nutritional Outlook reported that the House Agriculture Committee chairman, Collin Peterson, introduced the new legislation. The legislation proposes to market hemp-derived CBD products under dietary supplements. The new bill could drive the US CBD business. Read Will the New CBD Bill Boost US Businesses? to learn more.
Charlotte’s Web Holdings (NYSEARCA:CWEB) is one of the prominent players in the US CBD business. The company is expanding its B2B segment and DTC segment to drive its revenue. Read Is Charlotte’s Web Still a Good Buy? to learn more. Last month, Canopy Growth (NYSE:CGC)(TSE:WEED) entered the CBD business with the introduction of its First & Free Brand. Cronos Group (NASDAQ:CRON) and Aurora Cannabis (NYSE:ACB) are also expanding their CBD presence to capture the growing CBD business.
Advantages and threats for farmers
In May 2018, AP News reported that CBD oil extracted from hemp would command thousands of dollars per kilogram. Hemp farmers could earn more $100,000 per acre. However, a Reuters article published in November 2019 reported that there had been a glut of supplies in the market. The excess supplies caused hemp prices to fall. Also, some of the farmers can’t find buyers. Citing Whitney Economics’s July Survey, Reuters reported that 65% of US hemp farmers aren’t getting enough buyers.
The quantity of THC in the hemp is another major risk for farmers. On Tuesday, according to High Times, the report published by Arizona’s Department of Agriculture’s Plant Services Division said that 41% of the hemp plants that they tested contained very high THC levels. Hemp farmers need to conduct the tests to check the THC levels in their products. If the THC levels are higher than 0.3%, they have to destroy the products.