After a brutal shake-out that chopped hemp acreage in half in two years, the industry is focusing on hemp as a source of grain and fiber, a less profitable but possibly steadier market than cannabinoid (CBD) oil, used in food, beverages and dietary supplements. Analysts say the unclear regulatory status of CBD has throttled sales.
Growers rushed into industrial hemp following legalization of the crop by the 2018 farm bill, attracted by reports of high revenue from hemp sold for processing into CBD oil. But the pandemic and a glut of hemp crushed wholesale prices.
Licenses were issued for nearly 285,000 acres in 2021, down from as many as 466,000 acres in 2020 and more than 511,000 acres in 2019, when production was the highest ever, reported Hemp Industry Daily last fall.
By law, industrial hemp cannot contain more than 0.3% of the tetrahydrocannabinoil, the psychoactive substance in marijuana.
Based on interest by farmer and processors, two hemp trade groups said last year that they would collaborate on a proposal for a check-off program to pay for research and promotion of industrial hemp.
The USDA operates 21 checkoff programs for commodities ranging from cotton to mangoes.
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