Lifting the Hemp Prohibition

History of Hemp, Part 1: Rethinking Prohibition Propaganda

Few North American agricultural crops can claim a history as fascinating and complex as the history of hemp.

Dating back to 1606 and the first hemp crop planted in North America by New France settler Louis Hebert, this continent’s early relationship with hemp cultivation was…. well…. complicated.

While hemp has played a central role in European civilization for millennia during which it was used for food, shelter, clothing and other basic needs like rope and netting, hemp’s fundamental role on this continent has only recently hit its stride.

The King of England distributed free land -- and free seed-- to early immigrants who moved to Canada and grew hemp. American farmers in the 1770s were required by law to grow hemp in Virginia and other colonies. From hemp sails for trans-Atlantic crossings, to hemp covers on the Conestoga wagons of pioneers, the crop was central to North America’s early colonial history – to the extent that a draft of the US Declaration of Independence was written on hemp paper.

All that changed in 1937 when the Marihuana Tax Act strictly regulated the crop in the US, largely due to the notorious efforts of US anti-cannabis prohibitionist Harry Anslinger, as well as public confusion with other kinds of cannabis, and a strong lobby mounted by the oil, pulp and paper industries of the day, which viewed hemp as an economic threat.

With the passing of the 1937 act, hemp could only be grown through specially-issued government tax stamps, making all possession or transfer without a tax stamp strictly illegal.

Following the US entry into World War 2, 1942 saw the US Department of Agriculture launch a Hemp For Victory campaign to motivate patriotic farmers to grow hemp in support of the war effort. As a result, hundreds of thousands of hemp acres were grown and the industry thrived through the mid-1950s.

Then in the late-50s, post-war demand for hemp decreased and hemp production plummeted. The last commercial hemp fields were planted in 1957 in Wisconsin. In 1970, the Comprehensive Drug Abuse Prevention and Control Act took effect in the US, abolishing the taxation approach of the Marijuana Tax Act, making cultivation of cannabis illegal by setting a zero-tolerance for THC.

Today, as long as the crop contains less than 0.3 percent THC, it’s considered hemp rather than marijuana by US Department of Agriculture, Agriculture and Agri-Food Canada and other government bodies.

As of December 2018, under the Hemp Farming Act of 2018 -- part of the 2018 Farm Bill, hemp is federally legal to grow again in the US. The bill changed hemp from a controlled substance to an agricultural commodity, legalizing hemp federally and making it easier for farmers to get production licenses, loans and federal crop insurance. While some states still consider it illegal to grow hemp, 41 states have begun the process to make hemp cultivation legal at the state level.

With analyst projections of a hemp market worth some $20 billion by 2024, the next chapter in hemp’s North American history will likely attract a lot of attention!

Hemp Study Points to Strong Growth

Study Says CBD Market Could Hit $20 Billion By 2024

 When you consider the enormous breadth of the burgeoning hemp market -- from food and beverage to cosmetics, pharmaceuticals and even building materials – you can see why the future of hemp appears so strong, and why analysts are taking note of its explosive numbers.

Leading cannabis researchers BDS Analytics and Arcview Market Research are among a long list of analysts recently making positive projections – this time pointing to a collective market for CBD sales in the US that will surpass $20 billion by 2024.

 “We’re witnessing CBD maturing from a cannabis sub-category into a full-blown industry of its own,” Roy Bingham, Co-Founder and CEO of BDS Analytics, explained in a news release announcing the report. “Our growth forecast for the CBD market, across all distribution channels, predicts a compound annual growth rate of 49 percent by 2024. This is a great opportunity for all involved, but it means the road ahead will include decisions that need to be informed by the best possible data.”

The BDS Analytics projection represents a modest increase over earlier forecasts from New York-based Cowen & Co, which estimated the market could top $15 billion by 2025.

The BDS Analytics report explains that, as major retailers continue to announce their stocking and private label development of CBD products, BDS expects the majority of CBD product sales will soon occur in general retail stores rather than cannabis dispensaries, as is currently the case. In future, BDS Analytics expects the success of products will be dependent on education and understanding, dosing, and consistent labelling.

BDS Analytics added that CBD is in a unique position compared to other nutraceutical or supplement ingredients for two main reasons:

 1) as an active ingredient in cannabis, CBD has a storied history of health and wellness use, and anecdotal evidence of efficacy, and

 2) CBD is one of the few natural remedies that can claim a scientific basis for at least some of the claims being made about its curative powers.

But sales will continue from other distribution channels. In fact, BDS Analytics is predicting a compound annual growth rate of 49 percent by 2024 across all distribution channels. Also, they expect that the CBD market, combined with THC products, will create a total market of $45 billion for cannabinoids by 2014.

It’s no wonder consumers are fascinated by the perceived benefits of CBD. While BDS Analytics acknowledges consumer penetration for hemp-derived CBD products in the US is still only around 15 percent today, there is substantial consumer interest in Ingestibles (tinctures, pills, beverages, food) and Topicals (creams, balms, salves) formats.

According to Jessica Lukas, Vice President of Consumers Insights at BDS Analytics, CBD sales have exploded in the past several months. But she adds, “there’s still a long way to go when it comes to consumer, retailer, and manufacturer knowledge. Fifty-six percent of adults 21 years old and older don’t know -- or are confused -- about the differences between THC and CBD. That’s why we’re so excited to offer the in-depth data we do, to help guide and inform a new, booming industry.”