Is the Hemp Industry at Risk?

Worth well over $824 million, is the hemp industry under threat? More importantly, what does this mean for commercial growers and individuals looking to utilise hemp products? As of September 2023, the 2018 Farm Bill expired and currently has not been renewed, launching the industry into a state of limbo. In this article, we take a look at what the expired bill means for US hemp.

What is the 2018 Farm Bill?

So, what is the 2018 Farm Bill, and what is its significance to the hemp industry? After many years of strict cannabis regulations and restrictions, US House Representatives and Senators convened to pass a bill that would remove hemp (low-THC cannabis) and its seeds from the DEA's schedule of controlled substances. Essentially, this would be the first time in almost a century that the US government made clear distinctions between the various kinds of cannabis and the different parts of the plant.

How the Farm Bill shaped the hemp industry

Primarily, the Farm Bill gave farmers the opportunity to diversify their crops, creating new revenue. But the bill doesn't just benefit farmers, as it allows businesses to manufacture hemp-based products such as food, textiles, and medicine without the risk of any potential legal issues. Moreover, the Farm Bill created plenty of opportunities for other industries, such as sustainable fuel options and even using hemp as an alternative to concrete. While these industries have long been active, many companies operated in legal grey areas and used loopholes to circumvent potential issues.

Moreover, consumers have also benefited from the introduction of the Farm Bill, as it has led to more transparent regulations, safety guidelines, and quality standards, which have had an impact on a wide variety of products, from tinctures and CBD gummies to hemp seeds. Simply put, the 2018 Farm Bill laid the groundwork for a commercial industry that's worth well over $824 million as of 2021 (Nseir, 2022).

Why is the hemp industry at risk?

With so much innovation and regulation taking place, why is the hemp industry under threat? The Farm Bill isn't a one-size-fits-all or permanent solution; it must be carefully regulated every five years. However, as of September 2023, the Farm Bill has expired and has yet to be reviewed and renewed. This means that the entire hemp industry is in a state of uncertainty.

The legal framework for cultivating hemp, as well as the sale of hemp-based products, such as CBD, has been thrown into disarray, potentially exposing hemp companies to legal risks. Without proper federal protection, the hemp industry could be left vulnerable to a bevy of legal challenges, especially if they operate in states with stricter cannabis laws.

The future for hemp

If the Farm Bill isn't amended, the knock-on impact on the hemp industry could be catastrophic. Banks and financial institutions may once again become wary about dealing with “cannabis-associated” industries (Kight, 2023). This decision could force companies to operate in cash or use otherwise unregulated and possibly risky financial services.

However, this won't only impact older, established businesses, potentially leading to closure; new companies may be deterred from entering the industry altogether. Lastly, the consumer will undoubtedly suffer. As the driving force behind the hemp industry, without an updated Farm Bill in place, the quality of products may drop and subpar versions may find their way onto the market.

Will we see change soon?

As a multi-million-dollar industry, hemp clearly means big business not only in the US, but worldwide, too, as hemp products are often exported to other countries. Without a Farm Bill, the potential impact on the hemp industry could be devastating, affecting companies and consumers across industries. With this much at stake, will the US House Representatives and Senators continue to drag their feet when it comes to renewing this bill?‌

Adam Parsons

Professional cannabis journalist, copywriter, and author Adam Parsons is a long-time staff member of Zamnesia. Tasked with covering a wide range of topics from CBD to psychedelics and everything in between, Adam creates blog posts, guides, and explores an ever-growing range of products.

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