Hemp hemp has three major markets, fiber, grainand building materials so why does CBD getall the attention?According to the Hemp Industry 2023 Opportunities Report, published by Lets Talk Hemp,in several states, legislation related to limiting the cultivation of plants intended for thecannabinoid markethas resulted in the limiting cultivation of hemp fiber and grain crops.
This has worked against the other markets because the demand for fiber in construction and grain for human and animal consumption grew significantly in 2022, states the 2023 edition of the report, an annual overview presenting key market research, financial coverage, regulatory outlook, and trends that will affect the hemp industry in the year ahead.
Lets Talk Hemp Media is the producer of the largest hemp-centric events in the world, NoCo Hemp Expo and the Southern Hemp Expo. Its latest report explains that cultivation restrictions focusing on cannabinoids have unintended consequences for fiber and grain, setting the supply behind the demand.
While CBD has received the majority of the attention in the media, the fiber, and grain market has experienced successes at both the state and federal levels and is poised for a breakout. Unfortunately, the timing of this increase in market demand coincides with the downward trend in both licensed acreage and investor sentiment. The result is a constraint in supply that is limiting growth, per the report.
Short Supply, Operators Looking Abroad
Although retail demand exists, hemps potential is not yet understood by consumers. Researchers explained that current regulations cause supply shortages increasing the price of raw materials
In consequence, operators are looking to international partners in the European Union and Canada for supply.
While this is good for suppliers, there may not be enough sales to sustain operators in the near term, states the report.
According to the report, U.S. hemp is still a great opportunity for smart, aggressive operators despite all the short-term challenges facing the U.S. hemp industry.
The hemp industry will need help. A significant policy change, a lucky break, and a splashy launch of a non-CBD-related product line may be enough to right the ship. It does not seem likely that the Farm Bill will prove to be the solution, states the report.
In addition, the report highlights that it is Latin America the region with the most immediate potential for opportunistic firms to establish operations.
Favorable regulations in many Latin American countries enable true commercial activities from cultivation to consumer distribution. Countries that have been slow to regulate cannabis, and thus hemp, indicated in 2022 that they would consider policy reforms in the near term, per the report.
Image via El Planteo.