In 1937, the Marijuana Tax Act was passed, taking the first major legislative step towards prohibition for cannabis and... hemp? Many hemp farmers of the time were taken by surprise, after all, hemp was a useful plant for fiber and a valuable commodity, not a drug. Unfortunately, prohibitionists didn't share the same view, and over the years hemp was restricted alongside cannabis, until it was ultimately classified as a Schedule 1 substance like heroin, ecstasy, and methaqualone. The plant that once served as an important part of the American economy would now cost you your freedom if you grew it.

A field of hemp, note the lack of large top buds usually present on cannabis

Now, as legalization sweeps the nation and prohibition is giving way to a new cannabis economy, hemp is booming again. Regulations have relaxed, allowing farmers to grow the crop if it contains less than 0.3% of the psychoactive substance THC. Demand for hemp fiber, oil, and food ingredients has skyrocketed. Additionally, hemp provides a source of the non-psychoactive cannabinoid CBD, which is in huge demand for health products. Overall, hemp is reclaiming it's status as one of the original US cash crops.

Similar to cannabis, the hemp market expansion is facing a lot of resistance. First and foremost is the obvious obstacle of regulation. Hemp needs to be tested to ensure that it doesn't contain more than the legal amount of THC. A failed test can lead to even more tests and possibly the destruction of an entire crop. This can be a huge capital loss, as the licenses required to grow hemp can cost many thousands of dollars and months to obtain through clogged bureaucratic channels.

In some ways, legal hemp is a victim of it's own success. Before hemp legalization, there was a small and effective market to import hemp products to the US. Hemp food additives and fiber could be imported and used at a high tax rate. If someone really needed a hemp product they could go through the annoying process of sourcing it and get it. As soon as hemp was legalized, there was a huge surplus: the market couldn't sustain that much raw material, especially since the CBD market was still relatively new and export was still problematic. As time goes on, the market is adjusting to the new supply and new applications are opening up, however growers still need to have good connections to move their plants.

While hemp doesn't require near as many regulatory hurdles to grow as cannabis, it is also less valuable and operates at a larger economy of scale. This issue is further complicated by the labor and equipment intensive steps involved in hemp processing. The cost of workers and equipment to process a hemp harvest further shrinks the margin of profit for farmers. Unlike other cash crops like corn, hemp does not have external infrastructure like shared processing facilities or harvest services. Farmers have to own and operate all of their own equipment.

Cross pollination of cannabis and hemp crops is another problem. In some areas, local land use rules allow cannabis and hemp crops to grow nearby. This is an issue because the hemp releases pollen which can ruin marijuana crops. In a windy area, hemp can pollinate cannabis over a mile away. Any time a region's politicians start forming a hemp policy, the local cannabis farmers check which way the wind is blowing.

Whichever crop you cultivate, we hope you had a fantastic harvest!

-The OmniCann team

The unmodified image above was created by Aleks under the following license.

Creative Commons — Attribution-ShareAlike 3.0 Unported — CC BY-SA 3.0