Industrial Hemp: Overview of Opportunities and Risks

October 22, 2019

Key Points

  • Any nascent industry has inherent risks, but regulatory and legal hurdles compound the risks for the hemp industry. However, with big risks can potentially come big rewards. Opportunities and risks should be evaluated case by case.
  • Of the three markets for hemp – fiber, grain/seed, and CBD (cannabidiol) – CBD demand is currently driving hemp’s growth. Though widely available in the marketplace, CBD in food, beverages, and dietary supplements is still federally illegal. The timing and outcome of future FDA regulation will be critical to the long-term CBD demand outlook.
  • Hemp fiber has potential long-term market opportunities; a significant barrier, however, is the lack of processing capacity today. Grain/seed hemp has more stable risks and demand markets than hemp fiber or CBD, but not the growth potential of either.
  • USDA plans to release hemp regulations and guidance in the fall of 2019, in time for the 2020 growing season. The USDA and the FDA regulations will not only be crucial in determining risk and defining the outlook of the hemp industry, but also in setting a path forward for leaders to finance hemp.

Read the Report


Stay ahead of the game in your field. Subscribe today.

Get CoBank's industry-leading Knowledge Exchange research reports delivered straight to your inbox as soon as they're released.

Have a comment or question about these reports?

Contact CoBank's Knowledge Exchange team to ask questions, engage with analysts or receive additional information.