U.S. Hemp CBD Legalization


In June 2018, the U.S. Senate passed its 2018 Farm Bill and in December 2018, President Trump signed the bill into law to make hemp legal for the first time since the 1930s. The bill removes hemp from the Controlled Substances Act, effectively legalizing the plant federally and allowing it to be grown, processed, and sold as an agricultural commodity. Individual states will be authorized to draft their own regulations governing hemp cultivation.


In September, 2018, the U.S. Drug Enforcement Administration announced that certain drug products that have been approved by the Food and Drug Administration (FDA) and which contain cannabidiol (CBD) will be considered Schedule V drugs. Specifically, this order places FDA-approved drugs that contain CBD derived from cannabis and no more than 0.1 percent tetrahydrocannabinols in schedule V.

The farm bill completely removes from the drug schedule all hemp plants and derivatives with much higher THC levels, 0.3 percent.

U.S. Hemp Industry

The Hemp Industries Association (HIA) reported total U.S. retail sales of hemp products of nearly $700 million in 2016. HIA claims that U.S. hemp retail sales have increased by about 10% to more than 20% annually since 2011. Much of this growth is attributable to sales of hemp-based body products, supplements, and foods. Combined, these categories accounted for more than two-thirds of the value of U.S. retail sales in 2016.

Hemp Business Journal has also reviewed sales of clothing, auto parts, building materials and various other products, and estimates the total retail value of hemp products sold in the U.S. in 2017 to be at least $820 million, including hemp foods (17%); personal care products (22%); textiles (13%); supplements (5%); hemp derived cannabidiol or CBD products (23%), consumer textiles (13%); industrial applications (18%); and other consumer products such as paper and building materials accounted for the remaining 2% of the market.

Hemp imports to the United States – consisting of hemp seeds and fibers often used as inputs for use in further manufacturing – totaled $67.3 million in 2017, 57% decrease in seed imports from the previous year, and the first half of 2018 puts the import market on pace for a 20% decrease. This downward trend is expected to continue as the U.S. hemp market continues to mature.

Overall hemp acreage reached 78,176 in 2018 recording a tripling of land under hemp from 25,713 in 2017, with the total number of hemp growing states up to 23 from 19 states, according to the American hemp advocacy group Vote Hemp.

The number of acres of hemp licensed totaled over 500,000 in 34 states in 2019. Vote Hemp estimated that about 230,000 acres of hemp were actually planted in 2019 and with a 50% crop loss, yields totaled of 115,000 acres.

The total number of hemp licenses increased from 3,546 in 2018 to 21,496 in 2020 and decreased to 9,711 in 2021. Licensed total hemp acreage reached 465,787 acres for the 2020 production season, with 47 state departments of agriculture reporting numbers to Hemp Industry Daily. U.S. producers registered an estimated 284,793 acres in 2021, while planted area for industrial hemp grown in the open for all utilizations in the United States totaled 54,152 acres.

According to New Frontier Data and considering that 62% of State Departments of Agriculture (84% of the top-25 producing states) reported, 7,542 licenses issued (down 22% from 9,711 in 2021), and 71,508 acres licensed (down 75% from 284,793 in 2021) in 2022. About 28,314 acres were planted (down 48% from 54,152 in 2021) according to the National Hemp Report. PanXchange, a leading benchmark price provider in the U.S. hemp industry, found that hemp floral varieties accounted for about 50% of total planted acreage in 2022, fiber 30%, and grain and seed 20%.

The report from Grand View Research estimated U.S. sales of hemp products at about $1.19 billion in 2019. The National Hemp Report found that the value of hemp production in the U.S. has decreased to $824 million in 2021 and to $238 million in 2022. The sales are projected to reach $5 billion by 2028.

U.S. CBD Market

After the adoption of the 2018 Farm Bill, CBD producers, in particular, will have much greater incentive to use hemp as their main source for CBD.

The U.S. market for CBD products hit $900 million in 2020 – including both hemp and marijuana-derived sources – while the hemp CBD market grew over 37% and has reached an estimated retail value of $530 million compared to $390 million in 2018.

In 2021, the hemp-CBD market showed stability, with primary companies reporting relatively small consecutive shifts in gross revenue, while in 2022, the market value decreased by 21%.

Hemp legalization and new methods of CBD oil extraction with a growing number of various CBD infused products available in mainstream markets will lead to an increase in consumer spending on CBD products. Nielsen Global Connect projects that total sales of hemp-derived CBD consumer products could generate $6.9 billion.

Grand View Research projects that total sales of hemp-derived CBD consumer products will grow at a compound annual growth rate of 20% while hemp-derived CBD is expected to grow at a CAGR of 23.4% post-pandemic owing to increasing demand from the pharmaceutical sector and rising awareness among consumers regarding health.

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