Hemp as an Agricultural Commodity

Hemp as an Agricultural Commodity

For centuries, industrial hemp (plant species Cannabis Sativa) has been a source of fiber and

oilseed used worldwide to produce a variety of industrial and consumer products. Currently, more

than 30 nations grow industrial hemp as an agricultural commodity, which is sold on the world

market. In the United States, however, production is strictly controlled under existing drug

enforcement laws. There is no known commercial domestic production and the U.S. market

depends on imports.


Industrial hemp is a variety of Cannabis sativa and is of the same plant species as marijuana.

However, hemp is genetically different and distinguished by its use and chemical makeup. Hemp

has long been cultivated for non-drug use in the production of industrial and other goods. Some

estimate that the global market for hemp consists of more than 25,000 products. It can be grown

as a fiber, seed, or other dual-purpose crop. Hemp fibers are used in a wide range of products,

including fabrics and textiles, yarns and raw or processed spun fibers, paper, carpeting, home

furnishings, construction and insulation materials, auto parts, and composites. The interior stalk

(hurd) is used in various applications such as animal bedding, raw material inputs, low-quality

papers, and composites. Hemp seed and oilcake are used in a range of foods and beverages, and

can be an alternative food protein source. Oil from the crushed hemp seed is an ingredient in a

range of body-care products and also nutritional supplements. Hemp seed is also used for

industrial oils, cosmetics and personal care, and pharmaceuticals, among other composites.

Precise data are not available on the size of the U.S. market for hemp-based products. Current

industry estimates report that U.S. retail sales of all hemp-based products may be nearly $500

million per year. Because there is no commercial industrial hemp production in the United States,

the U.S. market is largely dependent on imports, both as finished hemp-containing products and

as ingredients for use in further processing. Under the current U.S. drug policy, all cannabis

varieties, including hemp, are considered Schedule I controlled substances under the Controlled

Substances Act (CSA, 21 U.S.C. §§801 et seq.; Title 21 CFR Part 1308.11). As such, while there

are legitimate industrial uses, these are controlled and regulated by the U.S. Drug Enforcement

Administration (DEA). Strictly speaking, the CSA does not make growing hemp illegal; rather, it

places strict controls on its production and enforces standards governing the security conditions

under which the crop must be grown, making it illegal to grow without a DEA permit. Currently,

cannabis varieties may be legitimately grown for research purposes only. Among the concerns

over changing current policies is how to allow for hemp production without undermining the

agency’s drug enforcement efforts and regulation of the production and distribution of marijuana.

In the early 1990s a sustained resurgence of interest in allowing commercial cultivation of

industrial hemp began in the United States. Several states have conducted economic or market

studies, and have initiated or passed legislation to expand state-level resources and production.

Several states have legalized the cultivation and research of industrial hemp, including Colorado,

Hawaii, Kentucky, Maine, Maryland, Montana, North Dakota, Oregon, Vermont, Washington,

and West Virginia. However, because federal law still prohibits cultivation, a grower still must get

permission from the DEA in order to grow hemp, or face the possibility of federal charges or

property confiscation, despite having a state-issued permit.


The 113thCongress considered certain changes to U.S. policies regarding industrial hemp during

the 2013 farm bill debate. The House-passed version of the farm bill (H.R. 2642, Section 6605)

would allow certain research institutions to grow industrial hemp, if allowed under state laws

where the institution is located. Similar provisions were not included in the Senate-passed farm

bill (S. 947). Other introduced legislation, such as the Industrial Hemp Farming Act of 2013 (H.R.

525; S. 359), could allow for possible commercial cultivation of industrial hemp in the United

States. Those bills would amend the CSA to specify that the term “marijuana” does not include

industrial hemp, which the bill would define based on its content of delta-9 tetrahydrocannabinol

(THC), marijuana’s primary psychoactive chemical. Such a change could remove low-THC hemp

from being covered by the CSA as a controlled substance and subject to DEA regulation.

Source and further reading: http://www.fas.org/sgp/crs/misc/RL32725.pdf

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