According to Markets and Markets, the Industrial hemp market was gauged at around $4.71 billion in 2019.
With projections to blow past $26 billion by 2025, it's time to get familiar with the research and acquainted with the hemp market trends, insights, and recent developments.
The Industrial Hemp Market: An Overview
The 2018 Farm Bill passage opened up the door to the industrial hemp industry as we now know it.
This was when hemp made the jump from a controlled substance to an official agricultural commodity.
So, how can we utilize hemp?
Hemp can be used to make thousands of different products in many other areas of applications, including but not limited to; bioplastics, biofuels, rope, paper, clothing, food, textiles, construction materials, and batteries— to name a few.
As an alternative renewable resource, this makes hemp valuable to both the economy and our environment.
Let's explore the history and future of the market a bit further.
How Has the Hemp Market Evolved?
The 2018 Farm Bill brought on booming cultivation, and the wild CBD craze swept the nation.
New businesses eagerly joined the market, and US farmers got very busy, very fast.
Unfortunately, the mass amount of hemp growth in 2019 led to an oversupply, which, in turn, created a surplus in CBD material.
This surplus was a contributing factor to the 30% price drop in May 2019.
However, it wasn't solely supply and demand that were to blame for this plummet in price.
"On May 15th (2019) a leading merchant service provider, Elavon, stopped processing credit cards for the CBD industry. There was an immediate ripple effect, as 50% of all B2C CBD sales occur online. Product manufacturers lost their ability to process transactions, and online sales stopped."
Today, payment processing is still a high-hurdle for many farmers, manufacturers, wholesalers, and retailers.
These hurdles prove that even though the market is rapidly growing, it can quickly shift by increasing supply or a decrease in demand.
Latest Developments in 2020
As the industry further progresses, consumers are starting to have more questions about the products they're buying.
It's 2020, and the average consumer is more educated and focused on finding better quality items to enjoy. They're paying more attention, they're doing more research, and they're demanding higher standards.
This means that the companies who value quality assurance and professionalism will likely outlast those that are cutting corners and churning out low-grade products.
We're seeing the development of products formulated with higher cannabinoid profiles. Rare cannabinoids are becoming the new topic of conversation and being added to tinctures for a different and fuller effect.
Both consumers and product developers are becoming more familiar with rare cannabinoid extraction and the entourage effect.
Personal care and cosmetic industries are expected to play a larger role in the hemp market as 2020 continues to unfold.
The properties in the plant make it ideal for adding to almost anything concerning health and wellness.
What Can We Expect To See in The Future of Hemp?
One thing to expect from the future hemp industry for sure is more products.
Because of its far-reaching applications and a wide variety of uses, there will be no shortage of products for consumers to find for themselves enamored with.
Face creams, dietary supplements, clothing, hair products, drinks, pet food, protein powder, coffee—you name it, and you'll find it.
Stricter regulation will increase and, along with it, enforcement. The market is saturated with false claims and boatloads of underdeveloped products.
It's only a matter of time before the FDA cracks down on companies operating in these ways.
More information is something consumers can look forward to as research unfolds, and more studies are released. The industry can be a bit overwhelming to a new consumer, and more companies are investing in the output of educational content regarding hemp.
We'll see economic growth continue to happen in our industry and open up job opportunities.
If you've ever considered inserting yourself into the industrial hemp industry, now is the time to stake your claim. The future outlook looks more than promising, and there can never be too many players in the game who are doing things the right way.
The hemp industry needs companies who care about their product and care about their customers. It requires businesses that will operate with integrity and take responsibility for the quality of their products.