More than three quarters of a century ago, in 1942, the U.S. government declared the importance of “Hemp for Victory” in World War II. This was despite hemp’s prohibition in the U.S. in 1937.
Now, as a new hemp industry establishes itself in the 21st century, Kevin Latner of the National Industrial Hemp Council (NIHC) weighs modern positives and negatives as he analyzes a whole new, developing hemp trade network.
“It’s an exciting time for the hemp industry. It's also a challenging time for the hemp industry,” Latner, NIHC’s vice president for trade and marketing, tells Hemp Grower. Demand for hemp is high, and hemp’s uses are numerous. On the other side of that coin, many people outside of the industry don’t know how it’s different from cannabis or its storied history, Latner says, and numerous challenges remain getting U.S. hemp into the hands of customers today.
On July 2, the NIHC released a report that Latner wrote, documenting recent industry development, including U.S. export numbers and predictions for U.S. production of the crop.
The amount of acreage dedicated to cultivated hemp decreased between 2019 and 2020, but over the same period, the number of licensed growers increased from 16,877 to more than 21,000, the report states, citing data from NIHC Chief Economist Beau Whitney of Whitney Economics.
Between 2019 and 2020, U.S. exports of hemp and hemp-derived products increased from about $310 million to $1.8 billion, the report states. Looking ahead to 2026, U.S. exports of industrial hemp products are forecasted to increase to more than $21 billion.
On a global scale, “trade in industrial hemp and hemp-based products was over $8.1 billion in 2020 and is forecast to be more than $65 billion by 2026,” the report states.
“In commerce, there's a whole range of pieces that have to be in place to facilitate trade,” Latner says. “Because it's a new commodity in terms of trade, we're working to open those things up.”
NIHC Works to Open Exports
“NIHC has worked to build bridges within the hemp industry to work with registered member-driven organizations to ensure that the entire hemp industry, and industry supply chain, is represented in international trade,” the report says. Among these organizations are, on a national level, the U.S. Hemp Growers Association, Hemp Industries Association, the Hemp Feed Coalition, Hemp History Week and Vote Hemp, as well as regional and state associations.
Latner writes in the report that the U.S. Food and Drug Administration’s (FDA) “delayed guidance” on cannabidiol (CBD) is one challenge that plays into challenges with exporting hemp.
In 2020 and again in 2021, following the inauguration of U.S. President Joe Biden, NIHC participated in listening sessions with the FDA’s CBD Working Group, consisting of stakeholders in hemp supplements, cosmetics, animal feed and other industry segments, NIHC spokesperson Larry Farnsworth tells Hemp Grower.
NIHC also works with Democrats and Republicans in the U.S. Congress and has ties to the U.S. Department of Agriculture (USDA), Farnsworth says. NIHC Board Chairman Patrick Atagi joined the USDA's Agricultural Technical Advisory Committee on Tobacco, Cotton and Peanuts, which Farnsworth says voted to add "hemp" to its name. Latner sits on the USDA's Agricultural Technical Advisory Committee on Processed Food Products.
NIHC also partners with the USDA on its Market Access Program, which Farnsworth says “means that USDA will help us cover costs for U.S. business to promote their products overseas.”
“There's a couple of different avenues of how businesses could do that,” Farnsworth says. “One: We can provide access to them to different trade shows, so if you're a particular CBD company or a farmer or something like that and you want to go and you want to try to find people to buy your products, raw materials, whatever it is, we can get you access to trade shows. … The other thing that [the] program allows us to do is…work with the USDA and representatives overseas to go to the negotiating table.”
Eyeing the World Stage
The organization is also exploring government laws and regulations in other countries.
Latner writes in the report that “intra-European trade has exploded, while at the same time, U.S. exporters find a challenging market because of ambiguous import requirements and inconsistent implementation by its member states.”
He further explains to Hemp Grower: “The trade between European Union countries is actually two times the amount of global trade elsewhere in the world. What that tells me is that internally, there's a huge commerce and market for this product. I've been in agriculture for 30 years [and] the U.S. is among the most efficient agriculture producer[s] in the world--we do it not only efficiently, but we also do it sustainably. And if they're not importing from us, that's because there's some reason.”
Next year, Latner says NIHC plans to begin a study to explore disruptions with getting hemp product into certain European nations.
In China, too, there are limits on U.S. export opportunities for hemp, Latner tells Hemp Grower. The country’s National Medical Products Association banned, with concessions, CBD oil and hemp leaf in cosmetics, according to New Frontier Data.
But there are also positive developments on the world stage, Latner writes.
“Regulatory engagement and standards development has had significant impact in the international space where NIHC lead the industry in developing a coordinated response to evolving international standards,” according to the report. “In June 2018, the WHO’s [World Health Organization] Expert Committee on Drug Dependence (ECDD) reviewed industrial [hemp] and CBD's placement under international drug control treaties.
“NIHC worked with the US government to develop positions consistent with deregulating hemp and minimizing treaty restrictions on cannabidiols. In June 2020, the WHO met to adopt standards consistent with NIHC and U.S. government recommendations, providing an opening for increased harmonization and commercialization of industrial hemp.”
NIHC’s report breaks down export statistics for hempseed, fiber and cannabinoid-based product.
Export values for hemp fiber decreased from $8.9 million in 2017 to $2.8 million in 2018, according to the report. “Global trade of industrial hemp for fiber use has increased about 380% annually over the same time-period, but with significant volatility,” Latner writes.
In 2020, U.S. exports of hempseed, hemp meal, hempseed oil, and hemp-derived processed products, such as cannabidiol-based products, surpassed $1.8 billion, according to the report.
“When I think of the supply chain, first, you need to make sure that you've got the technical barriers addressed,” Latner says. “Can you get the proper certificates for exporting? Do you have what you need to be importing? Can it be included in containers? And once you get that through, then you start building that product knowledge, market knowledge, and really, things begin to take off.”