Report: Hemp-Derived CBD Sales Surpass Legal Cannabis and Match Craft Beer

I n the absence of comprehensive federal regulations, the U.S. hemp industry has shown remarkable growth and resilience in 2022, surpassing the combined scale of all state cannabis markets and achieving a level of sales comparable to the national craft beer industry. This significant development is highlighted in a recent report by Whitney Economics, a research firm that specializes in economic analysis.

Economic Evolution and Impact: Charting the CBD-Driven Growth in the U.S. Hemp Sector

Detailed Insights from the Whitney Economics Report

• The report, published last week, provides an in-depth examination of the hemp industry’s landscape and evolution since the crop’s federal legalization under the 2018 Farm Bill. This legislation marked a turning point, catalyzing the expansion and diversification of the hemp market in the United States.
• Despite facing a myriad of regulatory challenges, particularly concerning cannabinoid products like CBD, the hemp industry has demonstrated substantial economic growth. The report estimates that in 2022, sales in the hemp sector will reach approximately $28.4 billion. This figure is indicative of both the industry’s resilience and its adaptability in navigating the regulatory environment.

Comparative Analysis with Other Industries

• The scale of the hemp-derived cannabinoid market is particularly striking when compared to the total legal sales of medical and adult-use cannabis in the same year. The report notes that the sales of hemp-derived cannabinoids exceeded the combined sales of all forms of legal cannabis, underscoring the significant market presence of hemp products.
• Furthermore, the hemp industry’s performance is on par with the well-established craft beer sector. According to data from the American Beer Association, the craft beer industry also reported sales totaling $28.4 billion in 2022, a figure that matches the sales generated by hemp-derived cannabis products. This comparison not only illustrates the hemp market’s robustness but also positions it as a significant player in the broader landscape of specialty consumer goods.

Implications and Future Outlook

• The findings of this report may be surprising to some, especially considering that most states in the U.S. have already legalized cannabis in some form. The hemp industry’s ability to compete effectively with both state cannabis markets and the craft beer industry reflects a dynamic and rapidly evolving sector.
• The parallel growth of the hemp industry alongside more traditional and established industries like craft beer highlights the changing consumer preferences and the increasing acceptance of hemp-derived products in mainstream markets.

In summary, the U.S. hemp industry’s performance in 2022, as detailed in the Whitney Economics report, reveals a sector that is not only thriving in a complex regulatory landscape but also competing successfully with established industries. This growth trajectory suggests a promising future for the hemp industry, marked by innovation, expansion, and an increasing role in the national economy.

Hemp’s Rising Tide: Unveiling the Economic Power and Potential of the U.S. Hemp Industry in the Whitney Economics Report

The recent Whitney Economics report presents a comprehensive analysis of the current state and potential of the hemp-derived cannabinoid industry in the United States, revealing its significant impact on the national economy.

Extensive Economic Impact of the Hemp Industry

• According to Whitney Economics, the demand for hemp-derived cannabinoids is currently valued at over $28 billion. This substantial market demand is supporting a workforce of approximately 328,000 individuals, who collectively earn around $13 billion in wages.
• The total economic influence of the hemp-derived cannabinoid sector on the U.S. economy is estimated to exceed $79 billion. These figures, while impressive, are described by the report as conservative. This is because they do not incorporate additional demand and employment generated through secondary channels such as gas stations, grocery stores, and convenience stores, which also distribute these products.

Tax Revenue from Hemp Products

• The report also highlights the significant tax revenue generated from the hemp industry. In 2022, sales tax on hemp products alone contributed an estimated $1.5 billion to state revenues collectively. This figure underscores the considerable financial benefits that the hemp industry brings to state economies across the nation.

Market Dynamics and Legislative Challenges

• Beau Whitley, the author of the report, emphasizes the importance of this data in the context of current legislative trends. State lawmakers and regulators are increasingly moving to ban or restrict certain cannabinoid products, such as delta-8 THC. Whitley points out that these officials often lack comprehensive data on the size of the market and the preferences of consumers, who often favor these products over traditional adult-use and medical cannabis.
• The potential repercussions of such legislative actions include significant labor displacement and an increase in business failures within the industry. Whitley notes the irony in the stance of ‘big cannabis’ companies, which, despite profiting considerably from hemp-derived products, often vilify the broader hemp industry.

Advocacy for the Hemp Distribution Model

• Whitney Economics advocates for a more supportive approach towards the hemp distribution model by the adult-use and medical cannabis markets. The report suggests that adopting a distribution model similar to that of the hemp industry could open up massive opportunities for growers, processors, and manufacturers in the broader cannabis market.
• Additionally, embracing this model could significantly undercut illicit sales by increasing legal access and consumer participation. This approach would not only benefit the industry but also contribute positively to the legal and regulated market landscape.

In conclusion, the Whitney Economics report provides critical insights into the economic significance of the hemp-derived cannabinoid industry in the United States. It highlights the industry’s substantial contribution to employment, state revenues, and the overall economy. The report also draws attention to the potential risks posed by restrictive legislative actions and advocates for a more inclusive and supportive approach towards the hemp industry from the larger cannabis market. This approach, it argues, could lead to significant economic opportunities and a reduction in illicit market activities.

Unlocking Hemp’s Potential: The Need for Federal Regulatory Clarity and Its Economic Implications

The prospective expansion of the hemp industry in the United States could be considerably augmented should federal regulations be implemented to facilitate the marketing of cannabinoid products as dietary supplements or consumable goods. This potential regulatory shift is currently under consideration, as Congressional lawmakers have introduced proposals to establish such frameworks. This initiative arises in the context of the Food and Drug Administration’s (FDA) position, which denotes a lack of unilateral authority to enact these changes.

Comprehensive Analysis of Regulatory Landscapes and Industry Perspectives

• The executive summary of the newly released report delves into the ongoing debate regarding the efficacy of the existing state-by-state regulatory system governing the hemp industry. There is a division of opinion among industry stakeholders. While some contend that state interventions have been instrumental in addressing public safety concerns, others argue that the disparate state regulations may be causing more detriment than benefit.
• The report posits that a more robust federal regulatory framework could be more fitting, considering the substantial size and scale of the industry. Such a framework would facilitate standardization across various stages of the industry, including cultivation, manufacturing, and retail.

Necessity for Comprehensive Data in Policymaking

• To effectively address these regulatory issues, policymakers at all levels require access to reliable and comprehensive data. Until now, there has been a lack of a national assessment that encapsulates the entirety of the hemp-derived cannabinoid industry.
• Whitney Economics has adopted a conservative yet thorough approach to data collection and projection, aiming to provide a foundational set of data. This effort is intended to assist stakeholders in the hemp industry to grasp the current economic activity associated with hemp cannabinoids and to comprehend the potential impacts of policy modifications on the industry’s future.

Methodology and Findings of the Survey

• The survey, forming the basis of the report, was conducted using a statistically significant sample comprising over 800 operators across 45 states. This comprehensive approach ensures the representation and relevance of the findings.
• The report highlights the substantial opportunities awaiting the hemp industry in the U.S. However, it also underscores the prevailing uncertainty driven by the FDA’s current policy stance, which is contributing to increased market risk and investor apprehension. This uncertainty is, in turn, impeding the growth potential of the hemp industry.
• Whitney Economics emphasizes that much of the industry’s growth suppression could be alleviated with clearer policy guidance from the FDA.

In conclusion, the report by Whitney Economics presents an articulate and formal analysis of the current state of the hemp industry in the U.S., emphasizing the need for more definitive regulatory action at the federal level. It highlights the significant economic potential of the industry and the crucial role that clear and cohesive regulatory policies play in realizing this potential.

Amidst the evolving landscape of hemp regulation, a faction of House Democratic lawmakers, known for their pro-business and center-left orientation, is advocating for significant legislative changes in the upcoming Farm Bill. Their proposal aims to streamline the regulatory framework for hemp cultivation by introducing a clear differentiation between two categories of hemp: “industrial” hemp, which is primarily cultivated for products such as fiber, and “hemp for any purpose,” encompassing crops grown for cannabinoid extraction, including CBD.

Focused Discussions and Hearings on Regulatory Gaps

• A recent hearing conducted by a House subcommittee was specifically dedicated to examining the implications of the current absence of definitive rules by the Food and Drug Administration (FDA) regarding hemp. This lack of regulation has created a complex and often challenging environment for industry participants.
• In parallel, bicameral health committees, comprising members from both the House and the Senate, have been actively engaging with experts in the field. Their objective is to gather informed opinions and insights as they deliberate on potential legislative solutions to the regulatory challenges facing the hemp industry.

State-Level Involvement and Recommendations

• The Cannabis Regulators Association (CANNRA), a collective of state cannabis regulators, has also entered the dialogue. They recently dispatched a letter to the leaders of the congressional agriculture committees, articulating their recommendations for the next Farm Bill.
• CANNRA’s letter underscores the necessity to revise the federal definition of hemp. Moreover, it calls for alterations in the regulations surrounding hemp-derived cannabinoids. These recommended changes are aimed at fostering a more coherent and functional regulatory environment, conducive to the growth and sustainability of the hemp industry.

In essence, these concerted efforts by House lawmakers, health committees, and state regulators reflect a growing recognition of the need for a more streamlined and efficient regulatory approach to hemp cultivation at the federal level. Through the upcoming Farm Bill, there is an opportunity to establish a more pragmatic and clear-cut classification of hemp, thereby reducing the regulatory burdens and creating a more favorable landscape for both industrial hemp and cannabinoid-focused hemp cultivation. This approach not only promises to provide clarity and support to the industry but also aligns with broader agricultural and economic development goals.