The future looks bright for the hemp industry. Thanks to scientific evidence demonstrating the plant’s therapeutic qualities, hemp is emerging as a comeback crop in the United States and across Canada.

A plant that grows with no more than 0.2 percent THC (tetrahydrocannabinol), hemp could earn Canada as much as $6 billion by 2022.

With two out of three Americans favoring cannabis legalization, it is safe to say that the U.S. is also turning a vibrant shade of green. As many as 3,5 million Americans use cannabis for medicinal purposes.

For those who don’t reside in a weed-friendly state, not to worry, because the passage of the Farm Bill this past December means that hemp and hemp-based cannabidiol (CBD) products are now legal.

What is the difference between cannabis and hemp plants?

Unlike cannabis, hemp won’t get you high. It has widespread industrial uses, such as to make insulation, clothing, rope, paper, and biofuel. What’s more, hemp is often times rich in a primary non-psychoactive constituent of the cannabis plant called cannabidiol (CBD). While hemp may contain traces of the mind-altering cannabinoid THC, it won’t be enough to induce any sedative effects. 

The passage of the Farm Bill means that licensed businesses can now cultivate the hemp plant legally. In addition to this, CBD can also be extracted from hemp plants in accordance with the law.

Consequently, the passing of the Farm Bill is acting as a catalyst for the creation, marketing, and distribution of CBD-infused lotions, oils, and edibles. Despite the fact that hemp is now legal, cannabis-derived CBD remains illegal at the federal level.

What is the growth forecast for the U.S. and global hemp industry?

Based on a report recently published by New Frontier Data titled “The Global State of Hemp: 2019 Industry Outlook,” global hemp sales amounted to $3.7 billion last year. By the time we reach 2020, sales are expected to hit $5.7 billion.

China stormed ahead of the rest of the world in 2018 when hemp sales totaled $1.2 billion. The U.S. trailed closely behind at $1 billion, Europe pulled in $980 million, and Central and South America accrued $220 million from hemp sales.

The report from New Frontier Data predicts that U.S. hemp sales will top $2.6 billion by 2022. In the event that this does actually happen, it represents a compound annual growth rate (CAGR) of 27 percent.

Of that amount, a sizeable chunk valued at $1.3 billion will be generated from hemp-derived CBD products.