Hemp production became federally legal at the end of 2018, with 35 states allowing farmers to begin official production in 2019. That year saw over half a million licensed hemp acres. However, several acres of product were placed into storage bins and buildings as the demand for CBD had fallen with more states legalizing medical and recreational cannabis. This left farmers with a lot of leftover product with limited places to store them.

So in 2020, licensed acreage fell to roughly 350,000 acres across 47 states. Farmers began to leave the infant hemp industry because the projected demand and profit didn’t line up with the actual demand. Then again, in 2021, the licenses hemp acreage fell to under 300,000 acres at an estimated 284,793 acres. 

Factors

Experts and farmers speculate on what has driven people away from hemp farming and came up with several factors:

• Uncertainty surrounding federal regulations of CBD – specifically from the FDA
• Immature supply chain
• Risky farming conditions–the west coast saw record heat waves this summer, for example
• Low wholesale prices
• Surplus of leftover flower and biomass from previous seasons 

Next Steps

Many farmers who are looking to stay in the hemp industry could turn towards producing hemp flower to hemp for fiber and grain. 

“We’re seeing the swing from CBD to fiber, and I love the (fiber) applications. I think it has amazing potential, but it’s not here yet,” said Wendy Mosher. She is the CEO of New West Genetics in Fort Collins, Colorado. “With approval for feed, it could be up to 22 million acres, and that’s because it’s such an interesting nutrition profile that’s pulling from canola, it’s pulling from some corn for rotation and also from soy and the smaller flax, sunflower,” she added. 

However, this switch could pose a problem. Producing hemp for flower and cannabinoids takes much less acreage than producing hemp for grain and fiber. With less acreage licensed than ever before, there could be a delay getting licenses back to produce the demand potential of hemp fiber and grain demands. 

For now, farmers can continue doing what they do best, growing hemp. If there is a shift in demand and the hemp industry begins to turn around for farmers, then the industry could see a rebirth while still in its infancy. 

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