The 2018 Farm Bill was passed on December 11, 2018, and hemp was legalized after decades of prohibition under marijuana laws. It’s estimated that hemp could be a $20 billion industry by 2020.
States, such as Kansas, had already passed their own industrial hemp legislation. With country-wide legalization, the opportunities for hemp and hemp products are taking off.
The first thing many people think of when they think of hemp is CBD oil. The benefits of CBD oil are well documented, from pain relief, to relief for people with epilepsy, and even helping the elderly with Alzheimer’s.
While CBD oil from marijuana has up to 20% THC, the psychoactive compound that gives people a high, hemp oil has only trace amounts of THC, too weak to be psychoactive and in many cases too low to show up on a drug screening. People can get the health benefits of CBD oil without the prohibited drug.
A fraction of the weight of concrete, hempcrete is quickly becoming widely used in construction. Though it can’t be used for foundations, hempcrete walls can reduce the weight of a building, while its insulating properties can keep buildings around 60 degrees Fahrenheit even in colder months. The reduced weight and reduced utility requirements can save both the builder and the tenant a lot of money.
Hemp fiber can be used for clothing. Hemp clothing is more breathable and even anti-microbial. But it’s the cost that makes it attractive. Hemp fiber is cheaper to cultivate and harvest than cotton or wool, and cheaper to produce than synthetic fibers while also having the benefit of not having the negative byproducts of synthetics.
Hemp seeds are known to be an excellent source of nutrition. They are full of protein, unsaturated fats, fiber, and several vitamins and minerals. Since hemp is so easy to grow, it makes it a ready and prevalent food source in a market where meat prices can fluctuate.
Hemp can also be used to make paper. This isn’t just an argument over the environment and deforestation, it’s also a matter of economies of scale. 1 acre of hemp can produce as much paper as 4-10 acres of trees in a 20 year period and hemp only takes 4 months to grow while trees take decades. Hemp paper is also stronger than paper made from trees since it has higher cellulose content.
The Supply Chain
I’ve talked a lot about the benefits of hemp in general in this post. The question is: how does it benefit your supply chain?
In my opinion, the answer is clear.
- Lower cost of growth, harvest, and production
- Greater sustainability over a long period of time
- Reduced weight of materials
- Lower fuel costs in transportation
- Reduced risk due to reliability of the crop
- Can reduce risks of tariffs on some products from outside the U.S.
The Supply Chain Questions You Must Ask
With these benefits, you and your organization have to ask yourself some questions:
- How can we integrate hemp into our offerings?
- What suppliers do we pursue?
- How do we get involved in the supply chain at the source – the farmer?
- When and how do we push our suppliers to integrate hemp into their offerings?
The future is looking bright for hemp in the supply chain.