August 10, 2022 7:35 AM

After Canada, U.S. markets swing to industrial hemp with the signing of the 2018 Farm Bill

USA legalizes industrial hemp markets right after Canada’s full legislation, so expect wheeling, dealing, acquisitions and alliances for 2019.

/ Published 4 years ago

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A commodity that has made millions for high-level criminals in the U.S and around the world has now become a legal commodity in America thanks to the 2018 Farm Bill which has officially made cannabis, particularly industrial hemp, legal to be grown.

This brings the U.S. possibly closer to the cannabis status of Canada, which earlier legalized recreational cannabis. Industrial hemp fell somewhat in between depending on the market and the grower. As of December 2018 in the U.S., industrial hemp became fully legal on a federal level. Medical cannabis in the USA became legalized in many states, but it does not have national legalization at Federal level.


A market for cannabis legally has existed in the USA for some time at a market value of about $800 million in 2017. The Farm Bill 2014 allowed pilot programs under the guidance of the USDA  of growing hemp in the USA which proved successful. Predictions list a possible growth to US$20 billion. It offers an economic tool against the War on Illegal Drugs since black markets have devastated rural economies and small towns who lacked job opportunities for its younger population.

Legalization legitimizes hemp companies who have stayed under the limelight due to the vast media attention on recreational cannabis’s legalization in Canada.  It also offers another step to fully legalizing cannabis as Canada did at a national level.


Industrial hemp (listed as cannabis plants with only 0.3 percent THC) will now move under the jurisdiction of the United States Agricultural Department (USDA). Industrial hemp cannot be used for medical purposes though it comes from the same plant. Industrial hemp requirements mean growers provide a legal description of land where the hemp will be grown and growers must obtain a license and authorization in their state. Cannabis sativa L. will have delta-9 tetrahydrocannabinol concentration of only 0.3 percent dry weight.

Growers can now more easily obtain loans and financing for their crops. Farmers can now Federally insure their hemp crop against natural disasters or diseases, making it a less risky venture. Many farmers have inferred that growing hemp requires similar farming practices as growing tobacco. When investing, investors need to check on licenses and check how the cannabis will be transported.

Industrial hemp has less psychoactive ingredients making it ideal for more uses. (Photo by Martin Abegglen. CC BY-SA 2.0)

Other considerations

With a USA state patchwork on legalization, any cannabis not defined well can end up in a network of commercial violations. Know that Canada and USA cannabis companies have been making deals. When legislatures legalized recreational cannabis in Canada, it offered a boost to their growing industrial hemp enterprises. As USA and Canada both ramp up industrial hemp production, investors need to look out for oversupply areas. Markets will have to grow to accommodate all the new influx of hemp, which also translate to research and development to gear up and create those markets. The U.S. Food and Drug Administration (FDA) still highly regulates any cannabis placed in food or drink except hemp seeds.

Hemp companies to watch

With the passage of the Farm Bill 2018, here are some companies to watch out for that are expected to dominate the hemp market:

Marijuana Company of America Inc. (MCOA)

Around since 2009, it has experience in dealing with legislative shifts then readapting the business model to accommodate new laws. The company has developed a network of presence so it becomes more than a state by state business venture. The business model developed around industrial hemp has a global aspect vertically integrated with distribution platforms in place. It creates a diverse portfolio of synergistic business segments including its patent-pending process for hempSMART and its product line hempSMART Brain and hempSMART Drops.

Naturally Splendid Enterprise (TSXV: NSP)

A vertically integrated biotechnology firm, it develops sustainable and environmentally positive processes and practices. It has a portfolio of patents along with the proprietary intellectual property and one of its branches specialized in industrial hemp products. It also develops food products, pet care, and cosmetics and has a global distribution network.


The company creates pet-based food products, veterinary supplies, consumer products, and bulk items based on hemp. It has made an alliance with Aurora Cannabis which has phased in buying HempCo stock till it has become the major owner. Research and development remain a key part of the company. Its tri-crop strategy of hemp nutraceuticals, hemp fiber, and hemp food has propelled it to its present status. Predictions have become it will be the major player in North American hemp markets.

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