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Hemp, Big Industries and Upcoming Opportunities

Updated: Oct 1


Hemp production has been commonplace across the world for centuries; however, following World War II, Hemp cultivation all but disappeared. Recently, Hemp has garnered significant support from several industries as a result of its mechanical, chemical and sustainability properties. But what does this mean for big industries? And what are some forward-thinking opportunities?


Hemp, scientifically known as Cannabis sativa, has had an extremely long association with humans and human culture. Once being believed as a “camp follower” during the nomadic, pre-agricultural stages of human development, it is now used primarily as a source of fibre, leaves and seeds for the automotive, construction, pharmaceutical and textile industries (1). 


Hemp cultivation was once a common sight across the world; however, after world war II, commercial Hemp production ceased (2). There has been some renewed interest in this diverse crop in recent years. But, the cultivation of Hemp continually faces significant legal obstacles. This is a result of its close relationship to the marijuana plant (3). 


While the fact that the commercial production of Hemp has been limited as a result of national legislation, this has not deterred substantial interest in Hemp as a sustainable resource for a number of industries (4). This is paving the way for increased Hemp cultivation and production across the globe and is exemplified by the 2015 Congressional Research Service Report in the USA stating that “Hemp is an important agricultural commodity” (5).


Hemp Industries and Opportunities

With this in mind, it is obvious that big industries may face a number of very profitable opportunities with the cultivation and production of Hemp. However, this leaves us with two questions; what is the current state of the Hemp industry across the world? And what are the opportunities for companies?


North America

In North America, Hemp was believed to be introduced in 1606 (6). It was mainly grown for fibre in European settlements in Canada and the USA for several hundred years. However, in 1938, the Canadian Opium and Narcotics Act made the cultivation of Hemp illegal. Mirroring this, in the USA, was the Marihuana Tax Act (1938) which placed the crop under the supervision of the US Treasury Department and the US Drug Enforcement Agency (7). 


Together, these pieces of legislation effectively eliminated Hemp production in North America after World War II. However, in 1934, Canada started issuing licences to allow research on industrial Hemp. This was followed by new regulations permitting the commercial cultivation of Hemp in 1998 (8). 


In Canada today, Hemp can be found in most provinces, with the majority concentrated in Ontario and southern Quebec. Similarly, Hemp can also be found in some USA states, with the high levels of cultivation in the Midwest and the Northeast of the USA (9). 


North American Hemp has a wide variety of uses, with some research claiming as many as 50,000 products contain Hemp. There are only a few Hemp products with the potential to generate significant market; these are fibre, oilseed and pharmaceuticals (10). In particular, Hemp seed production has been relatively successful in Canada, with numerous claims that industrial hemp could transform the economy in a highly beneficial manner. 


While there is good potential for expansion of the Hemp industry in North America, there needs to be more from the government to allow this to happen. Many Hemp crops typically have agronomic, processing/conversion, economic and social issues that prevent them from achieving their full potential. Nonetheless, investigations have shown that even small scale, profitable niche markets for Hemp products could make Hemp an economically viable alternative crop throughout North America (11). 


Hemp is now grown commercially in many countries across the world, however, with the notable exception of the USA. In addition, a variety of imaginative, innovative Hemp products have appeared in the marketplace since 2000 that have helped stimulate this incredibly promising industry (12). 


Europe

Industrial Hemp has been grown in Europe for hundreds of years. From the Middle Ages, through to the end of the sailing ship era, Hemp was an important crop in many European countries, such as the UK, France, The Netherlands, Germany, Spain and Italy. Most of these crops were used in numerous applications, such as the creation of strong fibre for sails, sacks and ropes (13). 


After the decline in Hemp cultivation following World War II, Hemp has made a comeback in the European Union countries. Currently, Hemp is cultivated on 10,000 to 15,000 hectares across Europe. Its rising popularity has been attributed to its unique characteristics, especially its environmental benefits, high yield of natural technical fibres and as a valuable crop for the bio-based economy (14). 


There are approximately more than 20 commercial companies engaged in the primary processing of Hemp in Europe, with these companies having a stake of between 70% to 90% in the total area of Hemp cultivated. Akin to North America, there appear to be three clear markets for the cultivation and production of Hemp fibres, these are in the paper/pulp, construction and automotive industries. Hemp shivs primarily are produced for the construction, and animal bedding industries and Hemp seeds are used in the animal and human pharmaceutical and nutraceutical industries (15).


Nonetheless, despite growing demand from a number of these industries, especially the automotive and construction industries, the Hemp sector in Europe has been suffering from misguided political frameworks. There has been some progress, however, with support to reform the Common Agricultural Policy. This is a timely step in the right direction; however, more needs to be done across a number of Hemp related industries, including bioenergy and biofuels (16).


Looking Forward

During the past five years, biobased plastics and composites have shown double-digit growth every year. Part of this success is the use of Hemp fibre to reinforce plastics, which are now becoming more popular in the automotive industry. In addition, another market for Hemp is of course in biofuels and bioenergy. The strong support of the biofuels and bioenergy industry to use Hemp Fibre and Hemp biomass is ongoing and is a market we should be keeping two eyes on (17).


The Bottom Line 

Hemp, well known across the world as a sustainable and diverse crop, has been making a come-back in recent years due to its sustainability and potential economic benefits. While there has been some policies helping the Hemp industry move forward, more needs to be done by governments to allow this highly multipurpose crop to achieve its full potential. 




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