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Hemp industry showed signs of growth in 2020 despite contingencies

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Photo: DR | cannareporter

A New Frontier Data reviewed the hemp sector in the United States of America and demonstrates that despite disruptions and the pandemic, 2020 was a landmark year for the growing hemp industry.

In a review published on December 17, entitled “The hemp market in 2020“, several topics of relevance to the industry were analyzed, from consumer behavior to income and price fluctuations of hemp productions.

The explosive growth of the cannabis industry has generated some buzz internationally, with over 90 percent of Americans having heard of CBD (cannabidiol). As consumers become increasingly familiar with hemp derivatives, national consumer goods brands are looking forward to the opportunity to launch or acquire their own brands in 2021.

In Europe and Latin America, the prevalence of CBD was spurred by low prices, caused by the large oversupply of cultivated hemp material in 2020. Since between 40%-60% of 2019 crops were unsold, the excess of biomass sharply reduced prices.

Confusing regulation hinders further advances in the sector

Despite hemp's popularity among consumers, the failure of government agencies to create clear and sensible regulations for hemp products has stifled the industry's growth. At the end of the year, the whirlwinds around legislation, proposed regulations, and the USDA interim final rule created a volatile environment, making business planning virtually impossible and threatening the economic viability of many hemp processors. Still, many companies have high hopes for the year to come, especially from a positive decision by the Federal Drugs Administration (FDA), which under Biden's administration could spur a new cycle of expansion.

Non-CBD hemp applications also grew in 2020. US imports of hemp seed are expected to hit record levels this year, to the tune of $97,7 million, as changing consumer behavior spurred healthy food growth. .

Hemp fiber – and its corresponding industrial applications – has struggled to take off due to the unexpected capital crisis left by the COVID-19 pandemic. However, the hemp fiber industry has laid a foundation for future growth, as some of the first true decortication facilities in the US have opened with the expectation of starting operations in 2021.

As 2020 draws to a close, hemp continues to be an industry with upside potential in economies hit hard by the global pandemic.

There are reasons to be optimistic about the future: the growth in consumer demand for CBD shows no signs of stopping, the increase in demand for plant-based proteins is driving the seed market, and the Biden administration's climate action proposals could catalyze applications. hemp industries. Still, the lessons of 2020 serve as a reminder that industry contingencies cannot always be planned and hemp operators must build businesses that can handle uncertainty and adapt quickly to a rapidly changing business landscape.

Representative image of the US sector in relation to the hemp market, published by New Frontier Data

 

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[Disclaimer: Please note that this text was originally written in Portuguese and is translated into English and other languages ​​using an automatic translator. Some words may differ from the original and typos or errors may occur in other languages.]

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I am one of the directors of CannaReporter, which I founded together with Laura Ramos. I am from the unique Island of Madeira, where I currently reside. While I was in Lisbon at FCUL studying Physical Engineering, I became involved in the national hemp and cannabis scene and participated in several associations, some of which I am still a member of. I follow the global industry and especially legislative advances regarding the different uses of cannabis.

I can be contacted by email at joao.costa@cannareporter.eu

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