It's Time to Diversify Hemp Product Offerings
Hemp has incredible uses beyond CBD and other cannabinoids. It's time for investors to look to the consumer products side of the market instead of just the cannabinoid side of the business.
*The information on this page is for educational and information purposes only and is not legal advice or a legal opinion.
Beyond CBD: Why the Hemp Industry Needs to Diversify its Product Offerings
Immediately following Congress’s passage of the 2018 Farm Bill legalizing hemp at the federal level, the floodgates opened, and companies began producing as many products as they could containing cannabidiol (CBD). Lotions, tinctures, drinks, cookies—if it could be consumed or applied, you could probably find it with CBD.
Even as the FDA started sending enforcement letters warning companies that the claims their CBD products made violated the Food, Drug & Cosmetic Act, the frenzy persisted. Modest market valuations estimate that the CBD oil market will grow to $5.3 billion globally by 2025, while others project market growth over the next five years to reach over $20 billion.
But what the CBD craze has missed is the real potential hemp has beyond the cannabinoids it contains. As the market continues to become oversaturated with CBD-infused products, and as the value of hemp and CBD continues to decline (the cost of CBD isolate dropped 66% between June 2019 and January 2020, and various hemp oils dropped roughly 50% in same period), companies will eventually begin looking elsewhere.
When they do, the hemp plant itself is where they should look next. As a raw material, hemp is underutilized and underappreciated in the scope of goods in which it can be used.
Cannabigerol (CBG) has stimulated interest in the scientific community as being a potential anti-inflammatory and anti-cancer agent. According to an article published in the Handbook of Cannabis and Related Pathologies, CBG shows promise as a “candidate in the development of novel drugs to prevent, control, and treat conditions where pathological inflammatory responses and abnormal cell proliferation represent a threat.”
Other cannabinoids, like the less-psychoactive Delta-8 THC, have experienced a recent increase in popularity. And as long as these cannabinoids come from hemp, there is a strong argument they are legal because they don’t fall within the Controlled Substances Act. Of course, members of the industry are aware of the inherent risks of dealing with cannabinoids, given the fact that their legality could be changed seemingly overnight as was claimed by DEA.
Beyond its cannabinoids, hemp has promise as a plant-of-all-trades, lending different parts of itself to a variety of products and product types. Besides textiles and clothing, rope, paper and fiberboard, hemp can also be used to make more sustainable plastics and construction materials. Hempcrete, for example, is a biocomposite building material that uses the inner parts of the hemp plant, together with a chemical binder, to create a lightweight insulating material similar to cement.
Hemp also has potential as a sustainable source of animal feed. Researchers at Kansas State University recently earned a grant to study the effect of the cannabinoids in hemp in cattle, and Oregon State University recently began to study the effects of feeding hemp to sheep.
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All in all, one of the biggest benefits that hemp has the potential to provide is greater sustainability. Take cotton, for example. By itself, cotton takes around 10,000 liters of water to produce one kilogram of cotton. Hemp, however, requires only 2,700 liters. And that’s not even considering hemp’s faster growing time, greater yield (two to three times as much fiber), and increased crop density. Use of hemp for paper has similar benefits. One acre of hemp, for example, can produce as much paper as two to four acres of trees.
Hemp, of course, does have its limitations, and pure hemp products may not be the ideal solution. But as the CBD market expands and becomes increasingly saturated, business owners should be aware that hemp has much more to offer.