Hemp Market Saw Growth In 2023 After Major Declines In 2022, USDA Report Shows

The hemp market started to rebound in 2023 after suffering significant losses the prior year, the latest annual industry report from the U.S. Department of Agriculture (USDA) found.

USDA’s National Hemp Report for 2023—which is based on survey data from cannabis farmers who reported on the metrics such as acreage, yield, production, price and value of hemp—shows that industrial hemp value reached $291 million last year, which represents an 18 percent increase from 2022.

Last year’s report showed major industry losses in the value and cultivation of the non-intoxicating cannabis crop across every metric that it analyzed. Stakeholders placed much of the blame on inaction from the Food and Drug Administration (FDA) in regulating CBD.

While the industry’s overall value increased last year, the report shows a mix of economic trends within the market. For example, there were increases in hemp grown for flower grew in yield (up 134 pounds per acre on average) and value (up 35 percent).

By contrast, the average value of hemp grown for grain totaled $2.31 million in 2023, which is down 36 percent from the prior year.

Farmers grew 27,680 acres of industrial hemp in the open last year, which is two percent lower than 2022.

In 2023, the value of hemp production in the open and under protection for the United States totaled $291 million, up 18% from 2022. See more #AgStats in the National Hemp Report ➡️https://t.co/xeuwXqTpDB

— National Agricultural Statistics Service (@usda_nass) April 17, 2024

The data is the result of a survey that USDA mailed to thousands of hemp farmers across the U.S. in January.

The first version of the department’s hemp report was released in early 2022, setting a “benchmark” to compare to as the industry matures.

Bipartisan lawmakers and industry stakeholders have sharply criticized FDA for declining to enact regulations for hemp-derived CBD, which they say is largely responsible for the economic stagnation.

To that end, FDA Commissioner Robert Califf testified before the House Oversight and Accountability Committee last week, where he faced questions about the agency’s position that it needed additional congressional authorization to regulate the non-intoxicating cannabinoid.

Chairman James Comer (R-KY) said at the hearing that FDA is “putting its own bureaucratic priorities over the American people” by refusing to regulate hemp products such as CBD.

Meanwhile, in 2020, USDA announced plans to distribute a separate national survey to gain insights from thousands of hemp businesses that could inform its approach to regulating the industry.

That survey launched in partnership with National Association of State Departments of Agriculture and the University of Kentucky. The department said it wanted to learn about “current production costs, production practices, and marketing practices” for hemp.

Meanwhile, USDA is reportedly revoking hemp licenses for farmers who are simultaneously growing marijuana under state-approved programs, underscoring yet another policy conflict stemming from the ongoing federal prohibition of some forms of the cannabis plant.

Federal hemp rules could be further amended as part of the next iteration of large-scale agriculture legislation. The 2018 Farm Bill that legalized the crop was supposed to get updated last year, but it’s been extended through much of 2024.

Lawmakers and stakeholders are eyeing a number of proposals that could be incorporated, including measures to free up hemp businesses to legally market products like CBD as dietary supplements or in the food supply and to remove restrictions on participation in the industry by people with certain prior drug convictions.

For the time being, the hemp industry continues to face unique regulatory hurdles that stakeholders blame for the crop’s value plummeting in the short years since its legalization. Despite the economic conditions, however, a recent report found that the hemp market in 2022 was larger than all state marijuana markets, and it roughly equaled sales for craft beer nationally.

Meanwhile, internally at USDA, food safety workers are being encouraged to exercise caution and avoid cannabis products, including federally legal CBD, as the agency observes an “uptick” in positive THC tests amid “confusion” as more states enact legalization.

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