The Cannabis Industry II: Industrial Hemp Values

This week we are going to continue with our series on the cannabis industry. Last week we spoke about the industry historically with a particular focus on hemp. We are going to continue the series this week by doing a deeper dive on Hemp but before we get into that we want to say a few things about the industry in general. Its chaos. A legit, swirling mass of absolute chaos.

It’s the kind of chaos that drives grown men, strong men, to tears. The risk is insanely high, and the rewards are elusive at best. Even the people who have been in the business for years and years say that it is probably the most difficult industry to work in in the world.

One of our partners here in Europe who has been in the business for almost 10 years compared it to dancing along the edge of a really high cliff.

We are all out there dancing like we don’t have a care in the world. It looks cool and daring from a distance, but the reality is that it’s both terrifying and exhilarating. And no one but no one dares to look down at the rocks below.

But enough of that, you can get PTSD just thinking about it. Let’s get back to the subject at hand, hemp!!

The End of Historical Hemp

So, in the last blog we learned that hemp enjoyed enormous popularity, particularly in Europe and the US colonies. It was used for everything from animal feed and grain to fabric and fiber for clothing, rope and sails. It was essentially a global commodity.

The industrial revolution put paid to that. The invention of the cotton gin made cotton the new fiber of choice. It was easier to spin cotton into fiber than hemp. Hemp continued to be used however for rope, sails and paper until the last commercial hemp fields were planted in Wisconsin in 1957. And that pretty much spelled the end of Commercial Hemp in the US for the next 50 years.

In Europe Hemp grows were limited to France and some countries in the Eastern Bloc.

Industrial Hemp 2.0

The great Hemp reboot did not occur until 2007 when the US granted the first commercial Hemp grow licenses in over 50 years to two farms in North Dakota. Seven years in 2014 later Obama signed the Farm Bill that allowed Hemp to be grown for research purposes. And of course, not to be outdone by his predecessor, number 45 signed the 2018 Farm Bill which legalized Hemp and its Extractions.

So now there is a flourishing Hemp Industry once again, well almost. There is a flourishing, if chaotic CBD industry but the Technical Hemp Industry is still disjointed and progressing in fits and starts. Technical Hemp has a way to go before it regains its former glory as a global economy.

Chain Of Values

So, what’s taking so long? What is the problem? One of the major problems is that everyone wants to grow Hemp because weed is cool, and what a sweet job that is, right? Well, maybe. As anyone who grows Hemp or Cannabis can tell you, at the end of the day they are crops, and like any other crop they come with crop problems. Too much rain, drought, blight, heat, cold, pests, animals, birds, weeds, etc. The list of variables that can destroy any given grow is endless.

But you know, weed, so let’s grow it. So, everyone wanted to grow. But there were very few people who actually wanted to process the Hemp once it had been harvested. A once robustly global value chain had been all but shattered during the 50-year period that the Hemp fields lay fallow. The value chain was virtually non-existent.

A normal value chain connects all of the vested players in the industry, from the seed sellers to farmers, to the processors, to the distributors, to the creators of finished products and to the consumer. Every seller has a buyer along every link in the chain. And there is a comprehensive logistics network to encompasses the chain to ensure everyone gets what they need when they need it. It’s totally awesome to behold and it totally does not exist yet.

Step By Step, Link By Link

So now we are going through the process of connecting the disparate links in the chain. We are connecting the growers to processors, the processors to the manufacturers, and the manufacturers to the producers of finished products. And in the last mile delivering the end product to the consumers. All throughout this chain are the distributors and transporters. Pretty crazy right?

Yes, yes, it’s crazy, you’re amazing for putting this all together, but why is it taking SO long. Well first of all its only been like four years so calm down. But really the major obstacle is the absolutely bonkers patchwork of completely misguided and ill-informed legislation that regulates the industry. I mean it’s totally insane and it is causing a huge amount of chaos and delay in the development of the value chain. Why? Ask the legislators who are all too often the lackeys of the corporations who are still trying to figure out how to capitalize on the industry. Or even worse yet, who are deliberately blocking the development because they don’t need to competition. Sad but true.

The Actual Products

What are the actual finished products that we are talking about here? The list is reaaalllly long. In 1938 Popular Mechanics wrote about how hemp could be used in 25,000 different products. 25,000. That’s a crazy number of products so we are just going to stick to the basics. There are the legacy products, cloth, paper, grain, flour, feed etc. Then there are the fancy modern products including composites, bioplastics, biofuels, hempcrete, hemp insulation etc. Then there is the whole healthcare and bio-food industry for hemp. And that is not even getting into the sustainable elements like phytoremediation, carbon sinking, increasing biodiversity and so on.

I think that real point here is that the Hemp Industry is back, and it is well on its way to becoming a global juggernaut as in the days of yore. But it takes a village and in this case the village is the whole world. If you like what you read here, we definitely encourage you to get involved in the industry because it is awesome, and we can use people like you. Join us.