The Giant with Unrealized Potential or the Challenges of Modern US Cannabis Growing

The non-drug cannabinoid sector of the American cannabis plant is already reaching $ 2 billion, and in addition to using the therapeutic properties of the plant for medical purposes, other sectors of modern US cannabis growing are rapidly developing, using the healing / therapeutic properties of the plant (grocery, cosmetic, zoo, etc.) .).

Despite the rapid growth of the hemp industry in the most highly developed country in the world, according to American analysts, there is still a huge untapped potential of the plant. That is why it is interesting to analyze our American colleagues aimed at finding problematic points in the US cannabis industry in order to create conditions under which the industry will continue to develop rapidly.

It should be noted that hemp, the ability to work with which was regulated at the end of 2018 at the federal level, is already one of the ten most sought-after crops in the United States. The most famous product at the moment, which is made from hemp in the "abode of democracy" - cannabidiol. The American cannabis cannabis sector is already reaching $ 2 billion in volume, and besides the medicinal uses of the plant's therapeutic properties, other sectors of modern US cannabis growing are rapidly developing using the healing / therapeutic properties of the plant (grocery, cosmetic, zoo, etc.) .). 

According to a number of analysts of the US hemp market, the main problems of American cannabis growing are:

- the crisis of overproduction in certain market segments, primarily in the field of growing hemp flowers (63% of agricultural producers in 2020 announced that they could not find buyers for the hemp raw materials they grow);

- the collapse of wholesale prices for the “green mass” of hemp, which has therapeutic properties (from $ 40-45 in 2018 to $ 2.5 in 2020). The main reason for this kind of collapse was the oversupply (135 million pounds) of hemp leaves and inflorescences, not in demand since 2019; 

- the inexperience of farmers in monetizing the hemp raw materials they grow and the growing competition in this market (the total number of agricultural producers who received permits for growing hemp in 2019 was 16 939, in 2020 this number increased to 22 473 people, which causes an overproduction crisis);

- the lack of regulation of the regulatory framework, in some cases, does not allow the development of entire sectors of modern US cannabis production;

- the absence of an established industry that ensures the processing of hemp products (in 2019, there were 5.33 licensed growers for each license for processing, in 2020 this ratio fell to 3.54. therapeutic effect, to process only a tenth of the grown crop);

- US Drug Enforcement Administration rules set a maximum threshold of 0.3% for manufacturing facilities that specialize in the extraction of therapeutically active elements of hemp;

- Hot Hemp is a problem for 25% of the grown crop, i.e. a significant financial risk factor for agricultural producers;

- unresolved issues related to the use of therapeutically active elements of hemp in food, beverages, cosmetic preparations, various kinds of additives, etc .;

- imperfection of mechanisms to ensure the normal functioning of modern hemp growing in the United States (banking services, crop insurance, etc.).

Commentary of experts of the Association "Ukrainian technical hemp"

According to the data provided by our American colleagues, in 2020 more than 98 thousand hectares (243,232 acres) were planted in the United States with the aim of obtaining therapeutically active hemp flowers, which made it possible to earn an average of $ 3.2 thousand per hectare or $ 1.9 billion. The income of all US cannabis green mass farmers. For comparison, 7.5 thousand hectares (18,561 acres) of sown areas "participated" in grain production, which made it possible to earn about $ 750 per hectare ($ 300 per acre) - about $ 4.5 million in the whole country. 

Unfortunately, in Ukraine at the moment there is no complexity in the formulation of the problems of the country's hemp industry. With the exception of our colleagues from the information and analytical platform Hemp Consulting, not only does no one analyze the national market, but also does not try to formulate the problems that need to be solved in order to make the industry competitive on the international market. The problems of US cannabis growers are mostly akin to those faced by members of the Association, therefore, tracking the mechanisms of their implementation in the most highly developed country in the world provides opportunities for their solution in our country.