Growth Points and Systemic Problems of the US Hemp Market in 2024
Despite a 40% increase in the total
value of hemp production in the US in 2024, its structure points to instability
and imbalances within the industry itself. The main driver is therapeutically
active flowers used in the unregulated segment of cannabinoid products, while
fiber and grain continue to “slip” due to a lack of processing infrastructure
and sustainable distribution channels.
Total hemp production value by subsector
in 2024; in millions of US dollars
It has become a tradition that the pages of the specialized electronic publication of national hemp growers publish an analysis of data prepared by specialists of the information and analytical platform “Hemp Consulting” obtained from countries that are the main drivers of the development of the global hemp market. For example, in February 2024, we focused on “ Features of modern hemp cultivation in the most highly developed country in the world ”, and in April we discussed the topic “ What do the statistical indicators of hemp cultivation in the USA for 2022-23 indicate? ” Naturally, the data published by the US Department of Agriculture (USDA) on April 17 lead to certain conclusions, which we are ready to share with our esteemed readers and listeners.
According to a national report released by the
USDA, the total value of hemp production in the country has jumped 40% to $445
million in 2024. While the jump may signal renewed momentum in a segment of the
U.S. economy that is still recovering from the spectacular collapse of the
cannabidiol (CBD) market, the underlying story is far less encouraging.
Total U.S. industrial hemp acreage from
2021-2024
Almost all of the market growth is in flowers
grown primarily for the production of unregulated cannabinoid products. Hemp
fiber and grain remain problematic product categories due to falling market
prices and underdeveloped processing infrastructure.
Therapeutic cannabis flowers are the main
driver of market growth
Flower remained the primary financial driver
of the U.S. cannabis industry in 2024. Growers harvested therapeutically active
flower from 4,786 hectares (11,827 acres), up 60% from 2,988 hectares (7,383
acres) in 2023. Compared to the previous year, 20.8 thousand tonnes (159% more
than 8 thousand tonnes) of therapeutically active material entered the market.
Despite the sharp increase in quantity, prices remained resilient, leading the
total market value of flower grown both outdoors and indoors to $415 million,
up 43% from $302 million in 2023.
Average flower yield per acre (0.4 hectares)
also increased to 1,757 kg (compared to 1,088 kg in 2023), reflecting
improvements in plant genetics as well as harvesting practices (availability of
specialized equipment, worker skills, etc.).
56% increase in area of crops cultivated
for fibre production
Farmers harvested the fiber portion of the
hemp plant from 7,630 hectares (18,855 acres) in 2024, up 56% from 4,900
hectares (12,106 acres) in 2023, producing 60.4 million kg of tissue (up 23%
from 49.1 million kg). However, yields in this segment of U.S. hemp production
have fallen sharply to 3,205 kg per acre (down 21% from 4,053 kg in 2023), even
as overall production costs continue to decline.
As a result, the value of hemp fiber
production fell 3% to $11.2 million last year, compared to $11.6 million in
2023. The gap between the increase in quantity and the decline in value shows
the continued weakness in processing capacity and the immaturity of the supply
chain. That is, despite the additional amount of hemp fiber grown, the U.S.
does not currently have sufficient infrastructure to process it.
Minimal growth in hemp seed market
The hempseed market grew modestly in 2024.
Farmers harvested 1,967 hectares (4,863 acres), up 22% from 1,613 hectares
(3,986 acres) in 2023, producing 3.41 million kg of grain, up 10% from 3.11
million kg harvested the previous year. However, yields fell to 702 kg per acre
(down from 779 in 2023), and prices remained unchanged. Despite this, the total
value of the entire market grew 13% to $2.62 million, up from $2.31 million a
year earlier. While not a breakthrough, market experts acknowledge that this is
the right direction for this segment, where the US continues to lag behind
Canadian imports.
Progress of the seed market
The largest market share gain in 2024 was
achieved in the seed segment. Breeding and seed companies harvested 874 ha
(2,160 acres), up 61% from 544 ha (1,344 acres) in 2023, producing 697 MT of
seed, down 7% from 751 MT in 2023 due to a yield decline of 323 kg per acre
from 559. However, despite the yield decline, costs in this segment increased
sharply, with the total seed market value reaching $16.9 million, a whopping
482% increase from $2.91 million in 2023. This trend may indicate a growing
demand for specialized genetics as well as improved performance of cultivated
varieties, indicating a gradual maturation of the market.
Total revenue from all industrial hemp
crops harvested in the United States from 2021-2024
Conclusion : Despite a 40% increase in the total value of US hemp production in 2024, its structure indicates instability and imbalance within the industry itself. The main driver is therapeutically active flowers used in the unregulated cannabinoid segment, while fiber and grain continue to “slip” due to a lack of processing infrastructure and sustainable distribution channels. A particularly alarming signal is the decline in yields in these segments against the backdrop of an increase in crop areas, which indicates suboptimal use of resources. A sharp increase in the cost of the seed segment, despite declining production volumes, demonstrates a potential direction for development - demand for specialized genetics and breeding achievements. However, without an integrated approach to the development of the entire chain - from production to processing and logistics - the further sustainable development of the US hemp industry remains in question.
