In 2017, 19 states grew hemp in the United States for a total of 25,541 acres of crops. While that’s a significant increase from just one year prior when only 9,770 acres of hemp were grown, the U.S. is still significantly behind in the hemp industry compared to other countries.

Today, hemp is grown in approximately 30 countries. China is the largest hemp producer and exporter in the world and is responsible for an estimated 1/5 of total global hemp production. Other hemp producing countries include Canada, France (the largest producer in the European Union), Spain, Austria, Australia, and Russia. The United States imports approximately $600 million of hemp products each year, but hemp can only be grown in states that have approved pilot or research programs.

Hemp began its resurgence in Europe in the 1980s, and Australia has been growing it for 20 years. It was legalized in Canada in 1998. In comparison, the U.S. only passed the Farm Bill in 2014, which allowed states to launch hemp cultivation programs for research and development only. That means the U.S. is decades behind many other countries and has a lot of catching up to do. Here are a few obstacles the U.S. has to overcome to be competitive in the global hemp market:

1. Regulations

Not only do U.S. laws put hemp on the list of Schedule 1 drugs, but they also restrict interstate commerce, limit product development, and cause prices to increase across the supply chain and for consumers. With only 32 universities currently approved to research hemp, growers have fewer opportunities to develop new varieties to stay competitive with Canada and other countries where this type of research is very advanced.

In addition, U.S. laws require that hemp seeds are imported from other countries like New Zealand and Europe, and those seeds must be certified. Importing raw materials from other countries increases the price to processors. For example, a hempcrete (a concrete-like material made from hemp) manufacturer could pay double or more to another country for the raw materials needed to make its products than it would have to pay to a domestic source.

2. Supply Chain Infrastructure

While countries with established hemp industries have their supply chains in place and have worked out many of the kinks, the U.S. has no such supply chain in place. For many U.S. farmers, growing hemp is easy, but selling it might not be. Farmers need a network to process materials or they can’t be certain they can turn a profit from a hemp crop.

The U.S. hemp market is expected to grow to $1.8 billion by 2020. Supply chain infrastructure needs to be in place to meet growing demand domestically but also for the U.S. to become competitive in the hemp market on a global scale.

3. Equipment

The U.S. hemp market is also impeded by a lack of equipment for cultivators and processors to work efficiently and economically. For example, the equipment needed to harvest hemp for fiber isn’t available in the U.S. yet.

Furthermore, a December 2017 story from Westword.com explained that many U.S. processors don’t have access to a decorticator – the machine needed to separate the outer layer of hemp (the baste) from the inner core (the hurd). At the time, Colorado processors were considering purchasing decorticators from Australia, but until then, tons of bales of hemp sat waiting to be processed.

The Big Question for Hemp in the U.S.

With a late start to the hemp industry and a litany of strict regulations, the question is can the U.S. compete in the hemp market? Is it too late to catch up to China, Canada, France, and other countries with far more experience, looser regulations, established infrastructure, and existing demand?

One thing is certain. The answer to these questions is no if regulations related to hemp cultivation, processing, and sales don’t change. It’s good news that the Industrial Hemp Farming Act is back in Congress, which would make farming hemp legal in the United States and remove hemp from the list of Schedule 1 drugs in the country, but keep in mind, this is the seventh time the bill has gotten to this point.

What do you think? Is it too late for the U.S. to compete in the hemp market? Leave a comment below and share your opinion.

Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC. Today, her clients include household brands like Citigroup, Cox Communications, Intuit, and more as well as small businesses around the world. Susan has written 11 marketing-related books, including the highly popular Content Marketing for Dummies, 30-Minute Social Media Marketing, Kick-ass Copywriting in 10 Easy Steps, The Ultimate Guide to Email Marketing, and she is a popular marketing and branding keynote speaker. She is also a Certified Career Coach and Founder and Editor in Chief of Women on Business, an award-winning blog for business women. Susan holds a B.S. in marketing and an M.B.A in management and strategy.