Hemp Joins The Consumer “Big Boys”

Fun fact: Henry Ford’s first Model-T was constructed from hemp fibers and built to run on hemp gasoline.

As Ford himself said: “Why use up the forests which were centuries in the making and the mines which required ages to lay down, if we can get the equivalent of forest and mineral products in the annual growth of the hemp fields?”

Growing industrial hemp became illegal in the 1970s when the federal government strengthened the criminal code on marijuana and related products. Hemp got caught up in the “War on Drugs,” but it contains very little of the psychoactive component tetrahydrocannabinol (THC) found in marijuana that makes people high. For decades, hemp has gotten a bum rap.

But these days, hemp is legal (thanks to the 2018 Farm Bill) and corporate America is finally following Mr. Ford’s advice. Hemp is entering the consumer mainstream, in a very big way, which in turn is opening up investment possibilities in the plant.

Coming to a grocery shelf near you…

In a sign of its growing political and economic clout, the hemp industry is included on a key federal committee that’s driven by some of the best-known global names in the food and beverage business.

The U.S. Department of Agriculture and Office of the U.S. Trade Representative have been increasing the number of appointments of hemp industry advocates to a federal trade advisory committee that’s focused on worldwide trade in processed foods.

Now totaling four, these hemp advocates serve alongside representatives from Kraft Heinz (NDSQ: KHC), PepsiCo (NSDQ: PEP), Campbell Soup (NSDQ: CPB), the Brewers Association, the Wine Institute, and the National Association of State Departments of Agriculture.

Among these advisory committee members is Kevin Latner, vice president of marketing for the National Industrial Hemp Council. On the committee, Latner represents hemp farmers, producers and product manufacturers.

The panel is designed to support export marketing by providing input into government policies on trade agreements and foreign import standards. U.S. exports of industrial hemp and hemp products are relatively new, but they’re growing exponentially.

The federal government and the increasingly powerful hemp industry believe it’s important to insert hemp into existing multinational trade agreements.

Billions of dollars are at stake. Before I explain why, let’s first get our terminology straight. Readers sometimes express confusion about the differences between hemp, cannabis and marijuana.

“Cannabis” is a genus of flowering plants that includes the primary species cannabis sativa. Put in simple terms, both hemp and marijuana are strains of the cannabis sativa species.

Cannabis the drug and hemp the industrial product both contain THC, but they are distinct strains with unique chemical compositions and uses.

Hemp is naturally high in cannabidiol (CBD) and low in THC; the reverse is true of cannabis (see infographic).

Hemp is the strongest natural fiber in the world and boasts up to 50,000 uses, many of them in the industrial sector.

Hemp also conveys a multitude of health benefits. The plant is a copious source of omega-3 and omega-6, proteins, and amino acids, nutrients that assist with cardiac function, mood stability, insulin balance, and skin and joint health.

Companies in the consumer foods, health services, and cosmetics industries are increasingly infusing their products with hemp. The plant is quickly becoming a nationwide health fad, with the help of a federal government that once banned it.

According to a report released in February 2024 by the research firm Research and Markets, the global industrial hemp market is expected to grow rapidly in the coming years, reaching $24.9 billion by 2030, with a compound annual growth rate (CAGR) of 21.2% from 2024 to 2030. This is up from $5.7 billion in 2021, and $6.5 billion in 2022.

The U.S. farm bill represented an inflection point. The legalization of the cultivation of hemp is a boon for major agricultural companies but also for the smaller entrepreneurial outfits that are devising new uses for hemp. These research and development efforts are leveraging hemp seed and hemp seed oil for applicability in a wide range of industries.

Hence the involvement on the federal hemp committee of iconic names such as Kraft Heinz, PepsiCo, and Campbell. These brands enjoy durable name recognition and customer loyalty. Their long-term strategic plans are to enhance efficiency, cut costs and expand into new markets. Among those markets is hemp.

We’re witnessing the same dynamic in the marijuana industry. Deep-pocketed consumer brand giants are acquiring marijuana companies to integrate pot edibles and beverages into their vast retail infrastructures.

Many investors ignore hemp and focus on marijuana. That’s a lucky break for the contrarian investor. I’ll be keeping an eye on hemp, as investment opportunities emerge in the industry.

Crypto’s new bull market has started…

I regularly write about the opportunities in cannabis. But today, I want to emphasize the big profits that await you in crypto.

If you think crypto is too dangerous an investment, think again.

Read This Story: Cannabis and Crypto: The “Disruptive Duo”

Consider this fact: the “blue chip” of crypto, Bitcoin (BTC), gained 156% in 2023. BTC and the broader crypto realm have engaged in a roaring bull market this year.

Every portfolio should have some sort of exposure to crypto. But you need to be informed, to make the right choices. Start receiving our FREE e-letter, Crypto Investing Daily. Click here now!

John Persinos is the editorial director of Investing Daily.

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