The Versatility of Hemp Plants Contributing to Early Market Success in CA

Could hemp wood become the next market revolution in sustainable products? Some assert it could be manufactured as an alternative – perhaps even a superior one – to polymers, fabrics, paper, soy, corn, wood – maybe even motor vehicle components.

Los Angeles hemp business attorneys know it may be something of a misnomer to refer to these uses as revolutionary, as the fibers derived from industrial hemp (one of two forms of the cannabis sativa plant) have been used for many thousands of years by civilizations for production of paper, cloth materials and even fuel. Unlike it’s cousin marijuana, neither hemp nor its derivative CBD contains the psychoactive ingredient tetrahydrocannabinol (THC) known for producing the “high.” That is the primary reason it was removed from the list of narcotics banned per the U.S. Controlled Substances Act, while marijuana remains.

Production of hemp materials has been a mainstay in parts of Europe and China, though in U.S. and many other parts of the world, its use slowed or halted entirely thanks to widespread marijuana prohibition. The current shift is not only due to the “green rush” set off by the 2018 U.S. Farm Bill that legalized industrial hemp, but also by the extreme ecological damage inflicted by polymers and fossil fuels.

Hemp cultivators and manufacturers will need to be cautious as they enter this new domain not only to ensure quality but also compliance with relevant state and federal regulations, including in marketing.

What Makes Hemp Superior to Plastic, Cotton and Wood?

In addition to the fact that hemp measures up in almost every way to the alternatives that replaced during prohibition, many assert it is superior on many fronts. Among those:

• It is a weed. As such, it requires no pesticides and very little space and water to grow – and grow well. That makes it a superior option to trees when it comes to paper and wood products. Plus, the turnaround time is faster for growth is factor. Compared to cotton, it is far less labor intensive to cultivate.
• It is a plant. Unlike the single-use petroleum-based plastic products that have become such a prolific problem in our oceans, it’s biodegradable. Plus, assuming it’s controlled/in check, it’s actually good for the environment because it helps to sequester carbon dioxide, returns soil nutrients and filter rainwater.
• It is efficient. California hemp farmers know that the versatility of hemp is in large part thanks to the fact that no element of it is wasted. Many cultivators supply several companies because each requires a separate part of the plant for their own purpose. For example, the oil extracts can be used to make anything from adhesive material to plastics to paints to cooking. The leaves can be consumed or ground to make juice. The outer fiber of the stalk is used for production of rope and cloth material. The wood-like material on the inside can be used for construction of heartier products – including a wood-like substance.

As such, hemp is gaining growing popularity in environmental advocacy circles and individuals who recognize its success in replacing non-eco-friendly materials.

Although some cannabis businesses in California still see hemp products as novelty, savvy entrepreneurs recognize that consumers are becoming especially conscious of their personal carbon footprint and the global impact of the everyday products they buy and waste produced. In all likelihood, we’re in for a hemp market boom.

Sticky Legal Points for Hemp Producers

Despite U.S. Congressional legalization of hemp and express direction from legislators to state governments and courts not to impede the cultivation, production, sale, possession and interstate transport of local hemp, there continue to be a host of legal concerns.

Areas of specific concern include:

• Use of hemp-derived CBD in food, cosmetic and medical products. Although there may be some movement on this front in the coming months, for now, the U.S. Food and Drug Administration has not approved the use of CBD in food or beverage products. It only expressly allows the use of CBD in restricted contexts, such as Epidiolex, an epilepsy medication. If your hemp-based product falls into one of these categories or is marketed as such, legal guidance is an imperative.
• State-specific CBD and hemp laws. Although hemp and CBD with less than 0.03 percent THC content are legalized at the federal level, the same cannot be said at the state level. Although states have been instructed to update their statutes to conform with the new federal guidelines, some have yet to do so. This has resulted in criminal charges for some hemp industry companies and workers, such as the hemp delivery drivers arrested on drug traffic charges by Idaho state authorities.
• Financial service industries. As recently detailed in a Denver Post article, although hemp is legal to be delivered by U.S. mail in most cases, finding financial service companies (banks, credit card firms, etc.) to process those orders has been very difficult. Many hemp product manufacturers and retail outlets are still only taking cash and local checks. This can present a number of its own problems for taxes/accounting. A Los Angeles hemp business lawyer should be consulted.

Additionally, there are concerns for some companies slated to initiate business in certain sectors where political factors, like the Trump administration’s trade war/tariffs (particularly as it relates to Chinese trade), could have a chilling effect.

Globally, the industrial hemp market is estimated to balloon to a value of $10.6 billion over the next six years.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Hemp-based wood startup ready to enter market despite US-China trade war tariff, June 14, 2019, Marijuana Business Daily