“There is no better time to get into hemp than today”
-Mike Leago, CEO iHEMPx
The legalization of hemp through the 2018 Farm Bill has changed the farming landscape. Stories of farmers making $50,000+ an acre are becoming more and more common as the rush to capitalize on hemp and its by-products grow throughout the United States. To fully understand the profitability, timing, and effects of this crop, let’s start by examining how the 2018 Farm Bill changed the legal landscape for hemp.
2018 Farm Bill and State to State Adoption
On December 20, 2018 the Agriculture Improvement Act of 2018, or 2018 Farm Bill, was signed into law legalizing hemp and its by-products(1). This has opened the doors for hemp farming, investment, and the growth of the support network surrounding the industry. It will take time to see the full effects, but the basic necessities such as banking, insurance, and protections for interstate commerce now have the legal opportunity to grow with the industry.
While hemp and its byproducts are legal on a federal level, state to state legalities still remain. For the states which have been early adopters through pilot programs or similar, they are now experiencing soaring profitability and high demand for seed. States that are paving the way include Colorado, Oregon, Kentucky, Nevada, and North Carolina.
Hemp profitability currently depends on two main factors:
- Type of hemp being grown
- Reliable paths to market
Since the signing of the 2018 Farm Bill, there are cases of farmers growing CBD for over $200,000 per acre through the sale of raw biomass without having to follow the product downstream. While those figures are on the high-end, current markets are still seeing per-acre profits of $50,000+ for CBD. Compare this to farmers accustomed to making less than $1000 an acre for normal crops and it is clear just how profitable hemp can be.
On the fiber, food, and building materials side, hemp is still profitable but returns are more aligned with normal agricultural operations. In the current market, growing CBD hemp is king as long as farmers can find a path to market.
The Future Of Hemp Profitability
Will the current trends in profitability last for a decade? Five years? Mike Leago of iHEMPx believes prices will fall within a few years. As quoted, the best time to capitalize on hemp is right now. As the global market picks up in production output and overall quality, profitability will drop significantly. However, this does not mean it is too late to get started in hemp farming.
iHEMPx stands ready to serve as a supply chain partner for farmers looking to break into hemp. From seed to market, iHEMPX offers a full range of services and information to help farmers capitalize on this highly profitable crop.