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Economic Viability of Industrial Hemp in the United States: A Review of State Pilot Programs

Author

Listed:
  • Mark, Tyler
  • Shepherd, Jonathan
  • Olson, David
  • Snell, William
  • Proper, Susan
  • Thornsbury, Suzanne

Abstract

After a hiatus of almost 45 years, the Agricultural Act of 2014, Public Law 113-79 (the 2014 Farm Bill) reintroduced industrial hemp production in the United States through State pilot programs. U.S. industrial hemp acreage reported by State pilot programs increased from 0 in 2013 to over 90,000 acres in 2018, the largest U.S. hemp acreage since the 146,200 acres grown in 1943. While the U.S. hemp industry grew rapidly and commercial hemp production was legalized again by the 2018 Farm Bill, the industry’s long-term economic viability is uncertain. This study documents outcomes and lessons learned from the State pilot programs and examines legal, agronomic, and economic challenges that may affect the transition from the pilot programs to economically viable commercial production. Competition with alternative crops for acreage, global competitiveness, market transparency, and the ability to manage regulatory and market risks will determine patterns of development in the emerging U.S. hemp industry.

Suggested Citation

  • Mark, Tyler & Shepherd, Jonathan & Olson, David & Snell, William & Proper, Susan & Thornsbury, Suzanne, 2020. "Economic Viability of Industrial Hemp in the United States: A Review of State Pilot Programs," Economic Information Bulletin 302486, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersib:302486
    DOI: 10.22004/ag.econ.302486
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    Cited by:

    1. Obed Quaicoe & Fafanyo Asiseh & Omoanghe S. Isikhuemhen, 2023. "Qualitative Analysis of Industrial Hemp Production, Markets, and Sustainability in North Carolina, United States," Agriculture, MDPI, vol. 13(4), pages 1-19, April.
    2. Martinez, Charley C. & Smith, S. Aaron & Mark, Tyler & Goeringer, Paul, 2022. "Challenges with Developing an Extension Program for Markets Evolving under an Uncertain Framework: Lessons from Program Development for Carbon and Hemp Markets," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 4(3), August.
    3. Waea, 2021. "Western Economics Forum: A Journal of the Western Agricultural Economics Association, v.19, Issue 2, Fall 2021," Western Economics Forum, Western Agricultural Economics Association, vol. 19(2), December.
    4. Mehrab Valizadehderakhshan & Abolghasem Shahbazi & Masoud Kazem-Rostami & Matthew Scott Todd & Arnab Bhowmik & Lijun Wang, 2021. "Extraction of Cannabinoids from Cannabis sativa L. (Hemp)—Review," Agriculture, MDPI, vol. 11(5), pages 1-21, April.
    5. Ebert, Kerri & Hoch, Braden & Taylor, Hannah & Schwab, Benjamin, 2020. "From the Ground Up: A Look at Kansas’ First Year of Industrial Hemp Production," Western Economics Forum, Western Agricultural Economics Association, vol. 18(2), December.
    6. Jane Kolodinsky & Hannah Lacasse & Katherine Gallagher, 2020. "Making Hemp Choices: Evidence from Vermont," Sustainability, MDPI, vol. 12(15), pages 1-15, August.
    7. Haohan Zhao & Heping Xiong & Jikang Chen, 2021. "Regional Comparison and Strategy Recommendations of Industrial Hemp in China Based on a SWOT Analysis," Sustainability, MDPI, vol. 13(11), pages 1-16, June.
    8. Gurinder Kaur & Ronald Kander, 2023. "The Sustainability of Industrial Hemp: A Literature Review of Its Economic, Environmental, and Social Sustainability," Sustainability, MDPI, vol. 15(8), pages 1-15, April.
    9. Jeffrey S. Young & Tanner J. McCarty, 2023. "Adapting network theory for spatial network externalities in agriculture: A case study on hemp cross‐pollination," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(4), pages 1267-1287, August.
    10. Dhoubhadel, Sunil P., 2021. "Challenges, Opportunities, and the Way Forward for the U.S. Hemp Industry," Western Economics Forum, Western Agricultural Economics Association, vol. 19(2), December.
    11. Staples, Aaron J. & Malone, Trey & McFadden, Brandon R., 2022. "CBD and THC: Who Buys It, and Why?," Journal of Food Distribution Research, Food Distribution Research Society, vol. 53(3), November.
    12. GwanSeon Kim & Tyler Mark, 2023. "What factors make consumers in the USA buy hemp products? Evidence from Nielsen consumer panel data," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-19, December.

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