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Quantifying the Economywide Impacts of Industrial Hemp Adoption in the U.S

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  • Osanya, Jessica
  • Reimer, Jeffrey

Abstract

This study analyzes macro-economic aspects of industrial hemp adoption in the U.S. economy with a focus on fiber products. Hemp is currently not economically viable but we analyze potential policies for adoption of hemp using a general equilibrium model. Under a hypothetical three million acres of hemp production, fiber products could be widely integrated as intermediate inputs into production sectors involving fiber, paper, concrete, and building materials. The hemp-producing crops sector would increase in value by approximately four percent and would pull resources from other sectors of the economy. The model predicts that much hemp demand could be met by supply from outside the U.S., so expansion of domestic production is not guaranteed even if domestic demand is strong.

Suggested Citation

  • Osanya, Jessica & Reimer, Jeffrey, 2025. "Quantifying the Economywide Impacts of Industrial Hemp Adoption in the U.S," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 361204, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea25:361204
    DOI: 10.22004/ag.econ.361204
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    2. Jagdish Bhagwati, 1967. "Non-economic Objectives and the Efficiency Properties of Trade," Journal of Political Economy, University of Chicago Press, vol. 75(5), pages 738-738.
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