Struggling American family farms are praising a cash crop worth more than US$45,000 per acre. According to projections by market research firm Brightfield Group, the hemp-derived CBD boom isn’t cropping up nearly as much attention in Canada.
“Hemp is going to be a saving grace for these small U.S. farmers. It really has been a game-changer for hundreds of American farms,” Brightfield managing director Bethany Gomez told Yahoo Finance Canada. “The growth on the Canadian side is much more linear in nature. There is not that dramatic shift that we have seen in the United States over the past year.”
In December 2018, the U.S. federal farm bill removed hemp from a controlled substance classification that lumped it in with heroin. At the same time, CBD, a non-intoxicating cannabis compound that can be extracted from hemp, exploded in popularity as a remedy for everything from sleep disorders in humans to anxiety in dogs.
Gomez sees the legislation as a winning policy helping to reinvigorate an agricultural sector struggling to make up for low commodity prices and lost exports to China. Beijing has used U.S. crops including wheat, soybeans and corn as economic pressure points amid the protracted trade war with Washington. According to Brightfield, China is now the number two hemp producer behind the United States. The buzz-less cannabis relative has yet to factor meaningfully into the spat between the pair of economic giants.
An estimated 285,000 acres of industrial hemp were planted in the U.S. in 2019, up from 78,000 acres in 2018. Brightfield expects about 87 per cent will be used for CBD processing this year.
Canada had 78,000 acres designated for hemp cultivation in 2018, according to the market research firm.
“This is down from nearly 140,000 acres in 2017,” researchers wrote in a recent study. “This decline is likely driven by increased competition from the U.S., China and Eastern Europe.”
They found on a per-acre level, hemp for CBD could yield sales of $45,203, compared to $235 per acre of wheat.
“It’s a very profitable alternative for farmers that are getting squeezed by a lot of other commodities,” Gomez said. “Hemp is a very high-risk, high-reward plant for farmers. That's why it's so attractive for them.”
Beyond the risk of growing a “hot crop” with too much THC, the chief psychoactive ingre