I was hopeful for this market. I expect it will normalize over time. The key will be whether or not there is an uptick in other uses for hemp beyond consumable products. Hemp can be used for rope, cloth, etc., but it will need to be more than a novelty product to be a sustainable product.
Farmers and manufacturers who wanted to capitalize on the frenzy around CBD, which comes from hemp, were lured into the industry after Congress passed the 2018 farm bill. It legalized cultivation of the crop, a low-potency sibling of marijuana. Hemp acreage in the U.S. more than tripled from 2018 to 2019. McConnell was a driving force behind legalization.
“It was a mad rush,” said Colorado Agriculture Commissioner Kate Greenberg.
But the boom has quickly turned into a bust.
In recent months, several CBD businesses declared bankruptcy — including GenCanna, a hemp processing facility in Winchester, Ky., that McConnell visited in April of last year.
But his hope has so far failed to materialize as the industry struggles on several fronts: The gold rush mentality led to an oversupply, tanking wholesale prices. CBD remains unregulated by the FDA. Consumers are left with conflicting messages about the legality of hemp products while unscrupulous businesses tout CBD as a potential treatment for every illness under the sun, including the coronavirus.
States have written their own jumble of rules to contain the mess. The decline in investor interest in the cannabis sector last year led to financial troubles for businesses focused on expansion over profitability.
“We had really a perfect storm,” Minnesota hemp farmer John Strohfus said. “We had oversupply … and then we had the unfortunate issue of impotence really on the part of the FDA.”