While enthusiasm around the legal cannabis business continues to build, the hemp industry may be poised for explosive growth as well.
For now, however, public equity investors have relatively few options for hemp compared to the availability of cannabis stocks on the OTC market, such as Canadian companies that trade in Canada and the U.S. and larger companies with some exposure to the booming legal cannabis investors.
More of an agricultural and industrial product, hemp fiber and seeds are used in a wide variety of products; in addition, the plant contains CBD, a cannabinoid that can be extracted. Its use gaining in popularity for its purported health benefits.
Hemp is a close relative of cannabis, but does not contain psychoactive properties that make you feel high. Despite that fact, federal law classifies it under the Controlled Substances Act as a Schedule I drug.
Despite this, 38 states currently have pilot programs in place to grow hemp. Most were set up after Congress included a measure in the 2014 Farm Bill that laid out hemp guidelines for states to follow. Under those guidelines, 11 states produced 9,700 acres of hemp in 2016 and 19 states grew more than 25,000 acres in 2017.