“I want people to get over the stigma about hemp. These seeds can’t make you high, but they will make you feel good.”

Those words were uttered by Ziggy Marley, Jamaican musician and son of reggae icon Bob Marley. An increasing number of lawmakers in Washington concur with Ziggy.

Bipartisan congressional lawmakers this week filed new legislation to substantially ease regulations on farmers that grow industrial hemp for non-extraction purposes.

The Industrial Hemp Act is a House companion to a Senate version that was introduced in March. The two bills are yet more evidence that the hemp industry in the U.S. is burgeoning. As I explain below, hemp also represents an underappreciated investment opportunity.

Hemp that contains by dry weight no more than 0.3% tetrahydrocannabinol (THC), the psychoactive ingredient in marijuana, was legalized under the landmark 2018 Farm Bill. Regulatory authority for hemp resides with the U.S. Department of Agriculture (USDA).

The House and Senate bills are closely similar. They would create a distinction between “industrial” hemp and “hemp for any purpose” which would cover crops cultivated to extract cannabinoids such as cannabidiol (CBD).

Farmers who cultivate industrial hemp would no longer be subject to law enforcement background checks to participate in the market; neither would they be compelled to meet currently strict sampling and testing standards.

Instead, hemp farmers would simply have to go through an annual visual inspection by USDA agents, where they would need to demonstrate that they’re growing the crop for a purpose covered under the new “industrial hemp” definition.

If the farmers failed the initial visual review, they would be required to produce documentation demonstrating “a clear intent and in-field practices consistent with the designation” of industrial hemp. Only if they refused to do so would USDA officials be required to physically test harvested plant material.

Both the House and Senate versions of the bill are expected to pass, with a reconciled version making it to President Biden’s desk. The White House has indicated that Biden would sign it.

Hemp farmers seek redress…

The move in the House this week came amid widespread complaints from hemp farmers that federal regulations regarding the crop are too onerous. Hemp lobbyists on Capitol Hill have persuaded lawmakers that the industry deserves help from Uncle Sam.

Hemp is a botanical class of cannabis sativa, making it a cousin to marijuana. Hemp is naturally high in CBD and low in THC; the reverse is true of cannabis. People have been using hemp for centuries. Several of the country’s Founding Fathers were hemp growers and enthusiasts.

However, growing industrial hemp became illegal in the 1970s when the federal government toughened the criminal code on marijuana and related products. Hemp got swept up in the Nixon administration’s “War on Drugs,” but it contains only scant amounts of the THC that’s abundantly found in marijuana. For decades, hemp has gotten an undeserved bad reputation.

But these days, hemp is legal, thanks to the 2018 Farm Bill, and corporate America is incorporating the plant within a multitude of everyday consumer products.

Hemp is the strongest natural fiber in the world and boasts up to 50,000 uses, many of them in the industrial sector. Hemp also conveys several food, beverage, health, and personal care applications.

The following infographic depicts the myriad applications of industrial hemp:

Source: Crop Science Society of America

The global industrial hemp market was estimated to be worth $6.8 billion in 2022 and it’s poised to reach $18.1 billion by 2027, for a compound annual growth rate of 21.6% during the forecast period, according to a new report from the research firm Markets and Markets.

Read This Story: Hemp Joins The Consumer “Big Boys”

Cannabis companies are eyeing hemp-related firms for acquisition, as the cannabis industry continues to consolidate. The economic and political trends are clearly in favor of hemp and marijuana, especially the latter.

Marijuana equities have been under pressure lately due to the broader bear market, but first-quarter 2023 operating results for pot-related companies have been generally positive and cash flow has improved throughout the industry. Cannabis investments are poised for a “breakout.”

You can still reap exponential profits by investing in marijuana and its ancillary sectors. That’s why I’ve launched an investment service, Marijuana Profit Alert, to help subscribers find profitable opportunities in the trends I’ve just discussed. To learn more, click here.

John Persinos is the chief investment strategist of Marijuana Profit Alert.

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