Industrial hemp is a variety of Cannabis Sativa plants grown for industrial purposes. Industrial hemp has a lower level of psychoactive compounds than cannabis THC has. It is used for manufacturing a wide range of products in industries, such as usable fibers, paper, textiles, rope, biodegradable plastics, clothing, paint, insulation, biofuel, animal feed, and food.
Increasing Application of Hemp Seed and Hemp Oil in Food Industry
The demand for hemp is increasing in the food industry owing to its functional properties. Industrial hemp is low in tetrahydrocannabinol (THC) as a result, it doesn’t have strong psychoactive effects, which makes it useful for the food processing industries. It is rich in vitamin E, vitamin B1, vitamin B2, vitamin D, vitamin B6, potassium, magnesium, and calcium. Industrial hemp is also rich in two essential fatty acids, i.e., linoleic (omega 3) and linoleic (omega 6).
Hemp seeds contain enough protein and can be considered as a value addition to vegetarian and vegan diets. Hemp is used as a source of essential fatty acids since it is low in saturated fats and contains no trans-fats. The food items prepared using industrial hemp can be consumed by diabetic patients. The growing demand for functional foods and increasing applications of hemp in food industries is expected to drive the global industrial hemp market. According to the Institute of Food Technologists (IFT), the global functional foods sales were USD 267 billion in 2020. Moreover, naturally healthy foods sales were USD 259 billion in February 2020.
Stringent Regulation on Hemp Use and Cultivation
Although industrial hemp has a lower concentration of THC, its cultivation and use are prohibited in several nations across the globe. The companies who are into the business of hemp and hemp products require compliance with different regulatory guidelines. There are different types of regulations and legalization in various countries for different types of hemp. The legalization is based on usage, production or cultivation, and sales of hemp.
The regulations for hemp production and sales containing CBD and THC remain highly varied from country to country and state to the state leading to complications associated with the trading of hemp and hemp products. For example, in the U.S., various legal policies are taken into consideration, such as certification of seeds, licensure of growers/producers, legal protection of growers, state-wide commission, among others. These difference in the regulation, standards, and legalization of hemp globally is hindering the commodity trade, which is restraining the market growth.
Innovation and Product Development Can be a Good Opportunity for the Market Players
Increasing legalization associated with the production of hemp is influencing market players to develop new products from industrial hemp. The manufacturers of hemp could focus on the products, such as bioplastics, biofuels, and other bio-based products to gain high return rates. Bio-fuels have a significant growth potential in upcoming years as the price of diesel and petrol is increasing. Moreover, the increasing global warming and environmental issues are some factors that are creating demand for bio-fuels.
Hemp seed oil and extracts can be used to produce biofuels and bio-ethanol. Bio-fuels produced by hemp can be used in various diesel-operated vehicles. According to a report published in 2019 by Researchers from the University of Connecticut, hemp biodiesel has a high conversion efficiency of around 97%.
Global Industrial Hemp Market: Segmental Overview
Based on nature, the global industrial hemp market is segmented into organic and conventional. The conventional segment held for the largest share in 2019. However, the organic segment is growing at a fast pace due to the increasing awareness among consumers about organic products and their benefits.
Globally, organic farming is increasing at a fast pace due to the consumer’s inclination towards organic food products. In late 2018, according to Food and Agricultural Organization (FAO), the number of organic producers was around 2.8 million. As of 2018, more than 71 million hectares of land were organically managed, representing a growth of approximately 3% compared to 2017.
Based on product type, the market has been segmented as fiber, seeds, shives, and others. The hemp fiber segment is expected to dominate the market during the analysis period 2020-2029. This is due to the increasing application of hemp fiber in various industries. As it is renewable source material, its application is increasing in the industries, such as agriculture, construction, automotive, furniture, and animal bedding. Furthermore, hemp fiber is extensively used in the textile, paper, and pulp industry owing to its strong and long fibers compared to cotton. Its demand is expected to further increase as it is also being used for the production of bioplastics and biofuels.
Hemp seed is expected to be the fastest-growing product type segment during the forecast period owing to its approval from FDA to use in the food and consumable products. According to FDA, hemp seeds do not contain any psychoactive compound. FDA has approved three food products made by hemp seed in late 2018 in the U.S. Moreover, as hemp seed is rich in vitamin, protein, and omega-3 fatty acid content, its demand is expected to increase in the food and dietary supplements in the near future.
Global Industrial Hemp Market: Regional Overview
North America is expected to dominate the global industrial hemp market. This can be attributed to several tailwind factors such as growing demand for functional foods in the region, increasing permission to cultivate cannabis for industrial, medical, recreational purposes, and increasing demand for cannabis-infused drinks in the region, among others. According to the National Conference of State Legislatures (NCSL), the U.S. has the largest users of hemp in the world and the country has legalized hemp in 36 states and 4 territories for medical use. Moreover, the use of hemp for recreational purposes is also legalized in 15 states and 3 territories as of November 2020. These factors are driving the market growth in the North American region. Moreover, the demand for functional food is also increasing in the region which is further expected to fuel the regional industrial hemp market growth, as per the data provided by the Institute of Food Technologists (IFT), the U.S. functional foods sales reached USD 63 billion in 2020.
Global Industrial Hemp Market: Top Players
Global Industrial Hemp Market: Segmentation
By Product Type
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