Hemp crop value $824M in US, $62M in California, USDA says

The nation’s first hemp study that quantifies its value and other statistics was released a few weeks ago, showing a crop that’s legal across the North Bay was worth $824 million in 2021.

In its benchmark “2021 Hemp Acreage and Production Survey” (PDF), the U.S. Department of Agriculture estimated hemp’s value for the product grown “out in the open” at $712 million nationwide. The value of the crop grown in greenhouses and under other protective awnings was listed as $112 million, according to the National Agricultural Statistics Service.

The independent arm of the USDA broke down the value of the product sold or harvested for sale in California as $62.2 million, service spokeswoman Alexandra Nseir indicated.

Hemp, which is legal under local ordinances in Sonoma, Solano, Marin, Napa, Mendocino and Lake counties, covers 54,152 acres nationwide, according to the USDA report. Over two-thirds of that acreage is used to harvest for sale.

“There’s a great opportunity for hemp production in the North Bay,” said Stephanie Honig, board president for the Napa Valley Cannabis Association. Honig singled out Mendocino and Sonoma counties as having the greatest propensity for growth as an industry.

“I think hemp is going to replace a lot of materials. And it doesn’t strip the soils, it nourishes it,” she added.

Hemp may be used to make paper, cloth, rope, fabric and building materials. The whole plant can create fuel. Hemp lacks the intoxication properties like marijuana, if consumed. Oil is extracted from the cannabis plant.

The top use as indicated in the 2021 survey is hemp grown for fiber, which was estimated at 33.2 million pounds. Flower production came in at 19.7 million pounds; while grain and seed use totaled 4.3- and 1.8 million pounds, respectively.

Longtime Northern California cannabis grower Nate Whittington said he’s coaxing officials in his local jurisdiction, Humboldt County, to come up with a cultivation ordinance. With CBD as a primary cannabinoid in the hemp plant that’s widely used for pain relief and to help with sleep deprivation, Whittington has noticed the senior community near his new San Francisco dispensary showing up in great numbers to buy CBD-infused products.

“We’re really seeing an uptick in that business,” he said, further estimating 30% of his retail revenue gained from CBD-infused products.

The reason hemp comes with such promise is that there’s a whole market out there that refrains from using products high in THC, the active agent more common in marijuana that elevates mood.

Hemp production was made legal in the U.S. farm bill a few years ago, though cannabis with its psychoactive properties found in THC remains classified as an illegal drug under federal rules.

The USDA relaxed restrictions a year ago this month on cultivators who grow hemp, increasing the level of allowable THC levels in federal statute from 0.3% to 1%. In 2016, 1,000 hemp farmers applied to grow. In 2020, 21,000 submitted applications to be licensed. No 2021 numbers were provided.

The hemp market was projected to have grown in 2021 by 23% compared to 2020, according to New Frontier Data market research shared by national industry panelists of a webcast that aired last spring titled, “The U.S. Hemp Market Landscape: Cannabinoids, Grain & Fiber.”

The USDA’s latest study found the majority of hemp producers are male (82%), who consider farming as their primary occupation. Flower hemp production grown out in the open alone constituted a crop worth $623 million.

“The release of this landmark report provides a needed benchmark about hemp production to assist producers, regulatory agencies, state governments, processors and other key industry entities,” NASS Administrator Hubert Hamer said in a statement. “The survey results may also impact policy decisions about the hemp industry.”

Susan Wood covers law, cannabis, production, tech, energy, transportation, agriculture as well as banking and finance. For 27 years, Susan has worked for a variety of publications including the North County Times, Tahoe Daily Tribune and Lake Tahoe News. Reach her at 530-545-8662 or susan.wood@busjrnl.com.