Expert Economist Slashes Hemp Acreage Forecast By 82% For 2030, Here's Why

As the hemp industry grapples with regulatory challenges, Whitney Economics has drastically cut its 2030 hemp acreage forecast. The revised projection now stands at just 1.0 million acres, a stark 82% reduction from earlier estimates.

This significant cut could lead to nearly $3.1 billion in lost revenue for U.S. hemp farmers.

Wait-And-See Strategy

Farmers are increasingly adopting a wait-and-see approach due to the uncertain future shaped by ongoing national debates and anti-hemp regulations.

Whitney points to several factors for the forecast downgrade: slow policy developments on hemp in animal feed by the Food and Drug Administration (FDA), and increased legislative focus on re-criminalizing hemp. These issues have stifled necessary investment and infrastructure development in the hemp sector.

“Policy setbacks and restrictive cannabinoid laws have created a highly uncertain environment,” reads Whitney Economics’s statement. This sentiment is shared by investors, one of whom said, “The constant flux in laws makes it hard to know what’s legal.”

Read Also: Anti-Drug Groups Urge Congress To Ban Hemp-Derived Cannabinoids As Debate Grows

THC And CBD Regulations Increase Hesitance

With the upcoming U.S. Farm Bill, which will not likely be modified until 2025, and the state-by-state nature of hemp regulations, many farmers and manufacturers downstream will forcibly remain idle as they wait for clearer business terms. 

The introduction of stringent limits on THC and CBD in animal feed has intensified market hesitance and the will of farmers to grow hemp. These new regulations, which portray cannabinoids as potentially more dangerous than arsenic, have alarmed industry stakeholders.

“Setting strict cannabinoid limits in animal feed might have increased the regulatory fog,” a Whitney representative stated. While some operators see potential benefits, others are skeptical.

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Key Factors Behind Whitney Economics’ Forecast Adjustment

The lack of clear regulatory pathways and investment has led Whitney to predict a muted demand for hemp acreage in the coming years.

• FDA’s Slow Policy Development: The anticipated policies regarding hemp in animal feeds have not progressed as expected. This delay impacts the entire supply chain, from cultivation to market.
• Increased Regulatory Scrutiny: Legislatures focusing on tighter restrictions and possible re-criminalization of hemp impact investor confidence and market stability.
• Cannabinoid Regulation: New limits set for THC and CBD in animal feed add complexity and uncertainty, potentially affecting future regulations on human-consumable hemp products. Investment and Infrastructure
• Lag: Without adequate infrastructure and a clear regulatory framework, investments in the hemp sector have declined, limiting growth and development.
• Market Uncertainty: The shifting legal landscape and mixed signals from regulatory bodies have led to a cautious approach from farmers and processors, dampening the expected expansion of hemp acreage.

Read Next: Navigating Hemp Vs. Cannabis Debate: One Agenda For All? US Cannabis Council’s David Culver Weighs In

Cover: Photo by Eir Health via Unsplash