Why Industrial Hemp Could Prove A Larger Economic Driver Than Marijuana

Industrial hemp is set to be a huge economic driver in the not-so-distant future, even more so than medical cannabis or even recreational marijuana, Cynthia Salarizadeh told Benzinga during a recent conversation – while discussing Salar Media Group and Civilized Media Group’s recent Cannabis Trend Report.

“It’s amazing we’re so far into marijuana legalization, and people are still not focusing on hemp as much as I would have hoped,” she said.

This was not the first time someone mentioned this while chatting with Benzinga; back in May, Leslie Bocskor, investment banker and president of cannabis advisory firm Electrum Partners, explained why hemp could be the future of plastics. But, according to Salarizadeh, there’s much more to hemp than just plastics.

The Backstory

A few years ago, Salarizadeh graduated from the University of Pennsylvania. Her senior thesis was focused on big oil. During the process, she became increasingly disenchanted, as she discovered that reducing our dependency on petrochemicals and fossil fuels did not seem very likely in the foreseeable future, considering the vested interests and “the way things are built to run.”

As she got interested in hemp, she found out that the material could be used not only to make plastics, but also oils, fuels, fabrics, paper ... you name it.

“Uses for hemp are vast and impressive, and unfortunately under-recognized,” she said.

"My work [PR] is to help highlight the positives of marijuana so that, as people are considering what their opinion is on moving forward with cannabis legislation, they understand that 'Reefer Madness' was nothing more than a PR campaign to help advance certain interests [in detriment of cannabis and its benefits],” she explained. But, while it is easier to captivate hearts and minds with stories about medical cannabis treating epilepsy and other grave ailments like Alzheimer’s, or even addiction to Rx drugs and alcohol, for Salarizadeh, “what will change the world out of the cannabis plant is industrial hemp. Period.”

“What industrial hemp can do and will do is significant. The fact that hemp remains largely illegal in the United States and that we still do not have but a few processing plants that are functioning here is just shocking; it's bizarre. What it will require is exposure in the media so that we can get investments into the space. Hopefully people will start to do that soon,” she said. “Industrial hemp needs capital.”

Related Link: How Public Relations Firms Are Capitalizing On The Marijuana Green Rush

Derek Riedle of Civilized Media expressed much of the same sentiment, stating, “If more media attention is directed toward the potential of industrial hemp for economic and sustainability purposes, regulations will have an easier time passing and serious investment will begin to commence.”

Sustainability

Another interesting thing about hemp is that it’s carbon negative. In plain English, this means that the plant per se, like any other plant, pulls carbon out of the air, and that the products made with it, like plastic, can then be discarded into a landfill, returning carbon to the soil — anecdotal data and initial research have suggested.

In this line, Salarizadeh pointed out that hemp cultivation can also improve the quality of the soil. “Every time you have a full-season crop, the soil gets 'tired,' nutrients get sucked out. One of the major things we know that actually reignites all those nutrients and replenishes them is hemp,” she explained. “So, even if that was the only feature of industrial hemp [which it is not], it’s a very important feature for agriculture.”

To further back her statement, Salarizadeh pointed to a recent Ministry of Hemp article, which explains that this process of “using living things to heal the soil, allowing us to clean and reclaim some of these polluted lands” is called bioremediation. “While bacteria and other microorganisms can be used, phytoremediation, from the Greek word for plant, relies on crops like hemp,” the note’s author, Kit O’Connell, added.

“[Hemp] can also be used to clean up metals, pesticides, solvents, explosives, crude oil, polyaromatic hydrocarbons and toxins leaching from landfills,” she said.

Ecology

Beyond the sustainability implications related to the hemp plant, and its carbon-negative attributes, hemp cultivation is pretty eco-friendly. As a Recreator post argues, the plant needs “half the amount of land per ton of finished textile compared to cotton, and farmers can grow without the need for herbicides.”

This might not seem like that big a deal, but it is. According to World Bank data, the production of textiles accounts for more than 20 percent of water pollution on a global scale, with the production of a single cotton T-shirt using roughly 700 gallons of water and about half a pound of chemicals.

“At this time, the world as a whole urgently needs a replacement for the fossil fuel industry and the harmful environmental effects of crops including GMO soy, sunflower and cotton,” David Neisingh, founder of the hemp and CBD company Reakiro Labs, told Benzinga. In his view, while it is true that there are technological options to remedy this situation, “the only true solution should be an all-natural and organic one.

Related Link: What Zynerba's Flop Means For CBD Therapies And GW Pharmaceuticals

“If we go with industrial hemp, we would be replacing them with a solution that will solve significant environmental and socio-economic issues that are facing humanity now,” he added.

Unlimited Potential

The praise of hemp can go on forever. Its production not only generates no waste and no bi-products, while benefiting the soil, but it also requires no harmful pesticides. In addition, hemp is drought resistant. Furthermore, hemp can be used to make more than 50,000 products, ranging from food and cellulose to chemicals and fuels.

Other hemp-related topics and facts:

• High levels of Omega 3,6 and 9 found in hemp seeds, compared to olive or sunflower.
• The complete protein derived from hemp, believed to be superior to that obtained from whey, soy or sunflower.
• The super-strong plant fiber found in hemp, which has been used to make rope, sailcloth and textiles for thousands of years.
• The inner core of the hemp stalk, which is a very porous cellulose material that produces excellent bedding, absorptive and building materials – including a type of concrete that, according to Hempire UA founder Sergiy Kovalenkov, creates a much healthier and safer living environment than commonly used building materials. “This product is unique in that, during earthquakes, the structures built from it will not crack and the buildings are three times more resistant to damage than regular concrete. It also requires less energy to produce.”

Market Potential

Finally, we wanted to go into hemp’s market potential. In the "State of Hemp 2017" market report, the Hemp Business Journal estimated that the total retail value of all hemp products sold in the U.S. over 2016 hit at least $688 million. As per their estimates, the entire U.S. hemp industry could grow to $1.8 billion in sales by 2020, largely driven by hemp foods, body care and CBD-based products.

“The data demonstrates clearly that despite hemp remaining heavily restricted throughout the U.S., the industry is still growing quickly at 22percent five-year CAGR, and being led by food and body care products, with hemp CBD products showing a 63 percent AGR in 2016 and an estimated 38 percent AGR in 2017,” Sean Murphy, founder and publisher of the Hemp Business Journal, said during a recent conversation.

Murphy also had the courtesy to share with Benzinga a sneak peek into its not-yet-published mid-year update to the annual CBD Report. The latest research shows the hemp CBD sector is by far the hottest category in the industrial hemp industry with total “hemp-derived” CBD sales projected to reach $395 million by 2020, he explained.

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“It’s important folks understand the difference between hemp-derived and marijuana-derived CBD, and how there are different supply chains between these parallel CBD markets,” he said. “The total U.S. CBD industry did $264 million in sales in 2016 and we estimate it will grow to $1.16 billion by 2020 across combined hemp-derived, marijuana-derived and pharmaceutical sales.”

“Hemp has been utilized for thousands of years. Once it becomes common throughout the world once again, the numbers that will reflect the industry will rival any that are seen as market leaders today,” Murphy continued. “There will be a time in the near future where Wall Street will trade hemp as a staple in their portfolios, and the sooner the better.”

“The global potential for industrial hemp as a commodity is lucrative. It is now time for the media to pay attention in order to speed up the process of building out the infrastructure to meet it. This will provide a more sustainable future once it is in place.”

Hemp Equity Plays

Some publicly-traded industrial hemp companies include:

• Hemp Inc HEMP
• HempAmericana Inc HMPQ
• FutureLand Corp FUTL

Also, some “hemp-derived” CBD players are:

• CV Sciences CVSI
• Medical Marijuana Inc MJNA
• Laguna Brands LAGBF

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Image Credit: Javier Hasse