Eight years after its legalization in the U.S., hemp production has become a viable crop for many growers looking for a sustainable rotational crop. Despite the growth, the hemp industry is advocating for regulatory reforms to support the nascent sector, while the closure of a legal loophole is causing concern among floral hemp growers.
Following the passage of the 2018 Farm Bill, industrial hemp that contained no more than 0.3% delta-9 THC on a dry-weight basis in the U.S. was legalized as an agricultural commodity and removed from the federal Controlled Substances Act.
Since legalization, the hemp industry has grown into a sizable business, with states like Montana, South Dakota, and others being large states for production. Hemp generated $445 million in production value in 2024, an increase of 40% from the previous year, according to USDA data.
In Montana and Washington, many hemp farmers sell their crops to commodity company IND Hemp. Hemp growers “are doing well” and helping IND Hemp accelerate its business growth, Morgan Tweet, CEO at IND Hemp and executive director of The Hemp Feed Coalition.
“Hemp is a competitive rotation crop. It adds value not just financially, but they see increases in their yields the following year. They see better soil penetration and water retention. … Every year, I pretty much always can get my growers to come back and grow for me again, and so that’s a good sign that something’s going well. We’re steadily increasing our acreage amounts as our business grows and our demand grows, and so our farmers are in a good spot,” Tweet elaborated.
The hemp industry splits in two: A look at regulatory concerns
As of Nov. 12, a new federal definition will be in effect that shifts to a total THC concentration of less than 0.3% on a dry weight basis, as opposed to a limit tied to delta-9 THC. The 0.3% delta-9 THC on a dry-weight basis requirement created a loophole, where producers could meet that requirement but still include intoxicating compounds.
With the loophole fix, consumer products are limited to 0.4 milligrams of total THC per container, effectively making it impossible to manufacture THC beverages or edibles. This change raised the alarm for floral hemp producers — those who typically create intoxicating products — who could see their businesses disappear.
“When you go over to floral, the price potential is almost 10 times what mine is because these are very high-value crops. They are still very labor intensive, but they’re growing four acres versus the 4,000 acres that we’re growing. So, their price per acre demands a higher value, and since those markets for floral production are absolutely in jeopardy right now, they’re very nervous,” Tweet elaborated.
How regulatory changes to crop genetics, feed could boost the hemp industry
Since it is in industrial production, IND Hemp will not be majorily impacted by the loophole closure. However, Tweet is taking the opportunity to advocate for a holistic approach to regulating the hemp industry through the Goodness of Hemp campaign.
The campaign is advocating to boost the compliance limit of total THC from the previous 0.3% to 1%, which would “allow more genetics that have higher yield potential for grain and fiber crops to come to the market,” thus boosting yields and reducing costs for producers, Tweet explained.
Additionally, Tweet is working to expand hemp as a viable feed stock through her work with The Hemp Feed Coalition (HFC). The HFC helped secure Association of American Feed Control Officials approval for hemp seed meal as an ingredient in feed for laying hens and is pursuing additional approvals for other livestock species, Tweet noted.
The process for approving new hemp feed ingredients is expensive for a nascent industry, but Tweet sees an opportunity to use hemp in animal supplements and for use with companion animals.
“There’s a giant market for high protein dog food and useful horse supplements and feed, and those are categories that really do see a benefit from this nutritional proposition that hemp brings,” she added.
