Industrial Hemp Market

The global Industrial Hemp Market is valued at USD 8.15 Billion in 2023 and is projected to reach a value of USD 44.62 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 20.8% between 2024 and 2032.

Industrial Hemp Market Outlook

Industrial hemp is a variety of the Cannabis sativa plant and encompasses fiber, seeds, and oil utilized in diverse industrial and consumer applications in textiles, building materials, paper, fabrics, soap, food, dietary supplements, and cosmetics. The industrial hemp variant contains extremely low levels of delta-9-THC, the primary psychoactive compound in marijuana responsible for its intoxicating effects.

The market for Industrial Hemp is being driven by a various factors including evolving regulations, increasing consumer awareness, and the versatility of hemp-derived products. The industry has grown significantly as a result of substantial legislative changes, most notably the legalization of hemp growing in various nations. For instance, thirty countries including Argentina, Australia, Brazil, Canada, Colombia, Denmark, Germany, Greece, Ireland, Italy, Mexico, and the Netherlands have approved cannabis for medical use. Growing demand from a variety of industries, including as personal care, recycling, agriculture, automobiles, textiles, furniture, food & beverage, paper, and construction materials, is driving the global market expansion. ​

The Industrial Hemp market faced challenges during COVID-19 pandemic with manufacturing and construction activities disrupted by lockdowns. The Associated General Contractors of America reported project delays and cancellations, particularly in 'non-essential' sectors like offices and entertainment venues. Concurrently, the pandemic exacerbated mental health issues among the population, leading to increased demand for drugs and anxiety-reducing treatments like hemp cannabidiol (CBD) oil more popular worldwide.

Industry Highlights

• North America and Europe asserted dominance in the market in 2023 with 68.8% market share due to the advanced agricultural practices, supportive regulatory environments, and a growing demand for sustainable products across various industries
• China is the largest producer of industrial hemp and was valued at USD 0.885 million in 2023
• By Type, Hemp Seed emerged as the leading segment in 2023 accounting for 30.3% market share due to its growing popularity in the health and wellness industry, increasing consumer awareness about its nutritional benefits, and rising demand for hemp-based food products
• In 2023, Conventional segment leads the market with 65.3% market share, underscoring its widespread cultivation practices, and broad application across various industries
• Food & Beverages segment claimed the largest market share due to its increasing demand for hemp-based food products, growing consumer interest in plant-based nutrition, and the expanding use of hemp seeds and oil in a variety of culinary applications

Regional Market Overview

Europe and North America held over 65% of the overall market majorly due to favourable regulatory environments

In countries like the United States and Canada, the demand for industrial hemp has been increasing due to the growing geriatric population and heightened consumer awareness. For instance, according to American Community Survey 2023, 16.8% of the U.S. population is over 65 years old. Additionally, rising concerns about skin diseases and an increasing prevalence of chronic illnesses are expected to further boost the demand for industrial hemp. The United States boasts the world's largest pharmaceutical industry, accounting for over 40% of global pharmaceutical revenues. The passage of the 2018 Farm Bill in the United States opened up numerous opportunities for the cultivation of hemp and the development of hemp-derived products across various industries. For instance, in 2021, U.S. farmers produced industrial hemp worth USD 824 million, according to a USDA survey. The total planted area for industrial hemp in the United States amounted to 54,152 acres, with a production value of USD 712 million for open-grown hemp and USD 112 million for protected-grown hemp.

Europe is expected to hold the largest market share during the forecast period, as hemp is a major crop cultivated across many European countries. According to data from the European Union and Eurostat, the area dedicated to hemp cultivation in Europe has increased to 34,960 hectares in 2019. During the same period, hemp production saw a substantial increase of 62.4%.

France leads Europe with approximately 20,000 hectares (about 49,421.08 acres) dedicated to hemp cultivation. France is also renowned for its production of hempcrete (hemp-lime composites) used in the construction industry.

Germany with over 5,350 hectares of farmland allocated to hemp growth, placing it second in Europe. In Germany, the number of companies authorized to grow hemp and the amount of hemp cultivated have steadily increased over the years. There are well over 500 institutions involved in hemp cultivation. Hemp-based foods are particularly prevalent, found not only in health food stores but also in regular supermarkets.

China, recognized as the birthplace of hemp, remains the largest producer of industrial hemp and the leading exporter of hemp paper, textiles, and bio composites. For instance, China's 13th Five-Year Plan outlines the intention to plant 3.2 million hectares of hemp fiber for textiles by 2030, driven by the goal of finding more sustainable alternatives to cotton. In Yunnan, industrial hemp processing is categorized into hemp flower and leaf processing, hemp stalk processing, and hemp seed processing, with flower and leaf processing requiring a license. Local public security bureaus at the county level or higher issue these licenses and oversee processing activities. Licensing requirements include:

• A registered capital of at least RMB 20 million yuan (approximately USD 2.8 million) or being a scientific research institution in the fields of medicine, food, and chemicals.
• Detailed plans for the source and use of raw materials, product types, and processing methods.
• Special testing equipment, storage, processing facilities, and other necessary infrastructure.
• Management systems for testing, storage, and record-keeping.

Application Overview

Food and Beverages segment leads the market due to the rising consumer demand for health-conscious and sustainable food products. Hemp seeds, rich in essential fatty acids, proteins, and vitamins, are increasingly incorporated into various food items such as snacks, protein bars, and dairy alternatives. They are also used as bird seed and animal feed. Hemp leaves also used in salads. Vitamins E, B1, B2, B6, and D are abundant in hemp seeds, as are the important fatty acids linoleic (omega-6) and linolenic (omega-3). These essential fatty acids are crucial as the human body cannot produce them, and hemp seeds provide these with low saturated fats and no trans fats.

There is a boom for hemp-infused beverages, such as coffee, tea, and functional drinks intended for relaxation and well-being. Hemp's adaptability as a component that supports organic, vegan, and gluten-free diets drives its increasing use in the food and beverage sector. The legalization of hemp production and cultivation in numerous nations has improved the regulatory environment and fueled industry expansion. Innovations in product formulations and an increasing number of collaborations between food and beverage companies and hemp producers are also driving food and beverage segment.

Regulatory Overview

The legal landscape of industrial hemp varies significantly across countries and regions, influencing cultivation, processing, and sale practices. The legal status of hemp has changed significantly in many countries in recent years as a result of growing awareness of its various applications.

• United States: Hemp cultivation was historically restricted under federal law due to its association with marijuana. However, the 2018 Farm Bill legalized the cultivation of hemp as an agricultural commodity, removing it from the list of controlled substances. This legislation enabled states to develop hemp cultivation programs, leading to a surge in hemp production for industrial purpose including CBD extraction. However, USDA currently allows CBD-containing products for human use and in interstate commerce if the level of THC is less than 0.3%. If a product exceeds this level, it is considered a Schedule I drug and its sale and use are illegal.
• European Union: The EU has established a framework for hemp cultivation under the Common Agricultural Policy (CAP), allowing member states to grow hemp with THC (tetrahydrocannabinol) levels below 0.2%. This threshold varies slightly among member states, with some allowing up to 0.3% THC. The EU regulations also govern the processing and sale of hemp-derived products, ensuring compliance with quality and safety standards.
• Canada: Canada has a long history of hemp cultivation, and industrial hemp with THC levels below 0.3% is legal to grow under federal regulations. The country's regulations outline licensing requirements for growers, processors, and distributors, ensuring compliance with health and safety standards.
• China: In China, the legalization of industrial hemp is limited to two provinces. Yunnan province took the pioneering step by permitting the cultivation and regulation of industrial hemp. Similarly, another province in China has also enacted local legislation governing industrial hemp within its jurisdiction. These regulations stipulate that industrial hemp must contain less than 0.3% THC (tetrahydrocannabinol), aligning with international standards for THC content in hemp products.
• U.K.: The industrial hemp cultivation is permitted under regulations that specify a THC (tetrahydrocannabinol) content threshold of below 0.2%. This legal framework allows for the cultivation of cannabis intended specifically for industrial use.
• Italy: In Italy, the cultivation of industrial cannabis with a THC content below 0.2% is permitted without requiring governmental licenses or authorizations. Farmers can cultivate cannabis for industrial purposes without facing penalties for their activities.

Market Trends

• Advancements in Hemp Processing Technologies: Technological advancements in hemp processing are enhancing the efficiency and quality of hemp-derived products. Innovations in extraction methods, decortication, and fiber processing are leading to improved yields and higher-quality outputs, driving market growth.
• Increasing Use in Health and Wellness Products: Industrial hemp is gaining traction in the health and wellness sector due to its potential benefits, including CBD oil for therapeutic purposes. The growing acceptance of hemp-based health supplements, skincare products, and nutraceuticals is a significant trend in the market.
• Rising Interest in Hemp-Based Construction Materials: Hempcrete and other hemp-based construction materials are gaining popularity as sustainable alternatives to traditional building materials. The construction industry is increasingly adopting these materials for their eco-friendly properties, durability, and energy efficiency.
• Increased Investment in R&D: Significant investments in research and development are driving the exploration of new uses and benefits of industrial hemp. Continuous R&D efforts are leading to breakthroughs in product innovation, quality enhancement, and application development, propelling market growth.

‹›

Report Coverage & Deliverables

PDF report & online dashboard will help you understand:

• Real-Time Data Updates:
• Competitor Benchmarking
• Market Trends Heatmap
• Custom Research Queries
• Market Sentiment Analysis
• Demographic and Geographic Insights

Book Demo

Get Access Now

Track market trends LIVE & outsmart rivals with our Premium Data Intel Tool: Vantage Point

Market Dynamics

The rising legalization of industrial hemp across various regions is a significant driver for market growth

Legal frameworks are being established or updated to allow the cultivation and use of hemp, opening new markets and opportunities for producers and consumers. For instance, according to the United Nations Conference on Trade and Development, approximately 40 countries engaged in the production of raw or semi-finished hemp in 2021. The legalization of hemp encourages its wider adoption and application across a range of industries, including construction, food, medicine, and textiles, which propels market growth. Tetrahydrocannabinol (THC) levels are being adjusted and cultivation of hemp is being legalized by governments across the globe in an effort to increase the production of industrial hemp. For instance, in July 2022, the Minnesota government authorized the sale of hemp-derived THC edibles containing up to five milligrams of delta-8 and delta-9 THC per serving, with a maximum of fifty milligrams per package. Similarly, in December 2021, the European Parliament amended the new Common Agricultural Policy (CAP) for 2023, raising the allowable THC level for industrial hemp crops from 0.2% to 0.3%.

Innovative product development presents a significant opportunity for the Industrial Hemp market

Novel applications and products made from hemp are emerging as a result of R&D including advanced textiles, health supplements, and biodegradable plastics. The growing demand for hemp products in nations where hemp cultivation is still illegal is propelling trade prospects internationally. Additionally, the need for more hemp processing facilities is expanding across the globe, which is driving up exports from Asian nations like China. Governments across the globe are initiating programs to support hemp trade internationally, encouraging manufacturers to form alliances and cooperate in order to broaden their global distribution networks. For instance, in December 2022, InterCure Ltd., an Israeli medical cannabis company, entered into a definitive licensing agreement with Binske, a U.S.-based cannabis firm. Under this agreement, InterCure Ltd. gains exclusive multi-year rights to market, distribute, and manufacture Binske-branded products in pharmaceutical markets such as Australia, the U.K., Israel, and Germany.

Competitive Outlook

The Industrial Hemp market is competitive and diverse players striving to increase their market share through strategic efforts. Leading the way are businesses like HempFlax Group, Hemp Inc, Ecofibre Limited, and HempMeds Brazil, which are increasing their production capabilities, investing heavily in R&D, and launching cutting-edge products. These companies concentrate on incorporating cutting-edge technologies to enhance product quality and processing effectiveness. Competition is become even more intense as a result of new players entering the market in response to the growing demand for natural and sustainable products around the globe.

The key players in the global Industrial Hemp market include - GenCanna, HempFlax BV, Marijuana Company of America Inc., Cronos Group Inc., Ecofibre Limited, Green Thumb Industries, Curaleaf Holdings Inc., Konoplex Group, Hemp Oil Canada, Canah International, South Hemp Tecno, MH Medical Hemp GmbH, BAFA, Dun Agro Hemp Group, Colorado Hemp Works. among others.

Market Developments

HempMeds Brasil Launches Two New Full-Spectrum Products

• In February 2023, Hemp Inc announced its largest-ever sale of industrial product. The company shipped 120,000 pounds of DrillWall™, an all-natural kenaf/hemp Loss Circulation Material (LCM), using four semi-trucks for the oil and gas well drilling sectors.

Hemp Inc Announces Record Sale of Industrial Product

• In September 2022, Ecofibre Limited launched Green II Gold, a groundbreaking CBD-based skincare range. This line, developed from scratch, combines clinical-strength, full-spectrum hemp extract from Ananda Professional with powerful botanical ingredients to create professional-grade products for spas and salons.

Ecofibre Limited Introduces Green II Gold CBD Skincare Range

• In January 2023, HempMeds Brasil introduced two new full-spectrum products designed to meet the updated requirements of Brazilian doctors for their patients.

HempFlax Group Invests USD 3.2 Million to Upgrade Dutch Headquarters

• In October 2021, HempFlax Group announced an investment of approximately USD 3.2 million to upgrade its Dutch headquarters. Around USD 1.9 million of this investment will be allocated to machinery enhancements, aiming to double the hemp fiber processing capacity from 3 tons per hour to 6 tons per hour. These upgrades are expected to reduce the company's operational hours from 24 to 16 per day, thereby lowering energy consumption while boosting productivity.

The global Industrial Hemp market can be categorized as Type, Source, Application, and Region.

Frequently Asked Questions (FAQs)

1.How big is the market? What will be the global Industrial Hemp market size by 2032?

The global Industrial Hemp market is valued at $8.15 billion in 2023 and is anticipated to reach $44.62 billion by 2032, growing at a CAGR of 20.8% from 2024 to 2032.

2.What is industrial hemp used for?

Industrial hemp, a variety of the Cannabis sativa plant, is a versatile crop capable of being transformed into various products serving multiple purposes. Its stalk is utilized in the production of biofuel, automotive components, paper, upholstery, and fibers for textiles and other cloth-based items.

3.Is hemp illegal in India?

In 1985, hemp formed the foundation of India's ayurvedic industry and was often hailed as the "penicillin of the ayurvedic world." Despite pressure from the United States, India declined to sign a UN convention in 1961 that classified hemp as a synthetic drug. Eventually, hemp was legalized for medicinal use in 27 US states and for recreational use in 11 states, but its impact on Indian laws remained unchanged.

Uttarakhand has become India's first state to issue a hemp cultivation license, allowing for legal cultivation as long as the THC content remains below 0.3%. Additional states such as Uttar Pradesh, Himachal Pradesh, and Madhya Pradesh have also legalized hemp cultivation. While hemp cultivation laws are currently limited to a few states, this marks a promising beginning in regulatory efforts.

4.What is hemp used for medically?

Hemp is commonly used for ailments like constipation, high cholesterol, eczema, and arthritis among others, though there is no scientific evidence to substantiate these claims.

5.What is industrial hemp fiber used for?

Industrial Hemp is seeing growing usage in textile fibers, especially in clothing, bedding, footwear, and household items like curtains.