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Big Opportunities in Hemp — a $1.65 Billion Industry

Big Opportunities in Hemp — a $1.65 Billion Industry

“CBD saved my husband.”

The crowd surrounding me shifted to listen to her story.

She went on to say that her husband suffered from a severe form of arthritis. He tried a slew of medications, but the ones that helped came with crippling side effects.

Their daughter had suggested that he try CBD oil. Doubtful but desperate, he began using it on his joints.

“It’s amazing — he can move pain-free again.”

This woman shared her story with me at the 2018 Total Wealth Symposium conference in Las Vegas. I had just finished a talk on cannabis with Matt Badiali. 

A mob of people eager to ask questions about investing in the marijuana sector surrounded me.

But her story brought into focus the human element in the cannabis industry.

The Growing Hemp Industry

Hemp offers exciting new opportunities for investors. The Brightfield Group, a cannabis research firm, estimates that hemp will be a $1.65 billion industry by 2021.

In December, Washington, D.C., passed the 2018 Farm Bill. It included powerful language for the future of hemp. That’s because it decouples marijuana and hemp.

At a glance, marijuana and hemp look very similar. But the chemicals made in their flowering buds are quite different.

Marijuana makes THC and CBD. And it’s used for medical and recreational purposes.

THC is what produces the “high” people feel from using marijuana. CBD is nonpsychoactive, meaning that it does not alter the state of consciousness of its user.

Hemp lacks THC. The U.S. classifies hemp as having less than 0.3% THC. Hemp cannot be used to get high.

That leaves two other purposes for hemp: CBD and materials.

CBD is extracted from the budding flower. The compound is linked to health and wellness benefits. Studies show that CBD helps with certain forms of epilepsy, depression, insomnia, inflammation and pain.

Industrial hemp uses the fibers from the stalk of the plant. These are used to make construction materials, textiles and fabrics, and forms of plastics. The Chinese military, for example, uses hemp fabric for its uniforms.

While there are different strains for textile use and CBD production, both are called hemp because they lack THC — the types grown are very different.

But hemp has the potential to revitalize parts of America’s heartland and make a lot of money for investors!

Side Note: This article is focused on the hemp industry. But I have a weekly POTcast that focuses on covering breaking news in the broader cannabis space.

Watch my most recent update below.

States Get the Green Light on Hemp

Colorado is the leading hemp grower. The state boasts more than 12,000 acres of hemp. That turns out to be more than half of America’s entire annual harvest.

But the Farm Bill is opening up the hemp industry for the entire country. Hemp farmers will now be able to buy crop insurance and get bank loans.

State regulators are moving forward on initiatives to approve their hemp programs on the federal level. Georgia, Florida and Texas are already moving forward on measures to license hemp growers.

The trickle into hemp will become a flood.

The traditional tobacco-growing states are likely to become the next leaders in hemp growing. States like Kentucky, Tennessee and North Carolina are perfect growing environments for hemp. And the drying houses for tobacco require little modification to dry hemp buds for CBD use.

Real Wealth Strategist Is Already in the Hemp Game

While hemp will bring back thousands of jobs to America’s heartland, as investors we need a bigger opportunity than pure-play growers.

In Real Wealth Strategist, we own a Canadian producer with hemp assets in the U.S. It is able to leverage its brand strength to infuse CBD into value-added products. That means it will actually have better margins as hemp becomes cheaper from a growing supply.

These are exactly the kinds of opportunities we are looking to add to our portfolio.

Good investing,

Anthony Planas

Internal Analyst, Banyan Hill Publishing

P.S. Don’t forget to check out my new YouTube channel! Hit the subscribe button to receive a notification when I post new content.

 

 

 

About The Author

Anthony Planas

Anthony Planas joined Banyan Hill in 2017 as a research analyst. A market “outsider,” Anthony uses his science background to create an objective view of investments. This approach allows him to overcome the emotional biases that plague the average investor.

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