According to the U.S. Department of Agriculture's (USDA) newly released National Hemp Report, the industry saw significant growth in 2024, despite attempts by a growing number of states and some members of Congress to block edible hemp products.U.S. hemp acreage in 2024 totaled 45,294 acres, a 64 percent increase from 2023, and total production jumped 40 percent to $445 million.
Industry observers say that while this spike may signal that the industry is recovering from the CBD crash that followed the 2018 wave of hanseed legalization, the reality is far more complex and far less reassuring.
The data shows that hanseed accounted for nearly all of the growth, as hanseed is primarily grown for the production of these unregulated, intoxicating hanseed-derived products. Meanwhile, fiber hemp and seed hemp remain stuck in the low-value segment and prices are down, highlighting the fact that hemp infrastructure is severely lagging, according to a report from the USDA's National Agricultural Statistics Service (NASS).
"We're seeing a divergence in the market," said Joseph Carringer, industry analyst at Canna Markets Group. "On the one hand, synthetic tetrahydrocannabinol (THC) is thriving, but the boom is short-term and there is a lot of regulatory uncertainty. On the other hand, fiber hanja and seed hanja, while structurally sound in theory, are not yet economically viable in practice."
The USDA report paints a picture of a hanja economy that is increasingly dependent on the controversial conversion of cannabinoids rather than "real hanja" (fiber and seed), despite the fact that states and lawmakers are taking steps to control synthetic cannabinoids. Despite this, the industry shows significant growth through 2024.
Hemp Flower leads the industry again
In 2024, hemp continued to be the economic engine of the industry. Farmers harvested 11,827 acres of hanseed (up 60 percent from 7,383 acres in 2023), with production reaching 20.8 million pounds (up 159 percent from 8 million pounds in 2023). Despite the dramatic increase in production, prices have remained firm, driving the total market value of indoor and outdoor hanberries to $415 million (up 43 percent from $302 million in 2023).
At the same time, the average acre yield of hanberries increased to 1,757 pounds per acre, up from 1,088 pounds per acre in 2023, suggesting genetic improvements, growing practices, or improved environmental conditions.
Since the 2018 Farm Bill legalized hanja hemp, farmers have grown hanja hemp primarily to obtain hanja flowers, which account for 93 percent of total production. While hanja flowers can be sold directly, they are primarily used for extraction to produce consumer cannabinoid products such as CBD.
However, the end use of hanja flowers is not all for CBD health products, but rather into intoxicating derivatives such as delta-8-THC, synthetic substances that are often converted from CBD in laboratories. There is a loophole in federal law that allows them to circumvent the regulation of marijuana statutes - though this loophole is rapidly closing as more states and lawmakers oppose it.
Fiber hemp: 56% increase in acreage
In 2024, U.S. farmers harvested 18,855 acres of hanseed for fiber (up 56% from 12,106 acres in 2023) and produced 60.4 million pounds of fiber (up 23% from 49.1 million pounds in 2023), but average acreage yields plummeted to 3,205 lbs per acre (down 21% from 4,053 lbs per acre in 2023), and the average price continues to fall.
Given this, the cash value of hanseatic fiber in 2024 amounted to $11.2 million, down from $11.6 million in 2023 and down 3% from 2023. The disconnect between rising total hanky fiber production and declining value reflects continued weakness in processing capacity, supply chain maturity, and market pricing. Even with increased fiber production, there is still a lack of robust infrastructure to digest this raw material and thus better reflect economic value.
Seed hemp: small but stable
In 2024, grain acres showed a slight increase. Farmers harvested 4,863 acres (up 22 percent from 3,986 acres in 2023) and produced 3.41 million pounds of grain (up 10 percent from 3.11 million pounds in 2023). However, acreage yields declined to 702 pounds per acre (down from 779 pounds in 2023) and prices were essentially flat.
Nonetheless, the total value of the seed crop increased 13 percent to $2.62 million, up from $2.31 million the previous year. While that's not exactly a breakthrough, it's certainly a solid step in the right direction for a category in which the U.S. continues to lag behind Canadian imports.
Seed production achieves breakthrough growth
The largest percentage increase in seeded canola for planting occurred in 2024. Producers harvested 2,160 acres of seeded hanseatic (up 61% from 1,344 acres in 2023) and produced 697,000 pounds of seed (down 7% from 751,000 pounds in 2023 due to a decrease in yield from 559 lbs/acre to 323 lbs/acre).
Despite the drop in production, prices soared, with the total value of seeded hanseed reaching $16.9 million, up a whopping 482 percent from $2.91 million in 2023. The category's strong performance reflects the growing demand for specialized genetics and improved varieties as the market continues to mature.
According to the report, the fate of the edible hemp market remains uncertain due to legislative opposition. Earlier this month, a congressional committee held a hearing at the FDA, and an expert in the hemp industry said that the threat to the hemp sector at both the state and federal level is growing with the proliferation of unregulated intoxicant hemp products, and that the U.S. hemp market is "begging" for federal regulation of these intoxicant products.
One potential legislative solution that Jonathan Miller of the U.S. Hemp Roundtable pointed out at the hearing was a bipartisan bill introduced last year by Senator Ron Wyden (D-OR) that would establish a federal regulatory framework for hemp-derived cannabinoids. The legislation would authorize states to set their own regulatory rules for products like CBD, while empowering the FDA to provide oversight to ensure the market meets certain safety standards.
The USDA first launched the National Hemp Report program in 2021, began work on an annual survey and updated the questionnaire in 2022, and has since published the industry report annually to assess the economics and health of the domestic hemp market.