Finance

Hemp stocks possibly the next leader in the cannabis industry

Marijuana stocks remain hot this year as investors hoped to make big gains from the booming cannabis industry in Canada and the US Up until now, investors see marijuana stocks as bullish, and they are still active in making big purchases. Hemp’s purposes and its environment-friendly properties make it a must-have for investors. It is easy to see why investors are enticed by the cannabis industry.

Marijuana stocks remain hot this year as investors hoped to make big gains from the booming cannabis industry in Canada and the U.S. Up until now, investors see marijuana stocks as bullish, and they are still active in making big purchases. However, the leader of the cannabis industry may change soon as hemp stocks could be what is next on the list of investors.

The 2018 Farm Bill

Just recently, leaders of the U.S. Senate and House agricultural committee tentatively agreed on the changes for the 2018 version of the Farm Bill, says The Washington Post. Part of the legislation is geared towards the cannabis industry. More specifically, the bill will make growing industrial hemp in the U.S. legal. Hemp-derived cannabidiol (CBD) will be legal as well.

If the bill makes it through Congress and later on signed by President Donald Trump, then industrial hemp could be fully legalized on Jan. 1, 2019. The legal complications surrounding the hemp industry is its last barrier. Now that it is set to be lifted, investors are starting to have hemp stocks on their wishlist.

By 2025, it’s estimated that the industrial hemp market will be worth $10.6 billion. Source

Why hemp is catching the attention of investors

The industrial hemp market is forecast to worth $10.6 billion by 2025 with a compound annual growth rate (CAGR) of 14 percent. What makes the feat very possible is the fact that industrial hemp has various uses. Unlike marijuana, hemp is used as a primary ingredient in textiles and papers, and it is used in various industrial applications.

According to Hemp Biz Journal, CBD products sales account for the biggest portion of hemp’s annual revenue. CBD products are becoming more common across the U.S., more specifically, in states like New York and Washington. CBD oils are basically all the benefits of cannabis into an extract. Since CBD contains only trace amounts of tetrahydrocannabinol, it is legal in most states.

CBD products

Following CBD products closely are personal care products which include soaps, creams and more. Even big brands are jumping into the hemp industry. The Body Shop’s Hemp Soap on a Rope, for instance, is one of the brand’s top sellers. The all-natural organic product is purely from hemp and is part of a growing line of hemp care products.

CBD products include creams, soaps and oils.(Source)

Hemp’s purposes

Hemp also has various industrial applications. For example in clothing, because it has great properties that result in durable and environment-friendly items. Hemp clothing is stronger, more water-resistant, and provides more warmth than cotton clothing. Furthermore, hemp farms do not need pesticide and produce more usable products per acre.

Hemp’s wide range of purposes and its environment-friendly properties make it a must-have for investor’s portfolios. It is easy to see why investors are enticed by the growing legal hemp and cannabis industry. As the U.S. moves closer into passing the Farm Bill, we can expect more investors to dive into the hemp industry.

(Featured Image by Freek van der Weijden )

Desmond O'Flynn

Desmond O’Flynn believes in minimalism and the power of beer. As a young reporter for some of the largest national publications, he has lived in the world of finance and investing for nearly three decades. He has since included world politics and the global economy in his portfolio. He also writes about entrepreneurs and small businesses, as well as innovation in fintech, gambling, and cannabis industries.

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