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The industrial hemp market is poised for a significant expansion, with a projected growth of $13.90 billion from 2024 to 2028, driven by rising demand across various industries, particularly textiles. According to a recent report by Technavio, the market is expected to grow at a compound annual growth rate (CAGR) of over 25.25% during this period.
This growth is propelled by crop versatility, with applications ranging from textiles to food and personal care products. But bear in mind, industrial hemp is not the same as medical hemp or cannabis.
Industrial hemp is a strain of the cannabis sativa plant grown primarily for manufacture-related applications, which use fibers, seeds and oils as inputs. Industrial hemp is sometimes cultivated for synthetic THC products, which is used to produce cannabinoids like delta-8 THC. But it also has vast industrial uses, which make it a promising commodity involving a wide segment of products.
Hemp fiber is used for textiles such as clothing and shoes, industrial textiles like rope, nets and carpets, tarps and general products like paper, bricks and building materials. Hemp oil is found in food supplements and personal care items like soap and beauty products; seeds are used to create protein flower and animal feed. This also distinguishes industrial hemp from cannabis, which is grown for its higher THC content and is used for recreational or medicinal purposes.
Sustainability is becoming a key focus across industries, and hemp is emerging as a promising solution. When used to replace contaminating hydrocarbon derivates, industrial hemp has various applications, including biofuels, bioplastics and cellulose fibers.
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The global industrial hemp market still developing, with several key players driving its growth. Although hemp is not their main focus, major companies such as Aurora Cannabis Inc. (NASDAQ:ACB), Canopy Growth Corp. (NASDAQ:CGC), Tilray Brands Inc. (NASDAQ:TLRY), and Charlottes Web Holdings Inc. (OTC:CWBHF) have their own business divisions or have acquired hemp related companies in the past.
The Asia-Pacific (APAC) region plays a crucial role in recent growth, contributing approximately 39% to the global market. China, the largest producer and demander in the region, accounted for around 26.27% of the global market in 2022.
Japan and South Korea are also significant contributors, with Japan legalizing hemp cultivation in 2019 and South Korea experiencing a surge in hemp-based food products since 2018. These developments underscore hemp’s potential to replace high-carbon components in many industries, aligning with the global push towards greener solutions.
The rapid expansion of the industrial hemp market presents lucrative opportunities for investors. As demand continues to grow and the focus on sustainability intensifies, the market offers potential for significant returns. With hemp’s diverse applications and the increasing global emphasis on eco-friendly solutions, investing in this sector could be a profitable venture.
The combination of market growth, initiatives by leading companies and the push for sustainable alternatives positions this industry as a hotspot for the coming years.
Cover Image: Photo by Leopictures via Pixabay
