Whitney Economics slashes U.S. hemp acreage forecast by 82%

Cannabis and hemp business consulting firm Whitney Economics has dramatically reduced its 2030 forecast for U.S. hemp grain and fiber acreage, citing regulatory uncertainties and infrastructural challenges.

The firm now projects 1 million acres by 2030, down 82% from its previous estimate. The revision could translate to approximately $3.1 billion in lost revenue for U.S. hemp farmers, it said, based on output and pricing data from the USDA.

Beau Whitney, the firm’s founder, said in a statement Tuesday that policy developments, particularly regarding hemp for animal feed, have not moved along as expected with the FDA.

“Legislatures and cannabis regulators are so focused on re-criminalizing hemp while imposing restrictions on even non-intoxicating products, there is little appetite for hemp investment or the development of infrastructure to support the hemp sector,” Whitney said.

The Oregon-based firm pointed to several factors influencing its revised forecast:

Recent recommendations limiting THC and CBD content in animal feeds
Regulatory uncertainty due to changes in hemp-derived cannabinoid laws
Lack of progress in developing necessary infrastructure
Investor hesitancy amid unclear regulations

One unnamed investor told the firm, “When the laws are changing seemingly every week from state to state, I do not know what is legal versus what is not.”

Whitney noted that the FDA’s strict limits on THC and CBD for animal feed, which he described as “essentially defining THC and CBD as more toxic than arsenic, cadmium and lead,” have created additional wariness for farmers and processors of hemp grains.

“The attempt to provide clarity on animal feed by setting tight limits may have resulted in more uncertainty, not less,” Whitney said. “While some operators think that the newly adopted limits in animal feed will help farmers, others are not convinced. Regardless, when we examined both the micro and macro environment, it was clear that the demand for future acres for hemp fiber and grains will be muted.”

The industry is also watching for developments in the upcoming U.S. Farm Bill, which could have significant impacts on the sector’s regulatory scene, the firm said.

Despite the reduced forecast, the long-term potential market for hemp grain and fiber remains substantial. However, the Whitney report suggests that realizing that potential may depend on several sets of conditions, include clearer regulations and increased infrastructure investment.