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Updated January 10, 2025
Farm Bill Primer: Hemp Industry Support and Regulation
Hemp is a variety or cultivar of Cannabis sativa-the same
plant as marijuana-grown to produce nonpsychoactive
food, beverage, consumer, and industrial products. The
2018 farm bill (Agriculture Improvement Act of 2018; P.L.
115-334) removed hemp (as defined, see text box) from the
definition of marijuana in the Controlled Substances Act
(CSA; 21 U.S.C. §§802 et seq.). The 2018 farm bill further
directed the U.S. Department of Agriculture (USDA) to
create a framework to regulate hemp cultivation under
federal law and facilitate hemp's commercial cultivation,
processing, marketing, and sale. USDA published its hemp
final rule in 2021. Other 2018 farm bill provisions made
hemp producers eligible for federal crop insurance and
agricultural research programs. Congress may consider
further policy changes as it debates the next farm bill.
Overview ofthe U.S. Hemp ndustry
USDA-reported data show that the U.S. hemp industry has
contracted in recent years. The farm-level value of total
utilized hemp production across all market segments (i.e.,
hemp fiber, grain, seed, and flower) was $291 million in
2023 compared with $824 million in 2021. Both outdoor
planted acres and square-feet under protection were lower
in 2023 than in 2021 and 2022 (Table 1). Floral hemp
grown in the open was the dominant type of hemp grown in
2021-2023, as measured by total value and acreage. In
contrast, the value and acreage dedicated to hemp fiber,
grain, and seed production were lower. Floral hemp tends to
command higher market prices compared with other
marketable uses for hemp. (See CRS In Focus IF11860,
Production, Marketing, and Regulation ofHemp Products.)
Terms and Definitions
Hemp-Defined as the plant Connabis sativa L. and any part of
that plant, including the seeds thereof and all derivatives,
extracts, cannabinoids, isomers, acids, salts, and salts of
isomers, whether growing or not, with a delta-9
tetrahydrocannabinol [THC] concentration of not more than
0.3 percent on a dry weight basis (7 U.S.C. §I 639o).
Connabinoids-No specific definition of cannabinoids exists in
the U.S. Code. Connobinoids refer to the unique chemical
compounds produced in the Connabis sativa plant, which are
known to exhibit a range of psychological and physiological
effects. There are more than 100 cannabinoids in the cannabis
plant. Tetrahydrocannabinol (THC) and cannabidiol (CBD) are
the two most well-researched and abundant cannabinoids.
See CRS Report R44742, Defining Hemp: A Fact Sheet.
Hemp is grown in all U.S. states under a USDA-approved
state plan or a USDA general license. The leading hemp
producing states-with more than 1,000 harvested acres
grown in the open in 2023-were South Dakota (2,900),
Montana (2,450), Oregon (2,050), California (1,900),
Missouri (1,410), Idaho (1,260), and Kentucky (1,210).
Production by state tends to be highly variable year to year.
Overall, harvested hemp accounts for a small share of total
U.S. harvested cropland acres (<0.1%). Harvested acres are
often reported as lower than planted acres, reflecting the
difference between legal hemp that falls below permitted
THC limits and noncompliant (or hot) hemp that is
prohibited from entering U.S. marketing channels. USDA
estimates about 20% of hemp grown during the crop year
will exceed legal THC limits, demonstrating the inherent
risks to farmers of growing hemp under USDA regulations.
Table I. U.S. Hemp Production by Market, 2021-2023
2021 2022 2023
Market Segment
($ in millions)
Hemp Production in Outdoor Open Field
Floral hemp 623.2 178.9 241.4
Hemp grains 6.0 3.6 2.3
Hemp fiber 41.4 28.3 11.6
Hemp seed 41.5 1.5 2.9
Subtotal $712.2 $212.3 $258.2
Total Planted Acres 54,152 28,314 27,680
Hemp Production Under Protection
Floral hemp 64.4 24.7 25.8
Hemp seed 23.7 8.5 6.3
Clones/Transplants 23.8 0.7 0.9
Subtotal $111.9 $34.0 $32.9
Total Square-Feet 15,590,395 4,876,743 3,244,527
Total Farm Value $824.1 $246.2 $291.0
Source: CRS, from USDA's National Hemp Reports and QuickStats.
Numbers may not sum because of rounding. Reported acres across
different segments are not additive given multi-crop production.
Hemp industry priorities for the next farm bill vary by
national and regional groups, often with diverging policy
goals and priorities, thus complicating policymaking. These
priorities often are tied to the primary hemp products a
group produces and/or represents or to the part of the hemp
plant used (e.g., whether hemp is grown for fiber for
industrial uses or for use in seed-derived food ingredients or
as a dietary supplement or wellness product). To date, the
Food and Drug Administration (FDA) has acknowledged
three hemp product categories-hulled hemp seed, hemp
seed protein, and hemp seed oil-as generally recognized
as safe (GRAS) for use in human food. Other hemp-derived
derivatives and extracts (or cannabinoids) have not been](ViewImageLocal?handle=hein.crs/goverzo0001&div=1&collection=&method=preview&ext=.png&size=3)