The industrial hemp market is projected to grow from USD 4.6 billion in 2019 to USD 26.6 billion by 2025, recording a compound annual growth rate (CAGR) of 34.0% during the forecast period. The major factors driving the growth of the industrial hemp market include increasing legalization in the cultivation of industrial hemp, functional properties of hemp seed and hemp seed oil, and their growing use in different food applications, and increase number of chronic diseases.
Key Market Players
• Hempco (Canada)
• Ecofibre (Australia)
• Hemp Inc. (US)
• GenCanna (US)
• HempFlax BV (Netherlands)
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The European region is projected to be the fastest-growing region in the industrial hemp market during the forecast period owing to growth in consumption of hemp seeds as food as well as their wide application in other food products such as smoothies, yogurt, cereals, and bars especially in countries such as Germany and the Netherlands. Furthermore, increasing legalization of industrial hemp in the European region in the coming years is expected to boost the industrial hemp market.
Opportunity: New product developments from industrial hemp
The increasing legalization of the cultivation of hemp is prompting the manufacturers and research institutions to develop new products from industrial hemp. Biofuel is one such application, which is expected to have significant growth potential in the upcoming years. With the rise in the prices of oil (diesel & petrol), along with the growing concerns about global warming, biofuels have been gaining popularity. Hemp seed extracts are used to produce hemp biodiesel, which can be used in any diesel operated vehicle. Furthermore, hemp can be used to make ethanol, which is currently processed from food crops like wheat and corn. This would result in increased efficiency of food production. Researchers from the University of Connecticut published a report in 2010 stating that hemp biodiesel has a high conversion efficiency of around 97%. Thus, its application as a biofuel would save much time for the production of biodiesel.
Driver: Functional properties of hemp seed and hemp seed oil, and their increased use in different food applications
Hemp seeds obtained from the plant “Cannabis sativa” contain only trace amounts of tetrahydrocannabinol (THC). They are rich in two essential fatty acids, linoleic (omega-6) and linolenic (omega-3). They are also a rich source of vitamin E, vitamin B1, vitamin B2, vitamin B6, vitamin D, calcium, magnesium, and potassium, among others. Very few plant-based foods are a complete source of protein; hemp seeds, on the other hand, contain enough amounts of protein that can be considered as a value addition to a vegan diet. Since humans cannot produce essential fatty acids, the addition of hemp seeds could be useful to them, as they are a great source of linoleic (omega-6) and linolenic (omega-3). Additionally, they are low in saturated fats and contain no trans-fat. These are some vital factors that are expected to drive the growth of the hemp seed market in the future.
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The CBD hemp oil segment is projected to be the fastest-growing segment in the industrial hemp market during the forecast period
The industrial hemp market is segmented, based on type, into hemp fiber, hemp seed, hemp seed oil, and CBD hemp oil. The CBD hemp oil segment is projected to be the fastest-growing segment in the industrial hemp market during the forecast period. This is attributed to the growing usage of CBD hemp oil in various applications such as personal care, health supplements, and food & beverages products. Furthermore, the numerous health benefits of CBD hemp oil make it useful to treat and prevent conditions like anxiety, depression, pain, and acne are also expected to drive the growth.