The hemp and cannabis markets span across almost all sectors and industries; building materials, human and animal food, textiles, energy, industrial materials, medicine and more. In the 2013 Congressional Research Service report entitled “Hemp as an Agricultural Commodity”, reported that the U.S. retail market for hemp is estimated to be $500 million. It is estimated that the United States imports 60% of hemp produced worldwide, which would indicate that the global hemp market is well over $800 million. The medical and recreational cannabis markets are estimated to be anywhere from $10 to $120 billion annually. With the changing legal nature of these products and industries, there is very little accurate or comprehensive data available.
Hemp was purposely connected to its sister plant “marijuana”, as both are from the genus, Cannabis Sativa L. These are two distinctly different plants, easily distinguishable. The connection was made in order to suppress a superior commodity that threatened the market share of many industries; from timber and cotton, to fuel, food, pharma, agro, and more. For the past 75 years the use of the hemp plant has been intentionally suppressed.
There has been a consistent strong wave of positive change surrounding the hemp and cannabis industries over the past several years and it appears to be building momentum in each successive year. Federal regulators have stopped the DEA from interfering with States that have legalized hemp and cannabis. The recent spending bill passed to keep the U.S. government operating contained a clause that stopped all funding for the federal government from interfering with state medical and recreational cannabis use. Many more states are drafting bills to change legislation. Recent momentum was sparked by a documentary and public apology to medical cannabis users by Dr. Sanjay Gupta on CNN in August 2013.
Other countries are interpreting the United States’ legalization of hemp and cannabis as a signal to the rest of the world to do the same. Canada is far ahead of the game, as they recently invested $1.3 billion into the medical cannabis industry in preparation for import/export and international commerce. Jamaica recently announced that they intend to move towards full legalization of cannabis as a potential economic solution. Uruguay has already legalized cannabis. Mexico is strongly considering it, with former President Vincente Fox spearheading the movement in the country. Around the world many other countries are watching and waiting to see how the experiment in Colorado and Washington turns out.
Once we reach the inevitable tipping point every country around the world will launch domestic and international hemp and cannabis industries to create jobs and generate tax revenue. More than 30 industrialized nations already produce legal hemp, with China being the number one producer and Canada number two.
The rapidly emerging hemp and cannabis industries are fragmented into a myriad of small boutique businesses and a few larger scale international operations. There is no collaboration or coordination amongst industry participants as there is no recognized industry organization that properly represents hemp and cannabis companies. This is an excellent scenario to execute the GHG strategy. As industries develop, more and more new players enter into the market in all sectors. The consolidation phase is already beginning. Weaker companies will go out of business or be acquired; stronger companies will flourish and acquire the weaker players. GHG has been identifying potential targets for acquisition in all sectors of the hemp and cannabis industries, seeking to acquire multiple targets in each sector and “roll them up” into one stronger, branded entity that will benefit from the economies of scale of a much larger group of related companies