How hemp opens the door for cannabis investment

It is not easy to tell hemp and cannabis apart. Just ask police in Oklahoma and Idaho, where they recently arrested truckers hauling hemp from state to state and impounded their cargoes because the legal hemp looked like illegal cannabis. The biological distinctions between hemp and cannabis might only be visible to botanists, but they are crucial for investors.

That is because hemp, one of the first crops cultivated by humans, now offers a narrow, but legitimate, path into investment in the cannabis industry. If that sounds confusing, let me explain. The legal landscape around cannabis in the U.S. is increasingly byzantine, but there is no ambiguity about hemp: It has been federally legal since the government passed the Farm Bill in December 2018. This means that both the crop and hemp-derived products can now legally cross state lines, even if the cargoes occasionally arouse suspicion. 

Industrial hemp-based goods include clothing, food, paper, automotive parts and housing material, but investors are not excited about the plant’s potential for lightweight drawstring pants or thermal insulation. They want a slice of the market for one of the naturally occurring chemical compounds that can extracted from the tall, fibrous hemp crop: cannabidiol, or CBD. 

Read more at forbes.com


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