Hemp is on track to become one of the biggest cash crops in the United States. With the latest changes in the 2018 Farm Bill, numerous industries are clamoring to jump at this exciting new opportunity.
With that being said, hemp is still considered to be a risky venture, and proper insurance is needed to protect suppliers in the event of a claim.
The Differences Between Hemp and Cannabis
Both hemp and cannabis are derived from the cannabis sativa species. While cannabis is often used for recreational purposes, hemp is mostly used for industrial applications. Hemp can be used to make paper, cosmetics, clothing, textiles, and building materials amongst other useful products.
The primary difference between hemp and cannabis is that hemp is cultivated to produce only small amounts of the psychoactive chemical tetrahydrocannabinol (THC) and a much higher percentage of cannabidiol (CBD) whereas the opposite is true for cannabis. THC is the reason that users feel “high” when they smoke cannabis. However, they cannot get high from hemp, as the THC content is typically too low.
It is because of these very differences that having insurance specifically for hemp crops is an important consideration for hemp growers.
Is Hemp Legal?
The 2018 Farm Bill stipulates that commercial hemp is legal as long as it contains less than .3% THC. The bill also states that growers can secure their crops with true crop insurance. With the passing of this bill, hemp products can be freely sold in all 50 states.
This is big news for the CBD industry, which has seen tremendous growth over the past few years. This is also big news for the hemp industry in general, as there will likely be more insurance options in the coming future.
Hemp-Derived CBD Products
CBD is the most popular hemp-derived product currently in the market today. With its many health properties becoming more evident through tests and studies, even the most resistant states have accepted CBD.
It’s estimated that the hemp-derived CBD industry will reach $450 million in sales by 2020. This doesn’t include the addition of CBD derived from cannabis, which is expected to push the entire CBD industry to $2.1 billion in estimated sales by 2020.
Cannabis vs. Hemp Crop Insurance
With cannabis legal in some states and hemp fully legal throughout the U.S., the need for comprehensive crop insurance is more important than ever before. The right insurance coverage will protect your crop from a range of perils such as wind, fire, lightning, theft, hail, and failure of your environmental system.
As the law is now, growers in the legal hemp and cannabis industry are not required to have crop insurance to maintain their license. With the recent legalization of commercial hemp (and continued spread of cannabis legalization), however, this may soon change.
Get an Insurance Quote
It’s time you protected your business the right way. Contact us today for a quote.