How the Hemp Industry is affected by international trade and shipping rates
You may be wondering why hemp fabrics aren’t made in the United States. The reason for this goes back to 1937 when the Marijuana Tax Act outlawed cannabis, making it basically impossible to possess and sell cannabis-derived products. These restrictions had prominent effects, one of them being the halt of the industrial hemp industry.
“It is more economical and environmentally friendly to transport products from China to Los Angeles overseas, than from Los Angeles to San Francisco by truck.”
In the late 20th century, fabric production costs increased in the United States, simultaneously there was an emergence of huge textile mills in developing countries. This led to companies sourcing raw materials and manufacturing overseas. Around 1992, hemp fabrics were imported into the United States from China and Europe, to be reintroduced to the American market.
While it may seem counterintuitive to ship items across the globe, It is more economical and environmentally friendly to transport products from China to Los Angeles overseas, than from Los Angeles to San Francisco by truck.
A rule of thumb for shipping: high value, low volume products are easily shipped across the globe, while low value, high volume products are restricted to local areas.
While hemp prohibition ended in 2018 on the federal level, the fiber industry has yet to materialize. While floral hemp doesn’t require large amounts of acreage to meet the demand, thousands more acres of fiber hemp need to be planted to get the industry started. The current situation puts the industry between a rock and a hard spot.
“Farmers don’t want to grow large amounts of hemp unless they have factories to buy and process the fiber. While companies don’t want to build factories unless there is a sufficient amount of raw materials to keep them in operation.”
Farmers don’t want to grow large amounts of hemp unless they have factories to buy and process the fiber. And companies don’t want to build factories unless there is a sufficient amount of raw materials to keep them in operation. The legalization of industrial hemp in the United States creates the opportunity for the industry to move forward. For example, high-quality hemp fiber and fabrics can be compressed into tight units. Therefore they can be shipped across the country and across the globe without much of an increase in price. The opportunity exists for farmers to grow hemp fiber in this country and export it to other countries that can transform them into fabrics. The fabrics can then be shipped back to the U.S., in whole or as finished products to be sold on the market. This is currently being done with cotton grown in the United States.
On the other hand, hemp cannot be grown solely for hurds since its value is too low. Products like hemp hurds, hemp insulation, or hemp boards are difficult to ship long distances while maintaining a competitive price. But by growing hemp for high-value fiber and grain, the lower value fiber and hurd may be used within the United States to produce hemp building materials. It creates a win/win situation where each country does what they do best, and free trade allows these items to be purchased around the globe. Free and fair trade will allow the hemp industry to grow and prosper.