This report is in response to a national and state interest in the potential benefits of industrial hemp as an alternative crop. Industrial hemp has many uses which can be categorized into nine submarkets. North Dakota may have a comparative advantage in producing industrial hemp seed for oil because of the multi-oil processing facility in Carrington (AgGrow Oils) and the established infrastructure. Industrial hemp is currently legally produced in 22 countries with Canada being the closest and is recognized as a legal and legitimate crop in both the NAFTA and GATT agreements. The main obstacles for legalization of industrial hemp appear to be 1) law enforcement officials are concerned about the regulation, 2) no domestic facilities currently exist to process hemp stalks, although Canada will have such facilities shortly, 3) there is a lack of current production and processing technology, and 4) lack of research on the production potential and quality aspects of the crop. Since very little is known about the potential yield and quality of industrial hemp fiber and seed that would be produced in North Dakota, it is recommended that controlled experimental production and processing be allowed. Necessary baseline production, processing, and marketing data could be collected and analyzed, and law enforcement concerns could also be addressed.