Quantifying the Economywide Impacts of Industrial Hemp Adoption in the U.S.

This study analyzes macro-economic aspects of industrial hemp adoption in the U.S. economy with a focus on fiber products. Hemp is currently not economically viable but we analyze potential policies for adoption of hemp using a general equilibrium model. Under a hypothetical three million acres of hemp production, fiber products could be widely integrated as intermediate inputs into production sectors involving fiber, paper, concrete, and building materials. The hemp-producing crops sector would increase in value by approximately four percent and would pull resources from other sectors of the economy. The model predicts that much hemp demand could be met by supply from outside the U.S., so expansion of domestic production is not guaranteed even if domestic demand is strong.