What would the US and world economy look like today had cannabis never been maligned and outlawed some 100 years ago? What if the cannabis sativa species had always been treated legally like any other agricultural crop in that it’s grown in backyard gardens like tomatoes, and industrial hemp transacts across international borders like corn and cotton?

It’s an interesting question when you consider the decades long prohibition not only outlawed all R&D into the health and medical benefits of the cannabis flower, but effectively snuffed out all agronomic innovation in cultivation and processing of the entire hemp plant. This website and blog focuses on the economic impacts of prohibition and speculates what the US and world economy would look like today had cannabis never been outlawed.

Current consensus fails to appreciate the full economic potential of the cannabis species
Most associate cannabis with recreational consumption of the psychoactive cannabinoid THC or in recent years, the healing properties of the cannabinoid CBD.  Lost in the conversation is industrial hemp as raw material feedstock to a variety of industries, the economic potential of which eclipses today’s demand for both THC and CBD. 

In fact, very few people really appreciate the economic potential of industrial hemp. To many people, cannabis is all about getting high or occasional medical uses. Few know U.S. Department of Agriculture Bulletin No. 404 published in 1916 claimed hemp hurds - the inner wood core of the hemp stalk - are a superior feedstock for papermills than harvested timber, producing 4x the amount of paper over the life of the trees. Likewise, not many have read the 1938 Popular Mechanics article titled “New Billion-Dollar Crop” that claimed “ “American farmers are promised a new cash crop with an annual value of several hundred million dollars, all because a machine has been invented that solves a problem more than 6,000 years old.” With a 1938 dollar worth $18.30 today, several hundred million of 1938 dollars translates into billions today.

Few know an acre of hemp yields 2x the amount of fiber than cotton while requiring less water, fertilizer and agricultural chemicals than existing crops.  By producing more biomass with less inputs, hemp provides superior economics to farmers and is far more environmentally friendly than existing crops.  By producing 4x the amount of paper than trees, hemp not only helps in the preservation of endangered forest, but hemp captures 4x the amount of carbon than trees in the process. 

The strength and durability of hemp fiber and the high silica content of hemp hurd provide idiosyncratic advantages, making them superior raw materials relative to existing feedstocks for industries ranging from textiles to building materials.  Compared to cotton, hemp fabric is stronger, more durable, better insulating and more absorbent. Hemp fiber’s antimicrobial properties are being deployed in products ranging from water filters to face masks. Compared to gypsum or fiberglass, hempcrete, a mixture of lime, hemp hurds and water, is a superior insulating material with higher vapor permeability, humidity control and more resistant to mold, fire and pests.   

Because hemp can serve as a superior feedstock to a variety of industries, an economy where cannabis has always been legal would look very different than the current economy.  With 90 million acres under cultivation, corn is America’s leading crop.  One-third of America’s corn harvest (representing about 30 million acres) is used as feedstock for subsidy dependent ethanol.  Rural America would be far more prosperous today if that 30 million acres of corn were instead cultivated with industrial hemp.  Winners would include farmers, consumers, rural based manufacturing and the environment.  Losers would include the pharmaceutical industry, timber, cotton and petrochemicals used as feedstock for synthetic fibers and plastics.       

Click charts below for further detail on why the cannabis sativa plant has such wide industrial uses and who are the winners and losers when legal