What is the difference between industrial hemp and cannabinoid hemp?

Industrial hemp and cannabinoid hemp are two fundamentally different uses of the same plant species that require distinct regulatory frameworks. Industrial hemp is grown primarily for fiber, hurd, seeds, oils, textiles, building materials like hempcrete, and food products — applications that serve agricultural commodity markets and have no meaningful connection to cannabinoid content. Cannabinoid hemp is grown for its CBD, delta-8, delta-9, and other cannabinoid content, producing edibles, vapes, tinctures, and consumer wellness products. Joe Hickey Sr. identified the core regulatory failure as treating both categories identically: 'I think one of the issues is when you delineate between hemp and marijuana as a horticultural crop versus an agricultural crop.' Industrial hemp functions like traditional agriculture — comparable to grain or fiber crops like flax or cotton. Cannabinoid hemp functions more like specialty horticulture. Applying cannabinoid testing standards and crop destruction risk to industrial grain and fiber crops imposes regulatory burdens with no legitimate consumer safety justification, since the end products contain no concentrated cannabinoids.

Why does testing industrial hemp fiber crops for THC make no sense?

Hickey challenged the logic of applying cannabinoid testing standards to hemp grown for fiber and grain directly: 'Why in the hell are you testing a fiber and seed crop?' Industrial hemp fiber and grain products — textiles, building materials, rope, hempcrete, hemp seed oil, protein powder — do not concentrate cannabinoids in any way relevant to consumer safety. Testing the THC content of a plant being grown for its stalks and seeds applies an irrelevant standard to an agricultural crop. Hickey further highlighted the regulatory misalignment: 'The FDA allows heavy metals, pesticides, herbicides at a higher level than they do THC.' This means the substances that actually affect consumer safety — toxic metals and chemical residues — are regulated more permissively than a cannabinoid that is irrelevant in industrial fiber applications. The result is that farmers face crop destruction risk for minor natural THC variation in plants whose fiber products will never expose any consumer to cannabinoids.

How does Canada's hemp regulatory approach differ from the United States?

Canada has established a streamlined, unified federal hemp framework through Health Canada that the U.S. lacks entirely. When a Canadian farmer registers and provides a receipt for certified seed from an approved cultivar list, Health Canada conducts no field inspection and requires no in-field THC testing — trusting that certified varieties from approved genetics will remain within legal parameters. Hickey quoted this approach directly during the broadcast. In contrast, the U.S. imposes a state-by-state patchwork where Kentucky, Indiana, Illinois, California, and Oregon all apply different rules — creating compliance burdens that disproportionately affect small agricultural operations. Additionally, Canada federalized its hemp program standards nationally, allowing supply chains to develop efficiently across provincial lines. The U.S. has no equivalent unified framework, meaning a farmer in one state and a processor in another face entirely different compliance environments for the same crop.

How far behind is the U.S. in industrial hemp compared to Latin America?

Latin American countries began legalizing industrial hemp production in 2013 — five years before the 2018 Farm Bill legalized hemp in the United States, and a decade before the U.S. has achieved any meaningful regulatory clarity for industrial applications. The largest markets are already emerging in Paraguay, Colombia, and Uruguay, with Chile positioned to become the dominant regional producer. These countries developed appropriate regulatory distinctions between industrial and cannabinoid applications from the start, allowing agricultural and processing infrastructure to develop systematically. The U.S., by contrast, has spent much of its post-2018 Farm Bill period in regulatory confusion — applying cannabinoid standards to industrial crops, navigating a state-by-state patchwork, and failing to establish the federal framework that would allow industrial supply chains to develop at national scale. This 12-year head start represents a significant competitive disadvantage for U.S. industrial hemp in global fiber, grain, and building material markets.

What is the FIHO pledge and how does it support industrial hemp supply chains?

The Federation of International Hemp Organizations (FIHO) has created a pledge initiative through which companies — including major manufacturers and brands across food, textiles, construction, and industrial sectors — can formally commit to incorporating hemp into their supply chains once consistent supply and quality standards are established. The pledge addresses the supply chain coordination problem Hickey identified as hemp's core obstacle: farmers won't plant without buyer commitments, processors won't invest without consistent supply, and end-users won't commit without reliable pricing and quality. The pledge breaks this stalemate by allowing companies to signal future intent without requiring immediate action. Hickey explained the cascade theory: once one major brand signs, others follow competitive pressure to do the same. For those interested in supporting industrial hemp supply chain development, the pledge is available at fiho.org.

What legislation has Joe Hickey proposed to support hemp industry growth?

Hickey has proposed legislation to provide targeted tax incentives for all participants in the hemp supply chain — farmers, processors, and end users. As he described during the broadcast: 'I'm going to put legislation in to give tax breaks or tax incentives to farmers that are participating in the industry, processors, and the end users.' This three-tier approach recognizes that the hemp supply chain coordination problem requires simultaneous incentives across the full chain — not just at the farm level. Tax incentives for processors reduce the capital risk of building processing infrastructure before consistent raw material supply is guaranteed; incentives for end users reduce the switching cost of incorporating hemp materials into existing supply chains. The underlying principle is that government support should be targeted to industrial applications where market failure has prevented voluntary coordination, rather than waiting for the market to self-organize around an inherently difficult coordination problem.

Industrial Hemp vs. Cannabinoid Hemp: Bridging the Regulatory Divide

Category: Business Learning Center Videos

Author: The Qredible Team

Date: May 14, 2025

Hemp has been cultivated for thousands of years, yet today's regulatory environment treats this versatile plant with confusion and inconsistency. During a recent Qredible Live Broadcast, Joe Hickey, president of the Kentucky Hemp Growers Cooperative, shared crucial insights about the divide between industrial hemp and cannabinoid hemp. This discussion highlighted how regulatory misunderstandings between these distinct sectors are creating significant barriers to industry growth.

"I think one of the issues is when you delineate between hemp and marijuana as a horticultural crop versus an agricultural crop," Hickey explained during the broadcast, pointing to the fundamental difference that regulators often miss.

Understanding the Two Hemp Markets

Industrial Hemp: The Agricultural Powerhouse

Industrial hemp is grown primarily for fiber, hurd, seeds, oils, textiles, building materials, and food. These applications serve entirely different markets from cannabinoid products and represent the sector with the greatest potential for American agriculture.

As Hickey pointedly stated, "Grain fiber is going to help 99.9% of American farmers." This agricultural focus represents hemp's ability to become a mainstream commodity crop supporting rural economies nationwide.

Cannabinoid Hemp: The Specialty Market

The psychoactive hemp market focuses on products containing cannabinoids like delta-8 THC, delta-9 THC, and CBD, used in edibles, vapes, tinctures, and other consumer products. While valuable in its own right, this sector operates more like specialty horticulture than traditional agriculture.

Regulatory Challenges Creating Market Barriers

Inconsistent State Regulations

Unlike Canada, which has established clear federal guidelines, the United States suffers from a patchwork of state regulations. "KY's has different rules than Indiana. Indiana has rules different than Illinois. California has different rules than Oregon," Hickey noted during the discussion.

This inconsistency creates compliance burdens that disproportionately affect farmers and small businesses trying to enter the hemp space.

Excessive Testing Requirements

One of the most counterproductive aspects of current regulations is applying cannabinoid testing standards to industrial hemp crops. "Why in the hell are you testing a fiber and seed crop?" Hickey questioned, highlighting the absurdity of current approaches.

He further illustrated the unreasonable nature of current standards: "The FDA allows heavy metals, pesticides, herbicides at a higher level than they do THC." This misalignment of priorities demonstrates how regulatory focus has drifted from public safety to arbitrary distinctions.

The Canadian Model

Canada offers a streamlined approach worth examining. According to Hickey, who spoke with the head of Health Canada, "What we do is the farmer when he registers, if he has a receipt for certified seed, we don't even go out and look at him. We never even pay attention to him anymore because we know that he has certified seed."

This certification-based approach eliminates unnecessary testing while maintaining standards, allowing farmers to focus on production rather than compliance.

The International Competitive Disadvantage

While the U.S. struggles with regulatory confusion, other regions are advancing rapidly in industrial hemp production. Latin American countries have been legalizing industrial hemp production since 2013, putting them years ahead of U.S. development.

The largest markets are emerging in Paraguay, Colombia, and Uruguay, with Chile expected to become the dominant producer in the region. These countries have made proper distinctions between industrial and cannabinoid applications, allowing for targeted agricultural development.

Solutions to Bridge the Divide

Clear Regulatory Separation

The most urgent need is for updated federal policy that clearly distinguishes between industrial hemp and cannabinoid hemp. "Unlike Health Canada, where they've been able to federalize their programs right across the entire country, we don't have that," was noted during the broadcast.

An updated Farm Bill with clear distinctions would allow each sector to develop appropriate regulations based on end-use rather than applying cannabinoid standards to industrial applications.

Industry Cooperation

Despite different end markets, both sectors would benefit from working together to advance clear regulatory frameworks. "We need to respect each other for what we're growing it for, and we need to get it right because everybody's boat will float higher on both sides if we happen to get it right," the broadcast emphasized.

Government Support Programs

Hickey has proposed legislation to provide tax incentives for farmers, processors, and end users participating in the hemp industry. "I'm going to put legislation in to give tax breaks or tax incentives to farmers that are participating in the industry, processors, and the end users," he explained.

This targeted approach would help build consistent supply chains needed for industrial applications.

Moving Forward Together

The divide between industrial hemp and cannabinoid hemp isn't insurmountable, but it requires deliberate policy action and industry cooperation. By properly categorizing these distinct agricultural sectors, both can thrive without unnecessarily restrictive regulations.

As Hickey reminded us during the broadcast, "Everything starts at the farm and we're forgetting them." This foundation is where true industry growth begins, and regulatory clarity is essential to supporting agricultural producers.

For those interested in supporting these efforts, the Federation of International Hemp Organizations (FIHO) has created a pledge initiative at fiho.org, where companies can commit to using hemp products when consistent supply and quality standards are established.