The Current State of Hemp Markets in the US

The U.S. hemp market in 2024 continues to grow rapidly, driven by evolving consumer demand and a complex regulatory landscape. While the 2018 Farm Bill federally legalized hemp products with less than 0.3% THC, states have taken diverse approaches to regulation, shaping the industry in unique ways. Hemp-derived cannabinoids like Delta-8 and Delta-9 THC have fueled market expansion, with Delta-8 alone growing 1,283% between 2020 and 2023 to reach $2.8 billion. Globally, CBD demand is also surging, with the market expected to grow from $7.6 billion in 2023 to $36.6 billion by 2033, highlighting the continued interest in hemp-derived products for wellness and therapeutic use.

Check out our detailed blog on the U.S. hemp market and hemp-derived cannabinoids for a more in-depth exploration of key growth drivers and challenges.

This blog focuses on key states reflecting broader trends and challenges in the hemp industry:

• Missouri: Examining the balance between economic potential and regulatory oversight.
• Tennessee: Navigating questions of public safety amidst expanding product availability.
• Texas: Highlighting cultural shifts and market opportunities in a complex legal environment.
• Minnesota: Showcasing transformations in hemp regulation and market dynamics.

These states illustrate the diverse ways hemp is reshaping local economies and addressing regulatory hurdles in 2024.

Missouri: Navigating Revival and Regulation

Missouri, once a leader in hemp production, is working to reclaim its position within the industry after decades of prohibition. In an article published on August 1, 2024, it was noted that Missouri’s historical dominance in hemp production was significantly disrupted by the Marihuana Tax Act of 1937. While this act was intended to target recreational cannabis use, it inadvertently affected industrial hemp, leading to a long period of dormancy. Following the 2018 Farm Bill, Missouri farmers were given a pathway to re-enter the hemp market, sparking a gradual rebirth of the industry.

In recent years, Missouri’s hemp market has grown substantially, with approximately 9,000 retailers now selling hemp-derived edibles and beverages, according to an August 12, 2024, report. Despite this progress, regulatory challenges remain a significant concern for industry leaders. Some worry that recent proposals to restrict products not marketed to children and to enforce lab testing for adults over 21 may stifle market growth.

Industry advocates argue that the Alcohol and Tobacco Tax and Trade Bureau would be better suited to oversee these products rather than instituting restrictive bans, which could reduce the industry’s progress.

On September 10, 2024, an article underscored the complexities of dosage regulations in Missouri’s hemp edibles market. For instance, a 50-gram chocolate bar containing 0.3% THC can have approximately 150 mg of THC—an amount thirty times the recommended dosage set by the National Institute on Drug Abuse. Other products, like family-sized cookie packs, can contain up to 1,700 mg of THC at the same threshold, raising public safety concerns. Missouri has witnessed the growing national trend of hemp bans, and some state legislators are pushing for stricter limits on THC content in hemp products. Retailers fear that such measures, while protecting public safety, could heavily restrict consumer options.

The legal and regulatory atmosphere in Missouri remains complex as federal and state laws sometimes conflict. State regulations aim to manage hemp products responsibly, but frequent challenges from industry stakeholders reveal the underlying tension. Federal judges have issued mixed rulings regarding how states can independently legislate on hemp products without additional federal amendments, adding layers of uncertainty to an already intricate market.

Tennessee: Adapting Policy Changes and Market Uncertainty

Tennessee’s hemp market in 2024 is marked by an evolving regulatory environment that mirrors broader trends nationwide.

In an article published on July 30, 2024, discussions centered on the increasing popularity of hemp-derived cannabinoids (HDCs) beyond delta-9 THC, including Delta-8, CBN, and others. In response to these changes, the Tennessee Farm Bureau Federation (TFBF) expressed support for the Tennessee Department of Agriculture’s (TDA) proposed rules allowing farmers to cultivate hemp with less than 0.3% delta-9 THC and regulate other HDCs, which could encourage further innovation in hemp-derived products.

However, not all regulatory developments have been favorable for the market. On October 23, 2024, the TDA enacted a ban on THCa flower—a product that accounts for approximately 70% to 80% of sales in Tennessee’s hemp market. This aligns with a growing trend of states banning certain hemp-derived THC products, particularly those with psychoactive effects. Tennessee’s ban on THCa and additional regulations on hemp cannabinoids, announced on October 28, 2024, has introduced more uncertainty, creating a challenging environment for businesses attempting to navigate the shifting rules.

Tennessee’s broader legal framework around cannabis adds further complications. Recreational cannabis use remains illegal, and first-time offenders caught with up to half an ounce face fines and potential jail time. This strict stance on cannabis contrasts with the more lenient approach Tennessee has taken with certain hemp-derived cannabinoids. Governor Bill Lee’s 2023 legislation imposed a 6% tax, set age restrictions, and established a licensing framework for hemp-derived cannabinoids.

By September 27, 2024, the TDA had finalized regulations aligning with state and federal guidelines, set to take effect in December 2024, bringing more stability to an otherwise unpredictable market.

The challenges for Tennessee’s hemp industry are significant, with many stakeholders warning that overly restrictive policies could reverse recent gains. The sector contributed $50 million in revenue during the first half of 2024, reflecting the economic potential and the importance of maintaining a stable legal environment. As Tennessee’s hemp market evolves, balancing public safety with economic growth remains a pressing concern for industry leaders and state regulators.

Texas: Balancing Control and Industry Potential

Texas presents both challenges and opportunities within the hemp sector, with regulations aimed at ensuring safety while allowing industry growth. A May 28, 2024, article noted that Texas requires comprehensive testing for all consumable cannabinoids, robust licensing standards, and strict labeling requirements, which reflect the state’s commitment to transparency. Certificates of analysis are also required, underscoring Texas’ focus on consumer protection through traceability and informed purchasing.

However, Texas is closely monitoring the potential for product bans, especially regarding Delta-8 and Delta-9 THC, which are growing in popularity but remain in a legal gray area. Texas has joined other states considering or enacting restrictions on these products, citing concerns about unregulated psychoactive effects and the rapid proliferation of hemp-derived THC. Texas’ market has grown to support over 7,000 registered dispensaries and employs more than 50,000 people, according to a May 31, 2024, report.

As demand for hemp-derived products remains high, advocates warn that potential restrictions on Delta-8 and Delta-9 THC could result in job losses and economic decline. Legislative debates around these compounds are ongoing, with Lt. Gov. Dan Patrick calling for a Senate interim committee to assess the unregulated nature of certain products. Given the scope of Texas’ hemp industry—which contributes $8 billion to the state’s economy, generates $1.6 billion in wages, and supports tens of thousands of jobs—such restrictions could have significant ripple effects.

Texas law permits the sale of CBD products that meet specific production standards and limits THC content to 1% for certain medical conditions. However, recreational cannabis remains illegal, creating tension between hemp and cannabis advocates. The legal status of Delta-8 THC, under court review since October 29, 2024, only adds to the uncertainty for businesses and consumers.

Texas industry leaders argue that overly restrictive regulations could curb economic opportunities and stymie growth. The hemp market here, as in other states, reflects a balance between consumer demand, safety concerns, and regulatory caution. Moving forward, Texas must navigate these dynamics carefully to sustain the market while maintaining consumer protection standards.

Flourish is proud to partner with hemp dispensaries like The Healing Clinic, delivering a seamless retail experience through our robust point-of-sale system, fully integrated with their eCommerce platform.

Currently serving customers in San Antonio, The Healing Clinic has exciting plans to expand its retail footprint across the Lone Star State, bringing high-quality hemp products to more communities.

Minnesota: A Merging of Markets

Minnesota offers a unique case in 2024, embracing a progressive regulatory framework that allows THC-infused beverages and edibles to be sold alongside alcoholic beverages. This integration has created a thriving market for hemp-derived products, with THC drinks available at liquor stores, high-end dining venues, and even Minneapolis’ iconic First Avenue music venue, bringing cannabis culture into the mainstream.

The anticipated full rollout of Minnesota’s recreational cannabis market in 2025 has generated high interest. The state received approximately 1,800 social equity “pre-applications” for one of 282 licenses, indicating strong demand for involvement in the emerging market. Current regulations permit only Delta-8 and Delta-9 THC in hemp-derived products, while synthetic variants remain prohibited. Cannabis vape cartridges are limited to registered medical cannabis patients, maintaining distinctions between medical and consumer markets and setting clear parameters for each product type.

Minnesota’s booming market has encouraged craft breweries and retailers to innovate and diversify their product lines, adding a distinctive cultural dimension to the state’s economy. Local breweries have created THC-infused beverages that seamlessly blend into the state’s rich beer culture, offering new experiences to consumers and driving economic growth.

The hemp industry across Missouri, Tennessee, Texas, and Minnesota illustrates the diverse ways states navigate the complex landscape of hemp regulation. The rapid growth of Delta-8 and Delta-9 THC markets, alongside a burgeoning global demand for CBD, highlights the potential for continued expansion. However, with some states considering or implementing bans on hemp-derived THC products, the industry faces a delicate balancing act. These bans, while aimed at ensuring public safety, could curb innovation and pose challenges to market growth.

The evolving regulations and increasing acceptance of hemp-derived products in 2024 underscore the promise and challenges ahead. The experiences of Missouri, Tennessee, Texas, and Minnesota offer insights into the opportunities and obstacles facing the hemp industry, potentially shaping a more balanced and inclusive approach to hemp regulation across the United States.

Streamlining Hemp Operations with Technology: The Importance of Hemp Compliance Software

As the cannabis and hemp industries in the United States continue to grow, managing production, compliance, and customer engagement becomes increasingly complex. Flourish Software provides a fully integrated platform, enhanced by hemp compliance software, specifically designed to address these challenges, catering to the entire cannabis and hemp supply chain. 

This section outlines Flourish’s software and its tailored modules, each vital to streamlining operations, optimizing workflows, and ensuring regulatory compliance through advanced hemp compliance software.  

1. Cultivation Management  

Flourish’s Cultivation Module, supported by hemp compliance software, guides operators through the entire plant lifecycle. From propagation to harvest, the software tracks plants by individual ID, ensuring compliance with state systems while offering insights into growth stages and yields. Hemp compliance software enables users to group plants, monitor their health, and document cultivation activities with precision. This approach not only simplifies reporting requirements but also aids in managing cultivation costs and predicting outputs with greater accuracy, making regulatory compliance seamless.  

2. Manufacturing Workflows  

The Manufacturing Module, powered by hemp compliance software, facilitates the transformation of raw cannabis into finished products. With tools such as Work Orders and Bills of Materials (BOMs), the system ensures that every batch is tracked from raw material to finished product while maintaining rigorous quality control and compliance. Hemp compliance software enables businesses to create, package, and label products in a streamlined manner, ensuring that each stage in production is fully traceable and adheres to state regulations.  

3. Retail POS Integration  

Flourish’s Retail POS, integrated with hemp compliance software, is essential for dispensaries and retail outlets. It offers real-time inventory management and seamless system integration. From order intake to checkout, the system ensures that all processes meet compliance standards while supporting various payment types and managing delivery or pickup options. By leveraging hemp compliance software, retailers can maintain an accurate view of inventory across multiple locations, ensuring transactions are compliant, efficient, and customer-focused.  

4. Robust Analytics and Reporting  

Flourish offers comprehensive analytics and reporting tools underpinned by hemp compliance software across all modules. These tools empower users to generate customized reports for operational needs, such as plant tracking, lab testing, inventory reconciliations, and sales reporting. Hemp compliance software simplifies the effort required to remain aligned with local and federal regulations, enabling businesses to focus more on growth and less on administrative tasks.  

Empowering Informed Choices in the Evolving Cannabis Industry  

Consulting with a healthcare professional before starting any new cannabis regimen, particularly for medicinal use, is always advisable. Professional guidance ensures a safe and effective approach to incorporating cannabis into wellness routines.  

For businesses, Flourish Software, with its integrated hemp compliance software, provides a comprehensive platform to support the unique demands of the cannabis and hemp industries. By streamlining cultivation, manufacturing, and retail operations, this technology enables businesses to meet regulatory requirements, optimize workflows, and uphold high-quality standards. In a rapidly evolving market, hemp compliance software is indispensable, helping businesses remain competitive, adaptable, and aligned with industry advancements.