For years, China has been the primary source of hemp imports into the United States. However, on Wednesday, China entered into a new trade agreement with the U.S. which requires it to buy more of the non-psychoactive marijuana crop from the U.S.
Hemp was federally legalized in the U.S. under the 2018 Farm Bill. On Wednesday, China signed an international trade agreement, which requires them to import hemp on a large scale as well as other agricultural products listed in the contract.
According to the accord, both parties acknowledge that the agreement would result in trade and economic structural changes which would help China to open up its economy and improve the country’s trade regime, and this would in turn lead to improved trade flows, as well as significant increase in export of goods and services from the U.S. and other countries to China.
If you look at the high degree of complimentary trade between the U.S. and China, both parties believe that expanding trade is ideal for improving their mutual trade relationship, maximum allocation of resources, economic restructuring, and sustainable economic development. They both recognize that the U.S. can produce and supply high-quality goods and services, which are competitively priced. Besides that, China needs to increase the importation of quality goods and services that are relatively affordable to satisfy the rising demand from Chinese clients.
Although the agreement does not specify the extra amount of hemp China would be importing, the document signed stated that they must spend a minimum of $12.5 billion more than they did in 2017 on the 200 or more agricultural products listed in the contract, inclusive of hemp plants, for the year 2020. And in 2021, China must spend a minimum of $19.5 billion more.
Among the agricultural products to be imported by China, the agreement included a form of marijuana plant referred to as “true hemp,” which is unprocessed Cannabis Sativa L.
Jonathan Miller, general counsel of the U.S. Hemp Roundtable, said that the inclusion of hemp in the trade deal is a worthy development.
He further said that importation of hemp by China would provide American hemp farmers with a new market for the crop at a time when many are getting concerned that prices will plummet due to excess production. He also noted that previously, the U.S. was importing the hemp from China, which was being criticized for its poor quality.
China has been growing hemp for thousands of years, but the country started expanding the hemp industry recently. The delay in expansion was due to stringent anti-drug laws, but as the legalization of hemp production has spread internationally, more businesses are venturing in the industry, especially the CBD market.
The hemp industry in the U.S. is booming, and the lawmakers are working together with the regulators to make sure that growers have all the resources needed to meet the increasing consumer demand for CBD products.
According to Hemp Industry Daily, last year, the USDA clarified in its guidance that hemp seeds and plants could be imported from other countries, and the U.S. imported approximately $3.3 million worth of hemp from China.
This news of the Chinese market for U.S. hemp may be seen as good news by hemp-related companies like HTC Extraction Systems (TSX.V: HTC) (OTCQB: HTPRF) since farmers will have a bigger market to turn to when local demand peaks.
About HempWire
HempWire (HW) is a dedicated information provider focused on (1) aggregating hemp-related news, (2) issuing HempNewsBreaks designed to update investors on the latest developments in the hemp market, (3) enhancing corporate news releases, (4) providing full-service distribution and social media offerings to public and private client-partners and (5) designing and implementing all-inclusive corporate communication solutions. HW is strategically positioned within the rapidly expanding hemp sector with a team of journalists working to help a growing roster of public and private companies reach a wide audience of investors, consumers and members of the media. We leverage a vast network of more than 5,000 key syndication outlets to deliver unparalleled visibility, recognition and content to the hemp industry. HempWire (HW) is where HEMP news, content and information converge.
To receive instant SMS alerts, text HEMPWIRE to 21000 (U.S. Mobile Phones Only)
For more information please visit https://www.hempwire.com
Please see full terms of use and disclaimers on the HempWire website applicable to all content provided by HW, wherever published or re-published: https://www.hempwire.com/Disclaimer
Do you have a questions or are you interested in working with HW? Ask our Editor
HempWire (HW)
Denver, Colorado
www.hempwire.com
303.498.7722 Office
Editor@HempWire.net
HempWire is part of the InvestorBrandNetwork.
