You may have heard the term “green rush” thrown around recently, and it may have been explained to you as the explosive growth of the marijuana industry. I’m here to tell you that while the marijuana industry is growing fast, it a small portion of a much larger story.

Marijuana by the Numbers

With more states coming on line every year, it is no doubt why the legal marijuana industry is catching the eye of investors and entrepreneurs alike. With over 33 states with some sort of legal marijuana laws, legal sales have been booming.

All in all, in 2018, marijuana was a $10.4 billion industry in the US. This is big money. For reference, the US coffee industry came in at $14.4 billion for the same time period.

That’s pretty impressive, and it gets better. Several speculators place marijuana anywhere between $19 billion and $50 billion industry in the US by 2022. If you were looking for amazing growth, there is no doubt that marijuana is a wise investment.

The Underdog

In 2018, the Federal Farm Bill reclassified all Cannabis Sativa plants that contain 0.3% THC or less by dry weight as Industrial Hemp. While this distinction is a legislative as opposed to a botanical, it has big implications for the industry. Basically, states are now allowed to permit the cultivation, processing, and sale of cannabis (albeit low THC cannabis).

Without the psychoactive properties of marijuana, hemp isn’t as exciting to the outsider. Hemp may come across as the less glamorous cousin, struggling to get attention and living in marijuana’s shadow. For those in the know, however, hemp is anything but boring.

CBD, a cannabinoid in the cannabis plant, has mounds of research in peer reviewed journals highlighting the efficacy of the cannabinoid. While CBD is better with THC via a concept called “the entourage effect,” there are those that cannot have THC in their system due to limitation with their employers (CDL drivers, pilots, government employees, etc). In addition, due to decades of misinformation and political propaganda, there are those that simply wouldn’t use THC in any way, shape, or form, as they associate it with “drug culture.”

Here we are left with folks who desire the positive impacts that cannabinoids have on the human body and may not want to (or can’t) consume THC matched with a federally legal avenue. Here we begin to see why hemp is a much larger portion of the green rush than most realize.

Hemp by the Numbers

In 2018, hemp was a $1 billion industry. That may not seem impressive when compared with marijuana, but you have to dig a little deeper. We have only had 3 season of hemp, and in that short amount of time, we’ve seen triple-digit growth year over year.

While marijuana is forecasted to be between $9 billion and $50 billion by 2025, hemp is projected to be $23 billion by 2022. (I couldn’t find projections out to 2025 to match evenly). Hemp will represent anywhere between “more than double” to “at least half” of the cannabis market in a few short years.

You may still be thinking “yeah, but the possible upside is much larger for marijuana.” Indeed it is, but consider this: through legalization, the data shows that we are not getting many, if any, new consumers for marijuana. That means the existing market is primarily comprised of current consumers.

Let’s imagine best-case scenario for marijuana. What if marijuana became federally legal, all states had positive recreational marijuana laws, and all current consumers switched over to only buying legally purchased cannabis? Luckily, The Motley Fool already performed this exercise for us.

The result? If marijuana was legal today and current users continued at the same rate, it would be a $41 billion industry by 2028. If current user adoption from legal states persists, we can logically assume that this is a close-to-realistic cap on the market potential in the US.

Hemp (CBD, more specifically), has all of the positives known and unknown of the rest of the at least 85 cannabinoids, sans THC. Most current CBD consumers were not consumers a mere 3 years ago. If we project that same growth over several years, and consider the fact the the entire health, wellness, and beauty market are all possible consumers, we can see the hemp market is much, much larger over the long haul.

It’s Not a Competition

While we have pitted hemp against marijuana in a strange cannabis cage match for this blog post, it is important to remember that the two industries aren’t really in competition. In fact, you could argue that, like CBD and THC, hemp and marijuana make each other exponentially better. As marijuana use becomes more normalized and health benefits become common knowledge, staunch critics may be willing to try cannabis without the psychoactivity (hemp). And, as more and more folks consume hemp derived products and realize that cannabis isn’t the devil it is made out to be, we may see an increase of folks willing to try THC for what ails them.

Bottom line: the green rush isn’t about just marijuana, and it isn’t about just hemp. It’s about cannabis in all forms, and human’s long-term relationship with the plant. More succinctly, it is about abandoning our short-term prohibition of a plant that was once integral to our daily lives, and instead, embracing a relationship long lost.