Why it is important to deregulate the market for technical hemp

On December 21, 2023, the Parliament finally adopted draft law No. 7457, which is awaiting the President’s signature. The document should change the approach to the regulation of the technical hemp market so that it corresponds to global practice and EU legislation.

Deregulation transforms hemp into a common agricultural crop without law enforcement oversight.

Hemp is an important economic resource

The USA is a long-time leader in the production of hemp products. Even the first president of the United States, George Washington, was a hemp farmer.

During World War II, the USDA produced the film “Hemp for Victory” to encourage the public to grow the crop to support the war effort. Fibers were used to make parachutes, ropes, shoes and clothes.

The result – during the post-war crisis, many small farmers were able to survive thanks to the cultivation of the hemp plant (Cannabis). In 1950, this agricultural crop gave US farmers a profit of about 1 billion dollars.

Thanks to the development and liberalization of legislation for the cultivation and processing of technical hemp, taking into account its cultivation without the use of plant protection products and with low water consumption, the world markets are constantly growing.

IMARC Group estimates that the global market for industrial hemp will reach $5.4 billion in 2023 and will grow to $19.7 billion by 2032, with a CAGR of 15.1% during 2024-2032.

Why is this not the case in Ukraine?

Due to strict regulation, technical hemp in Ukraine is equated with narcotic substances. This hinders the development of the market, which is promising for the state, in particular due to the potential of using hemp products to supply the army.

Ukrainian varieties of hemp have a low level of tetrahydrocannabinol, a high percentage of fibrous stems and can be used in the military industry. Natural canvas is produced from hemp fibers, from which textiles can be made, including for use in the military sphere. It is durable, antibacterial and mold resistant.

In the Zhytomyr region, kikimores and military footwear – berets and sneakers – are already being produced from hemp fiber for the Ukrainian military. Composite materials for parts of the aviation industry can also be made from hemp.

For example, the Canadian company Hempearth developed the world’s first “hemp” aircraft, Hemp. Its advantage is that it is lighter compared to aluminum or fiberglass. The result is fuel savings. Ukrainian aircraft designers should use this important experience.

In addition, in 2015, the National Academy of Agricultural Sciences investigated the use of hemp components for the production of gunpowder. Scientists have proven that such powder has strong ballistic characteristics and is resistant to moisture.

Ukrainian entrepreneurs produce flour, protein and oil from hemp, as well as high-calorie energy bars that are supplied to the military. Ropes are made from hemp fibers, which are used in insulation, decoration and decoration of premises, for rescue purposes and insulation of pipelines.

Among natural fibers – linen, cotton, silk, wool, ramie – hemp fiber is the strongest, which is why it is still used for the production of ropes, ropes and tarpaulins. However, the main producing countries are Canada, China and France. By developing its own production, Ukraine can compete with them.

The draft law is a key to market development

With the development and deregulation of the hemp production market, Ukraine can become a leading exporter of products with high added value. In Ukraine, the issue of regulating the circulation and use of cannabis needs to be resolved long ago.

BRDO has been investigating the market for technical hemp since 2020. The result was the green paper The Market for Technical Hemp. Farmers’ interest in this market is due to the high profitability of hemp and the demand for hemp products.

This market is controlled by the Ministry of Internal Affairs, the State Medical Service and the Ministry of Health, and should be controlled by the Ministry of Agrarian Policy.

The Ministry of Internal Affairs gives permission for the use of premises intended for the circulation of narcotic drugs, psychotropic substances and precursors, to which technical hemp is unjustifiably included, and controls crops. The State Medical Service issues a license for the cultivation of hemp and sets annual quotas for its cultivation.

Revision of state regulatory instruments will make the sector attractive for investment and give impetus to the development of hemp production.


The material was initially published in the “Ekonomichna Pravda