Industrial Hemp Market to Exceed $7B by 2031, Driven by Construction and Wellness

LOS ANGELES – The global industrial hemp market is on track to nearly double in value over the next five years, according to the latest report by Mordor Intelligence that projects the market to grow from $3.57 billion in 2026 to $7.95 billion by 2031, reflecting a CAGR of 17.36%. That trajectory places industrial hemp among the faster-growing agricultural commodities on the planet, and the underlying story is more structural than speculative.

The forecast cuts across multiple end-use categories. Robust demand spans food and beverages, wellness supplements, sustainable construction materials, textiles, and animal feed, with the construction sector drawing particular attention from investors and policy analysts alike. Industrial, personal care, construction and animal-feed categories collectively comprised 74.32% of 2024 revenue, expanding faster than legacy food and supplement channels at an 18.46% CAGR.

No single application has generated more institutional interest than hempcrete. The hempcrete market grew from $668.13 million in 2024 to $761.87 million in 2025 and is expected to continue growing at a CAGR of 14.33%, reaching $1.49 billion by 2030. Commercial builders value hempcrete’s low thermal conductivity, enhancing occupant comfort while avoiding petrochemical insulation. Meanwhile, the sustainability math is compelling for developers working within carbon-reduction mandates: each cubic meter of hempcrete sequesters up to 160 kg of CO₂ during growth and curing.

In North America, net-zero building initiatives are contributing to increased adoption of hemp-based materials like hempcrete, while cannabidiol (CBD) product availability continues to expand through retail and pharmacy channels. Europe, meanwhile, has become the supply backbone for fiber-based applications. France cultivated 23,000 hectares in 2024, yielding around 28,000 metric tons of fiber, while the European Commission’s broader emissions targets [a 60% reduction in building-related emissions by 2030] continue to steer construction procurement toward bio-based materials.

For all the optimism embedded in the projections, the market is navigating a complicated regulatory moment, particularly in the United States, where the legislative floor has shifted more than once in recent months.

Section 781 of the Continuing Resolution enacted in November 2025 created the most significant changes to the regulation of hemp since the 2018 Farm Bill, introducing total-THC testing standards that folded THCA into compliance calculations and effectively targeted the synthetic cannabinoid products that proliferated through a well-known loophole. The enforcement date arrives in November 2026, and the amended law is already producing material disruption to capital formation, supply chain agreements, product development pipelines, and insurer willingness to underwrite hemp-related operations.

Industrial hemp producers are watching a separate but related legislative track: the proposed 2026 Farm Bill. House Agriculture Committee Chairman Glenn Thompson (R) filed an 802-page draft that would maintain the industrial hemp program while allowing the USDA, states, and tribes to reduce or eliminate testing requirements and background checks for producers. For fiber and grain farmers, the bill offers practical relief. For cannabinoid cultivators, the picture is more fraught.

In Europe, provisional intake guidelines for CBD are influencing the pace of Novel Food approvals, even as regulatory differences across markets persist. The patchwork remains a source of friction for companies attempting to operate across EU member states with standardized product lines.

Even as demand indicators trend upward, the supply side carries visible stress points. Investment is favoring processors with consistent quality capabilities, while smaller cultivators face ongoing pricing pressures and land-use limitations that may constrain supply expansion. Vertical integration is increasingly the differentiating factor. Intensifying competition among vertically integrated companies is pushing efficiencies in cultivation, decortication, and formulation, while new entrants focus on niche verticals such as hempcrete and hemp-derived functional foods.

Comparing forecast methodologies across research firms reveals a wide variance in headline numbers — Mordor’s $7.95 billion through 2031 sits conservatively against Grand View Research’s projection of $27.7 billion by 2033, but the directional consensus is consistent. Fiber leads product categories. North America leads regionally. Construction and wellness are the growth engines. The variables are regulatory timing and processing infrastructure.

The industrial hemp story has always been complicated by its proximity to Cannabis politics. What the current data suggest, however, is that the commodity has matured enough to decouple, at least partially, from that narrative. When the construction industry starts specifying the product in net-zero building plans and major European supply chains are commissioning new processing lines, the market is operating on fundamentals rather than sentiment.