A hemp farm is an agricultural operation that grows Cannabis sativa plants containing less than 0.3% total THC by dry weight. That legal threshold is what separates hemp from marijuana under U.S. federal law, even though they’re varieties of the same species. Hemp farms produce raw material for a surprisingly wide range of industries, from textiles and construction to food supplements and CBD products.
Hemp vs. Marijuana: The Legal Line
Hemp and marijuana look similar because they are the same plant species. The distinction is purely chemical. Hemp must contain less than 0.3% total THC on a dry weight basis. Marijuana plants, by contrast, can contain 25% THC or more. A 2025 amendment to federal law tightened this definition to include all forms of THC, not just delta-9 THC, closing a loophole that had allowed some intoxicating hemp-derived products onto the market.
This chemical boundary has real consequences for farmers. Every hemp crop must be tested by a sampling agent within 30 days of harvest. Samples are taken from the top five to eight inches of the flowering plant, and results must meet a 95% confidence level that no more than 1% of plants in a lot exceed the THC limit. If a crop tests “hot,” meaning it exceeds 0.3%, the farmer may be required to destroy it.
Three Types of Hemp Farming
Not all hemp farms look the same. The crop is grown for three distinct purposes, and each one involves different plant varieties, growing methods, and harvest equipment.
Floral Hemp (CBD)
This is by far the most common and most valuable type. In 2024, floral hemp grown outdoors in the U.S. was worth $386 million, accounting for more than 90% of the total hemp market. These farms grow plants for their flower tops, which are rich in CBD. The flowers end up in supplements, cosmetics, tinctures, and edible products. Harvest happens between September and mid-October, when the tiny hair-like structures on the flowers (called pistils) turn from white to orangish-brown and the resin glands become milky or amber under magnification. On smaller farms, workers often cut plants by hand with sickles and remove the flowers individually. Larger operations use modified tobacco or nursery harvesters.
Fiber Hemp
Fiber hemp is grown tall and dense, harvested for the long strands in its stalks. These fibers go into textiles, garments, absorbent materials, and increasingly into construction products like hempcrete. Fiber hemp is cut in late August to early September, roughly 70 to 100 days after planting, once plants reach full height and the lower leaves begin yellowing. Farmers use sickle bar or disc mowers to cut the stalks, then leave them lying in the field for two to six weeks in a process called retting. During retting, natural moisture and microbes loosen the fibers from the woody inner core of the stalk. After retting, the stalks are baled at or below 16% moisture and stored in dry conditions. A later step called decortication mechanically separates the usable fiber from the inner hurd. The total value of U.S. fiber hemp production in 2024 was $11.2 million.
Grain Hemp
Grain hemp is grown for its seeds, which are pressed for oil, dehulled for food products (hemp hearts), or used whole in animal feed and nutritional supplements. Seeds are also a source material for soaps, shampoos, and lotions. Grain hemp is typically harvested from mid-September to early October using a standard combine harvester with some modifications. Timing is critical: seeds are ready when 70 to 80% have turned from green to brown and feel firm. The grain comes off the combine at 12 to 18% moisture but must be dried down to about 8% within hours, because hemp seed goes rancid quickly. It’s stored in clean grain bins below 75°F. U.S. grain hemp production was valued at $2.62 million in 2024, the smallest of the three segments.
What Hemp Needs to Grow
Hemp is adaptable but not forgiving of poor soil drainage. It grows best in well-drained soils with a pH between 6.0 and 7.0 and does poorly in heavy clay or waterlogged ground. Most hemp in the U.S. is planted from May to early June, though some short-season Canadian varieties can go in as late as mid to late June and still mature before frost.
Hemp is a short-day plant, meaning it only begins to flower when daylight drops below about 12 hours. This makes planting date and latitude important factors in planning a harvest window. CBD hemp is often started as transplants in a greenhouse and then moved to outdoor rows with black plastic mulch and drip irrigation, since each plant needs individual attention to maximize flower production. Fiber and grain hemp, on the other hand, are typically direct-seeded in dense rows more like a traditional grain crop.
Licensing and Compliance
You cannot legally grow hemp without a license. Under the USDA’s Domestic Hemp Production Program, any person or business intending to produce hemp must hold a valid license before planting. The application requires contact information, the location of every production site, and a criminal history report dated within 60 days of submission. Anyone convicted of a drug-related felony under state or federal law within the past 10 years is disqualified.
Licenses are valid for three years, expiring on December 31 of the third year. Some states run their own hemp programs with additional requirements, while others operate under the USDA plan directly. Beyond obtaining a license, farmers must report crop acreage to the Farm Service Agency, maintain detailed records, submit annual reports, and coordinate pre-harvest THC testing. If a crop exceeds the legal THC limit, the farmer must file a disposal or remediation report. The USDA offers a free online Hemp eLearning Platform covering each of these compliance steps.
The Economics of Hemp Farming
Total U.S. hemp production reached $417 million in 2024, up 46% from the previous year. That growth was driven almost entirely by floral (CBD) hemp, which jumped 43%. Fiber held roughly steady, and grain grew a modest 13%.
These numbers reflect revenue, not profit, and the gap between the two can be significant. CBD hemp commands the highest prices per acre but also carries the highest risk: labor-intensive harvesting, expensive drying and extraction, volatile wholesale prices, and the ever-present possibility that a crop tests over the THC limit and must be destroyed. Fiber and grain hemp have lower per-acre revenue but benefit from more mechanized production and more predictable markets. One persistent challenge across all three types is limited processing infrastructure. Farmers often struggle to find nearby facilities for decortication, grain cleaning, or cannabinoid extraction, which adds transportation costs and can delay payment.
Environmental Profile
Hemp’s environmental appeal is one reason it attracts interest beyond its commercial value. Industrial hemp absorbs a substantial amount of carbon dioxide as it grows. Conservative estimates from research compiled for the Australian Parliament put absorption at roughly 10 tonnes of CO2 per hectare, with some studies measuring as high as 22 tonnes per hectare depending on variety and growing conditions. That translates to roughly 4 to 9 tonnes per acre, placing hemp among the more effective crops for carbon capture on agricultural land.
Hemp also grows densely enough to suppress weeds, which can reduce herbicide use. Its deep taproot helps prevent soil erosion and can improve soil structure for future crops. These traits make it a useful rotation crop, though it is not a silver bullet: hemp still requires nitrogen inputs, and the environmental benefits of the final product depend heavily on how (and where) it gets processed after leaving the farm.