Russia Proposes Eightfold Increase in Industrial Hemp Cultivation

Milena Alexandrova, CEO of the industrial hemp company “Konoplex,” has proposed increasing the area of industrial hemp cultivation in Russia by eight times to meet the demand for plant-based raw materials.

40 Billion Rubles Needed for the Hemp Industry

According to the Agro-Industrial Association of Hemp Growers, in 2021, industrial hemp was sown on 13,300 hectares in Russia, a 23% increase compared to 2020. The Ministry of Agriculture predicts further growth, estimating that by 2025, hemp will be cultivated on 20,000 hectares.

Alexandrova believes that the development of hemp cultivation in Russia is progressing too slowly. She claims that to meet domestic demand for raw materials, hemp needs to be grown on 100,000 to 110,000 hectares—meaning the area should increase by at least 7.5 times.

Russia’s Potential as a Global Leader

Alexandrova wants Russia to reclaim its status as a world leader in the industrial hemp sector. She argues that the country has a chance to take a leading position in the international market due to its vast arable land and a climate suitable for hemp cultivation. However, this would require an investment of about 40 billion rubles, which would allow the sown area to reach 100,000 hectares.

What Could Happen if Hemp Farmland Expands?

The United States has demonstrated what can happen during a “hemp rush.” In 2018, the U.S. federal government lifted the ban on industrial hemp varieties, prompting many farmers to try their luck with the crop. In 2019, American farmers planted hemp on a massive 78,914 hectares. However, by 2020, the area dropped to 41,278 hectares, and by 2021, it had fallen to 16,187 hectares—a nearly fivefold decrease in just two years.

This decline was due to an overproduction crisis. Eighty percent of farmers grew hemp for CBD extraction, but it turned out that only 1,141 hectares were needed to meet the demand for cannabidiol, compared to the 12,950 hectares planted in 2021. The market was flooded with hemp, and the price of high-CBD hemp biomass plummeted threefold from $1,600 to $589 per kilogram (from 91,248 to 33,591 rubles) between December 2020 and December 2021.

Is There Really Unmet Demand in Russia?

Alexandrova did not specify which hemp-based products are in short supply in Russia. We could not find any reports or studies on the dynamics of the legal hemp product market in Russia, so it is difficult to draw conclusions about changes in the market situation.

However, logically, it seems that Alexandrova is overestimating the demand for hemp. The U.S. population is 329.5 million, yet American businesses could not sell all the products made from hemp grown on 78,914 hectares. Russia’s population is 144.1 million, so domestic consumption of hemp products should be at least half that of the U.S.