Ukraine: New opportunities in growing industrial hemp and legalization of medical cannabis

Nieuwsbericht | 25-03-2025 | 16:17

From heritage to prospects for the development of industrial hemp growing

According to the Association for the Development of Flax and Hemp Growing, industrial hemp is grown in over thirty countries around the world. The largest volumes of raw materials and products are in Asian countries, where about 75% of global production is concentrated. Europe has only 15% share, but it plays an important role in the market due to the high added value of processed products. For Ukraine, hemp exports to the EU are profitable, because the import duty on this crop is zero. Currently, the production of industrial hemp in Ukraine is limited, and the area sown annually is 2-4 thousand hectares. Whereas during  Soviet times, the area under hemp in Ukraine reached 120 thousand hectares, and there were 35 processing plants, of which only three are currently operating.

“I don’t like to compare present with the Soviet period, but then the area under hemp in Ukraine used to be much larger. We had rope factories that supplied products to shipbuilding enterprises in Europe. There were also gunpowder factories that were used in the production of cellulose from industrial hemp. This strategy was and remains important for our country,” said Andriy Alechko, director of the management company of the Hempy UA Industrial Park, a member of the Public Organization “Association for the Development of Flax and Hemp Growing in Ukraine.”

Previously, the Ministry of Agrarian Policy forecasted  that after the adoption of the law on state regulation of the circulation of hemp plants, the area of ​​crops could increase to 8 thousand hectares. Andriy Alechko believes that this is quite realistic for Ukraine now, moreover, even one agricultural producer can process such volumes. “To build a plant for the production of hemp products, we need only 7-8 thousand hectares of industrial hemp crops. These are not such large areas for Ukraine. 15 years ago, we did not even grow soybeans, and last year we sowed 1.8 million hectares and harvested a record yield. Therefore, even one agricultural producer can provide 8 thousand hectares for the state,” the expert assured. However, the Institute of Bast Crops is wary of making hasty forecasts due to environmental, political and military risks. Primakov believes that the real areas that can be sown this year are about 4.5 thousand. Ha.

“It makes no sense to simply pass a law – we need to change the approach. If farmers are well aware of the processes and all stages, then it will be possible to grow hemp more effectively, because the farmer must be ready for new requirements,” Primakov emphasized. According to him, sometimes you have to wait more than one year for the producer to finally make a decision about growing hemp. And therefore, in 2026, if everything is more or less normal, the area under this crop may indeed increase, but currently there are only preconditions for an increase in the area to 4.5 thousand hectares. Some farmers emphasize that only some regions of the country, where humidity is higher, are suitable for growing industrial hemp. Andriy Alechko noted that this is not relevant now, because the main task is to preserve moisture in the early stages of plant development, when the first 5-6 leaves appear. “This year we plan to experiment with crops in the southern regions. "Last year, they were sown in Vinnytsia and Cherkasy regions, that is, in the center of Ukraine. This crop needs basic care, but it does not require anything special," added Alechko.

According to Oleg Primakov, Ukraine has one of the best varietal potentials of hemp in the world. "If we talk about varietal potential, it is possible to choose the variety and the technology that will allow hemp to be grown in any corner of Ukraine. So we can always help farmers choose the variety, technology, determine the sowing dates and other nuances of hemp cultivation," Primakov added.

New hemp registration system

When it comes to the production of hemp for medical purposes, it is worth understanding that cannabis is divided into several types - depending on the content of the psychoactive substance tetrahydrocannabinol (THC). Until recently, in Ukraine, the permissible THC content for industrial hemp did not exceed 0.08%, which, according to the Office of Effective Regulation (BRDO), significantly limited Ukrainian producers in competing on the international market. In other countries, such as the USA, Canada, the EU and China, the permissible THC level is 0.3%. Since August 2024, changes in legislation have come into force in Ukraine, which increased the permissible THC level in industrial hemp to 0.2%, with the prospect of reaching the level of 0.3% in 2027.

In addition, the law abolished many bureaucratic obstacles. Andriy Alechko noted that now industrial hemp can be grown without licenses from the State Medical Service and without permits from the Ministry of Internal Affairs. “Previously, the process of “entering” this business took much longer and was limited by the deadlines for submitting applications. Now the reform is underway, and the launch of the “e-Hemp” system has become an important step forward,” the expert added. So, now, to legally grow industrial hemp, an agriculturist must register in the “e-Hemp” registry, and the raw materials he grows must undergo two examinations for THC content. The first examination is carried out during flowering, the second before harvesting. Both checks are carried out only by certified forensic laboratories, of which there are only two in Ukraine. Some agrarians are concerned about the likely duration of the examination process, since part of the crop may lose its market value. "If during the first examination, THC exceeds the permissible norm, a second examination should be conducted 10 days after flowering, but if the THC level is within the normal range, a second check is not required," assured Alechko. He admitted that the number of such laboratories in Ukraine is indeed limited. Both are state-owned, which allows avoiding interference of private structures, in particular, deliberate underestimation of the THC level.

The Ministry of Agrarian Policy and Food announced the creation of the e-Hemp registry to facilitate the registration of agricultural producers, systematize data, and speed up the processing of applications. “Automatic validation of data in registration forms reduces the likelihood of errors when entering information,” Inna Dranytsya, Head of the Department for the Development of Digital Transformations in the Agricultural Sector of the Ministry of Agrarian Policy, told Ukrinform. Thanks to integration with the Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Organizations, the State Register of Real Property Rights to Real Estate, and the State Land Cadastre, the system also allows for cross-checking of data, which reduces the administrative burden and minimizes bureaucratic delays in registering agricultural producers. A unique element in the system is an interactive map that will allow farmers to track information about their land plots where hemp is grown. The map will allow monitoring the area of ​​crops, yield, and production volumes. "The ministry will have access to an assessment of the general situation, in particular, to data on the yield of various hemp varieties, which will allow us to determine the most productive of them, but this information will not be public," Dranytsia adds.

The system will also help detect violations: if the average THC value for a particular variety exceeds the permissible norm for a year, the ministry will inform the National Police about this. In case of a repeat violation next year, the variety may be banned for use in industry. According to the representative of the Ministry of Agrarian Policy, since the launch of the system, four legal entities have begun the registration process, including, in particular, the Institute of Bast Crops. “The interface is clear, and the databases are being updated. So for those legal entities that operate legally, there will be no problems with registration. I cannot say about any unaccounted points at the moment, because we have not yet gone through the entire registration cycle, and so far the system has shown itself on the positive side,” Oleg Primakov noted. According to Inna Dranytsia, the Eastern Europe Foundation is the implementer of the international project, fully financing the creation and implementation of software for the information and communication system of the register of legal entities “e-Hemp”. Also, specialists from the Ministry of Digital Transformation created the Diya.Engine platform, and IPRSA experts helped in discussing the idea, creating the technical specifications, and communicating with developers.

"We are grateful to all partners for their help. We express special gratitude to the Eastern Europe Fund, which helped in the implementation of not only the idea, but also in its implementation within the regulatory framework. We understand that the state should direct funds to more important industries, so the Fund, in particular, fully financed this project," the Ministry of Agrarian Policy noted. Dranytsia predicts that in the coming weeks the number of registered farmers will increase, so Ukraine has every chance of becoming a leader in the cultivation of industrial hemp.

Hemp cellulose – a new opportunity for the development of the industry

Farmers can receive income from industrial hemp already at the early stages of production, but for this it is necessary to clearly determine what they want to focus on. Oleg Primakov notes that by growing hemp only for grain, you can get about 70-80 thousand UAH per hectare (1500 – 1800 EUR), with investments in production of 30-40 thousand UAH (700 – 900 EUR), which ensures good profitability. If the farmer also sells seeds, profitability can increase by 20%. So, the larger the area of ​​crops, the higher the profit potential, in particular due to the contracting, etc. The scientist noted that to increase profitability, farmers can start processing raw materials, for example, into seeds. According to him, producers turn to the institute for help in forming individual production models. "For those who are engaged in conventional agricultural crops, growing hemp will not require significant investments in equipment. Some of the machines and units required for harvesting and processing can be used from conventional agricultural crops - combine harvesters and equipment for harvesting hay. Specialized equipment is needed only for growing hemp for fiber. Only a few farms in Ukraine currently use it," Primakov added.

Regarding the overall profitability of the industry, Andriy Alechko claims that such activity is profitable. He also acknowledges the existence of problems, in particular with modern harvesting equipment, but enterprises that are already engaged in the cultivation of industrial hemp are solving these issues. There are already several enterprises in Ukraine that manage primary processing. The potential for the development of deep processing is huge, which is what the Hempy UA industrial park is focused on. Alechko also noted that there is a company in Ukraine that supplies hemp fiber to the European Union, in particular to Lithuania, Belgium, the Netherlands and Germany. According to him, Europeans are interested in primary processing products. You cannot transport hemp straw in large volumes, so at least some primary processing is important. This will allow Ukraine not only to supply raw materials, but also to produce products with (event little) added value, in particular sphagnum. "For example, the cost of trust (hemp straw, - ed.) ranges from 120-130 euros per ton, while primary processing products, such as hemp fiber, can bring up to 600-650 euros per ton, and hemp straw - from 300 euros per ton. In addition, this product is more promising for our farmers, because there are no quotas and duties on them in Europe," Alechko noted.

In general, industrial hemp in Ukraine is used to produce a variety of products, including food (oil, flour, milk, bran, cookies, chocolate), cosmetics (soap, creams), textiles, clothing, footwear, hats, reusable masks, hemp fur, and even building materials. At the same time, this is only part of the possible application, because, according to Alechko, hemp is of strategic importance for the country, since it can be used to produce a key product for gunpowder production - cellulose. “From industrial hemp, namely from trinitrocellulose made from hemp cellulose, you can get very high-quality gunpowder. By adding cotton powder, the technology can be improved. But hemp really makes excellent cellulose,” Alechko noted. Hemp pulp factories are already operating in France, because it’s not just about gunpowder, but also about paper and even the automotive industry, which require this component. “For Ukrainian farmers, the benefit is that profits can reach up to $1,000 per hectare. This is an excellent indicator for today, and we are on the way to it. We are confident that this can be achieved. It is important that hemp is a strategic crop,” the expert added. Alechko predicts that in 2-3 years Ukraine will be able to ensure such production, but for this it is necessary to increase the area of ​​crops and improve primary processing technologies. Primakov also noted that the primary processing market has significant potential that has not yet been used. Deep processing requires significant investments. According to him, there are ten enterprises in Ukraine that are engaged in primary processing to one degree or another, and there are significant opportunities for development here. “The best option would be to launch at least one pulp mill on the market that would produce hemp fiber products for paper production. This would be a breakthrough, because raw materials from 5 thousand hectares of industrial hemp can provide the operation of such a mill. This opens up new opportunities for the industry,” Primakov added. He also emphasized the importance of state support, especially in improving and implementing legislation and providing enterprises with state orders. The first steps have already been taken, but many issues still need to be resolved in synergy between the state, business, and farmers.

Author: Halyna Tybin, Kyiv

Original article in Ukrainian Є коноплі - буде канабіс: як і для чого Україна відроджує промислове коноплярство