By Mark TurnerIntroduction
The global hemp industry is experiencing significant growth, driven by increasing demand for sustainable materials, plant-based nutrition, and carbon-negative construction products. The UK market, while still developing compared to established producers in France and the Netherlands, presents substantial opportunities for farmers and investors willing to enter early.
It is important to note from the outset that the UK industrial hemp market is focused on fibre and seed. As clarified by the Home Office Drug Licensing Factsheet, an industrial hemp licence does not permit the production of CBD or other cannabinoids. The analysis in this article therefore focuses on the legally permitted market segments. For a full overview of the uses of hemp, see our hemp uses guide.
Market Size and Growth
The global industrial hemp market (excluding CBD, which requires separate licensing) is estimated at approximately $6.4 billion in 2025, with projections for strong double-digit growth driven by sustainability mandates and material innovation. Europe is the largest producing region, led by France with over 20,000 hectares under cultivation.
The UK currently cultivates an estimated 800+ hectares of industrial hemp, a figure that has been growing steadily. The extension of the licence period from 3 to 6 years (effective from the 2026 season) provides greater certainty for farmers and is expected to accelerate adoption. For details on the licensing process, see the Home Office application guidance.
Estimated UK Hemp Cultivation Area (Hectares)
UK Market Position
Key Market Segments (Permitted Under Industrial Hemp Licence)
UK Industrial Hemp Market by Segment (Estimated 2026)
Textiles and Fibres (35%)
The largest segment for UK-grown industrial hemp. Hemp bast fibre is used in textiles, automotive composites, insulation, and non-woven materials. Growing demand from fashion brands seeking sustainable alternatives to cotton (hemp requires approximately 50% less water) is a key driver. Hemp fibre is also increasingly used in technical applications such as biocomposites for the automotive industry.
Food and Nutrition (30%)
Hemp seeds are a nutritional powerhouse, rich in omega-3 and omega-6 fatty acids, complete protein (containing all 9 essential amino acids), and minerals. The UK health food market for hemp seeds, hemp oil, and hemp protein powder is growing rapidly. This segment uses only the seed, which is a permitted product under the industrial hemp licence.
Construction Materials (25%)
Hempcrete (a mixture of hemp shiv and lime) is a carbon-negative building material with excellent thermal and moisture-regulating properties. With the UK construction industry under pressure to decarbonise, hempcrete and hemp insulation represent a major growth opportunity. Learn more about hemp's environmental credentials on our impact page.
Animal Bedding and Feed (10%)
Hemp shiv (the woody core of the stem) makes excellent animal bedding due to its high absorbency. Hemp seed cake (a byproduct of oil pressing) is a nutritious animal feed supplement.
CBD Is Not a Permitted Market Under an Industrial Hemp Licence
UK Market Opportunity
Several factors make the UK market particularly attractive for industrial hemp cultivation and investment:
| Factor | UK Advantage | Impact |
|---|---|---|
| Regulatory Reform | Precision Breeding Act 2023 enables gene-edited varieties | Faster development of superior cultivars |
| Extended Licences | 6-year licence period from 2026 season | Greater certainty and investment confidence |
| Climate | Temperate maritime climate ideal for hemp | High-quality fibre and reliable yields |
| Sustainability Goals | Net Zero 2050 commitment | Carbon credit potential and green procurement mandates |
| Research Base | World-class agricultural research institutions | Innovation leadership in precision breeding |
"The UK has the potential to become a European leader in hemp cultivation, particularly with gene-edited varieties designed to guarantee compliance and quality."
Investment Opportunity
Learn about SEIS-eligible investment in UK hemp innovation and the potential returns from backing precision breeding technology.
Read MorePricing and Returns
Hemp can offer attractive gross margins compared to conventional arable crops. The table below shows indicative pricing and returns for the permitted product categories. Use our revenue calculator to model returns for your specific situation.
| Product | Indicative Price Range | Estimated Gross Margin/ha |
|---|---|---|
| Hemp Grain (food grade) | £400-600/tonne | £600-1,200 |
| Hemp Fibre (bast) | £200-400/tonne | £400-800 |
| Hempcrete/Shiv | £150-250/tonne | £300-600 |
| Dual-Purpose (seed + fibre) | Combined value | £800-1,500 |
Premium Pricing for Gene-Edited Varieties
Future Outlook
The UK industrial hemp market is poised for significant growth over the next decade, driven by several converging factors:
- Regulatory clarity: The Precision Breeding Act 2023 enables the development and commercialisation of gene-edited hemp varieties.
- Extended licence periods: The move to 6-year licences from the 2026 season provides the certainty needed for long-term investment.
- Sustainability demand: Corporate net-zero commitments are driving demand for sustainable materials in construction, textiles, and packaging.
- Technology advances: Gene-edited varieties from Precision Plants eliminate THC compliance risk, the single biggest barrier to adoption.
- Government investment: In February 2026, Defra and Innovate UK announced £21.5 million in funding for precision breeding projects, including £912k to Precision Plants for climate-resilient hemp development.
Government Backing Confirmed
Projected UK Hemp Cultivation (Hectares)
For more information on getting started, read our complete guide to UK hemp farming, explore our hemp varieties, or learn about the licensing requirements.
