Ken Elliott runs a hemp oilseed and fiber processing facility in Fort Benton, Montana. His company, IND Hemp, grinds up the stalky plant so that it can be used for a variety of purposes, such as snacks, grain, insulation and paper. About 20 truckloads of spent biomass lie in heaps on his property.

Elliott estimates he could make a couple million dollars if he sold this leftover stuff as livestock feed. Hemp seedcake would make a great substitute for alfalfa – rich in fatty acids, proteins and fiber. His cattle rancher buddies are hit hard by the soaring costs of hay and would love to get their hands on this alternative. One buffalo herder wanted to buy the whole lot.

But Elliot can’t sell to them. He can’t even give it away for free. That’s because when the 2018 Farm Bill took hemp off the list of controlled substances, hemp as commercial livestock feed was not approved.

The Food and Drug Administration (FDA) has approved hempseed and its meal and oil for human consumption. A variety of hemp snacks for pets are allowed on the market, because they don’t constitute the main part of the diet. But you can’t give hemp as feed to farm animals that produce eggs, meat and milk for sale, until tests prove it is safe and nutritious to pass along the food chain.

In other words, Elliott can serve hemp products to his baby grandchild. Or to a cat. But not to 2,000lbs steer. And that’s bad for the American farmer, he says. “Some of these guys have to sell their cattle and five-generation farms because they can’t afford hay and barley,” Elliott says. “Why wouldn’t you want to help them?”

Hemp industry advocates say this ban on livestock feed not only denies livestock farmers necessary relief, but is also denying the $80bn American feed sector an inexpensive product during a time of global grain shortages. And it is hindering a nascent green industry that could invigorate American agriculture while also saving the environment.

The type of hemp in question is not the flowery plant that yields CBD. The bamboo-like “industrial” variety processed by Elliott has greater potential to be a commodity. Its woody core, grain (seeds) and fiber have 25,000 uses. They include dietary ingredients, textiles, biofuel, bioplastics, mulch, lubricants, paints and construction materials.

Industrial hemp is also a dream sustainable crop. It requires less water than similar plants and sequesters carbon. It can grow in nearly every climate, with up to two harvests a year. Hemp also regenerates the soil, absorbs toxic metals and it resists pests, mold and fire.

But this sector is stymied by the federal government’s linkage of hemp to its cousin, marijuana. Both come from the cannabis sativa plant, but industrial hemp has none or negligible quantities of tetrahydrocannabinol, THC, the main psychoactive compound in marijuana.

Nonetheless, hemp is highly regulated. Growers must be fingerprinted and background-checked. They must spend thousands of dollars for tests that prove their harvests contain less than 0.3% THC. Anything above that fraction must be destroyed.

Further burdens are placed on those seeking approvals for commercial hemp livestock feed. (So far none have been granted on the federal level.) Manufacturers complain that with only a dozen FDA officials processing requests, applicants can wait up to six months for a response or for questions, which when answered require further waits. The process can take years.

“The FDA responds to requests with very resistant language that creates a long back and forth,” says Andrew Bish, a harvesting equipment entrepreneur from Nebraska who helms the Hemp Feed Coalition advocacy group. He added that funding the clinical trials to prove safety can cost hundreds of thousands of dollars.

Moreover, separate testing must be done for each species that would eat the feed. Data involving dairy cows, for instance, won’t suffice for beef cattle. Different research is required for chicken broilers and egg layers, and trout versus salmon.

The FDA approval group is “woefully understaffed with a backlog of work”, Leah Wilkinson told a webinar in August that brought together regulators, hemp companies and university researchers. She is the vice-president of public policy at the American Feed Industry Association.

“Many of these ingredients are stuck in an antiquated regulatory review process at the FDA, which has resulted in the US trailing its global competitors in bringing these products to the market.”

Regulators on both the state and federal levels defend the process, however. They say animals metabolize food differently from humans, so a person snacking on hemp seeds might process the ingredient differently than a goat subsisting on it every day.

“I understand the processors’ standpoint,” says Ian Foley, a plant regulatory official with Montana’s department of agriculture. “It’s a difficult burden to sponsor and pay for research. But the product must be beneficial as well as not cause harm. Everyone wants the safest ingredients, and I don’t think we’re there just yet.”

While the US government treats hemp as a new product, it was historically a staple crop in America from the 1600s onwards, thriving especially in Kentucky. George Washington grew it. A draft of the Declaration of Independence was on hemp paper. But the 1937 Marihuana Tax Act debilitated the once-thriving industry, and then the 1970 Controlled Substances Act essentially killed it.

With decriminalization five years ago, the industry had to jumpstart from scratch.

This has cost the US market share in a global market estimated at more $4bn and expected to grow to over $17bn by 2030. Canada, China and Europe (particularly France) are big players. The US produced merely $824m worth of hemp in 2021, the last available figures.

Stakeholders say that the animal feed issue is particularly stymying the industry.

The only way around stringent federal restrictions is to win consent on the regional level, but the products cannot be transported or sold across state lines. Kentucky has approved feeding hemp-seed meal and oil to chickens and horses. In Montana, it can be given to non-production animals. Tennessee requires informing consumers in writing if hemp adulterants are added to feed.

The Wenger Group of Lancaster, Pennsylvania, managed to get state approval to sell feed for chickens. Wenger, which produces about 2m tons of feed a year, first had to invest $400,000 to do a hemp feed study on the nearby Kreider Farms involving 800 hens and 120,000 eggs.

The data found that hemp feed produced healthy yolks and weight, with no THC residue. “It was absolutely compelling and convincing that the ingredient was safe,” says Raj Kasula, the chief nutrition officer for Wenger.

But getting the green light to sell was “unduly” time-consuming. “The process was delayed by objections and questions which were not worth the delay,” Kasula says. “Each time they come with a new set of questions. To their credit they are being very thorough but it’s a source of frustration.”

Still, experts see hopeful baby steps and believe the first federal approval for egg-laying hens might come within a year.

The US Department of Agriculture (USDA) has granted millions of dollars for clinical studies into hemp as animal feed through its National Institute of Food and Agriculture office.

Panelists participating in the August webinar included scientists from universities across the country, including Texas, North Dakota, Ohio and Kentucky. They saw great potential for livestock, horses and fish.

“I was blown away,” said Massimo Bionaz, an associate professor of dairy nutrigenomics at Oregon State University. “It has good fiber content, the protein is at the level of alfalfa, even better. We found it’s safe to feed this to animals.”

Even if it won approvals for feed, the hemp industry must convince farms farmers to grow industrial hemp, says Bish. After the 2018 legalization, most hemp growers planted the CBD type. Many went bust due to an ensuing glut and are reluctant to pivot to industrial hemp even though it has more potential as a cash crop.

One reason is the paucity of processing facilities. What with soaring freight costs, the handful of facilities that are scattered across the country lie too far away for most farmers to transport the bulky product. Prospective processors baulk at investing in multimillion-dollar machinery without enough raw supply of hemp.

“It’s a chicken and egg story, so there’s no economy of scale,” says Bish.

Hemp stakeholders are pinning hopes on Congress, which is due to renew the Farm Bill this year. They are lobbying for exemptions to make it easier to produce hemp fiber and grain, such as lifting the 0.3% THC limit. They also seek more Congressional funding to boost the number of FDA staff processing feed applications.

Meanwhile, progress remains glacial. “I would like to see more collaboration between the FDA and the industry to come up with clear guidelines to make the application process more efficient,” says Kasula. “Other countries are moving forward, and we need to reinvent the wheel.”