Complete Guide to Hemp Manufacturing in the USA

hemp manufacturing

Hemp manufacturing is a massive industry with a ton of hurdles. From securing the first seed to selling the final product, hemp manufacturing requires diligent attention to detail every step of the way. Failure to do so could result in hefty fines, product confiscation, financial freezes, asset seizures, and more.

Fortunately, there are many ways to open and manage a hemp business without all the hassles. To be clear, hemp retailers must still abide by protocol, but outsourcing hemp manufacturing to an experienced CBD supply chain company can help relieve much of that burden.

Today, we’ll address some important American hemp laws, outline vital steps in the hemp manufacturing process, and then discuss what CBD retailers should consider when sourcing a hemp product manufacturer.

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US Hemp Manufacturing Laws

The Hemp Manufacturing Process

Good Manufacturing Practices for Hemp Companies

Things to Look for in a Hemp Product Manufacturer

US Hemp Manufacturing Laws

The Agricultural Marketing Act of 1946 (AMA) was the first to distinguish hemp-type cannabis from marijuana-type cannabis. Specifically, the AMA (and all subsequent legislation) defined hemp as any part of the cannabis plant containing less than 0.3 percent THC on a dry-weight basis. This includes seeds, stalks, and (as of the 2018 Farm Bill) cannabinoid-rich hemp flowers, as well.

Notably, the USDA Farm Bill permitted limited cannabinoid hemp cultivation in 2014 (primarily for research and only in a few areas). However, growing cannabinoid hemp for commercial purposes wasn’t legal until they released the revised document in 2018. Essentially, the updated Farm Bill removed hemp cannabinoids from the Controlled Substance list and outlined basic protocol to ensure that hemp products remain compliant throughout every step in the supply chain. Though the USDA oversees hemp farming, the DEA oversees hemp manufacturing and compliance.

Hemp Laws Vary by Location

Importantly, the USDA released their final rule regarding hemp production in January 2021. The document outlines all basic protocols that hemp manufacturers must follow to maintain licensing and compliance. However, it also grants local jurisdictions ultimate authority over hemp production in their areas pending USDA approval. Consequently, hemp laws often vary between locations, which can be challenging for businesses that engage in national cannabinoid hemp sales.

Basically, each jurisdiction can choose to either adopt the USDA’s hemp farming program, develop their own USDA-approved hemp program, or decline participation altogether. Regardless of what representatives decide, every hemp producer must have their products third-party tested to ensure purity and compliance.

Processors must also follow a strict protocol in all steps of the hemp manufacturing process, including testing, documentation, handling, labelling, and more. These steps are crucial not only to sell products but to maintain proper licensing, as well. The hemp manufacturing process can only begin once all relevant licensing is in place.

The Hemp Manufacturing Process

The hemp manufacturing process is long and complicated, filled with regulatory hurdles every step of the way. Fortunately, those with determination, experience, and a clean legal record can easily participate in one or all steps of the hemp manufacturing process to deliver top-quality CBD hemp products to their demanding public.


The first step in the hemp manufacturing process is to procure seeds or clones from qualified sources. Notably, growers must carefully track all parts of the hemp plant, including pre-germinated seeds, throughout the plant’s entire life cycle along with proof of compliance every step of the way. This includes carefully documented dates, cultivation methods, fertilizers, and proposed testing and harvesting timelines. They must also secure fields to protect the plants from theft and damage and indicate with clear signage the nature of the crop and license information under which it grows.

Growers must also diligently monitor cannabinoid development, which begins early in the plant’s flowering stage of growth. This generally occurs in outdoor crops in early to mid-August when days get shorter, and just a few weeks after indoor facilities adjust their lighting schedules to a 12/12 light cycle. Notably, farmers must test their crops for THC development frequently throughout this flowering stage to avoid THC spikes and potential non-compliance. As such, farmers must be extremely familiar with their crops and standard testing procedures to avoid delays and testing bottlenecks. 

Notably, most cannabinoid testing should occur at least one month before the intended harvest date to give testing facilities a few weeks to receive and process requests. Growers who wait too long to harvest after testing is complete must re-test their crops. Bear in mind that “hot crops” or those that experience an excessive THC spike may require destruction in accordance with FDA protocol.


Next, manufacturers must process their low-THC hemp plants, either by curing the flower or flash-freezing it for later extraction. However, unlike other crops, hemp harvests must dry in carefully controlled environments like drying barns to preserve delicate terpenes and cannabinoids.

Essentially, they hang harvested plants in well-ventilated areas for a few days, which allows the buds to dry slowly by pulling moisture from the plant’s stems and stalks. Once the stems are dry enough to snap instead of bend, processors remove the flowers from the stems by hand to protect the delicate trichomes atop the hemp flowers. They then transfer these buds to special drying racks before placing them into opaque, airtight containers for the final stages of the cure.

Once cured, the product is either processed for distribution (e.g. made into pre-rolled hemp cigarettes) or transferred to an extraction facility. Notably, there are many hemp extraction types, all of which serve their own purpose in hemp product manufacturing. For example, some distributors prefer to use full-spectrum hemp extracts to reap the benefits of the entourage effect. Essentially, the entourage effect suggests that different hemp elements work better together than if they were consumed separately. However, other distributors prefer broad-spectrum hemp extracts which completely omit THC altogether. Other extraction types include isolate or distillate, which involve further hemp extraction refinement processes.

Once extracted, hemp cannabinoids may be infused into unique products like lotions, tinctures, patches, and pills. Once infused, these products must undergo another round of testing to ensure purity and acceptable THC levels. These test results must be available to the public as an official COA or Certificate of Analysis. Notably, COAs are important for both the consumer and the business to maintain proper licensing.


The next step in the hemp manufacturing process is distribution, beginning with proper packaging and labelling. Notably, CBD product labels must include specific information like the product identity and exact quantity without the packaging. It must also include the name and address of the business and list all ingredients whether active or not. Finally, labels must include any relevant disclosures, like expiration dates, batch numbers, CBD concentrate types, and so on. It is also wise to include disclaimers regarding CBD’s proposed benefits and the FDA’s official stance on the matter.

Notably, no marketing material should suggest that the CBD within the product can mitigate the symptoms of any diagnosable disease. For example, no CBD product should suggest that the product will relieve anxiety or address any diagnosable condition. Product labels that suggest otherwise are in direct violation of FDA protocol. This puts the distributor at risk of fines, product confiscation, bank freezes, and more.

Once proper labeling and packaging are in place, it’s time to distribute the CBD products to the seller. This involves more than simply passing the product along to a retailer, though. This is especially true given the varying hemp laws throughout the nation. For example, Iowa prohibits smokable hemp products and North Dakota limits the number of in-store CBD distributors significantly. Those who wish to sell CBD in these areas should always consult their local legislation before setting up shop.


The final step in the hemp manufacturing process is retail sales. Interestingly, CBD sales accounted for roughly $1,918 million USD in 2022 alone. Lotions, balms, and other topicals made up the largest portion of CBD sales followed by gummies, tinctures, and supplements. E-commerce sales continue to be the most popular sales avenue, largely due to less restrictive sales policies compared to brick-and-mortar stores compounded with broader marketing channels.

Importantly, consumer sales must maintain compliance protocol, including all applicable licensing and marketing material. This includes all labels and web-based information as well as user-generated content like reviews and affiliate promotions. Failure to maintain consistent compliance could cause a business to lose its licensing and banking. It could also severely tarnish its brand’s reputation.

Good Manufacturing Practices for Hemp Companies

Notably, the best hemp manufacturers should always follow Good Manufacturing Practices as outlined by the Federal Food, Drug, and Cosmetic Act. These steps help ensure that foods, drugs, and cosmetics are free of contaminants and safe for human consumption. Essentially, GMP establishes methods by which manufacturers can maintain quality control. They include things like official manufacturing processes, product sanitation, equipment standards, and complaint resolutions.

Importantly, GMP goes beyond standard hemp compliance requirements like tracking and testing to include equipment verification and employee training. The following are some of the most common characteristics of proper GMP protocol.

  • Clearly defined and controlled product manufacturing process
  • Well-documented product development procedures
  • Thorough and continuous employee training
  • Established systems through which to address product concerns and recalls
  • Well-controlled environments to prevent cross-contamination
  • Pre-established risk management procedures
  • Clean and sanitary manufacturing areas
  • Complaint investigation protocol
  • Product and supply traceability
  • Well-documented manufacturing deviations

Things to Look for in a Hemp Product Manufacturer

The quickest and most reliable way to expand a CBD product line is to outsource hemp product manufacturing to expert supply chain managers. Essentially, a qualified CBD supply chain company can manage all supply sourcing and manufacturing so that businesses can focus on marketing and sales. Brands can save significant time and financial investment by utilizing the resources and expertise of fully-integrated hemp supply chain managers.

Of course, the best CBD supplier possesses certain qualities that help ensure reliability and affordability. For example, a great hemp supply chain manager should have extensive experience within the hemp space and a long trail of licensing to back it up. When sourcing a CBD supplier, always consider how long they’ve been in business, not just the products they have to offer.

Great hemp manufacturers should also be flexible with wholesale orders. Those who offer both white- and private-label products generally have extensive experience perfecting formulas, which means retailers won’t need to spend time doing the same (unless they want to!). The products — and the CBD supplier — should already have a glowing reputation before a product manager places their first order.

Additionally, hemp manufacturers should provide extensive documentation regarding all of their products and processes. For example, they should possess all relevant licensing, employ third-party testing, and track all stages of the hemp manufacturing process according to GMP standards. This information should be readily available and communication prompt to avoid delays and confusion.

Finally, a great hemp manufacturer will provide innovative solutions to consumer demands. They should offer many product types, including standard tinctures and soft gels plus an array of unique products like patches, drink mixes, bath bombs, and nano CBD products. What’s more, some also offer customizable private-label solutions for those who want to share in the product development process.

Outsource Hemp Manufacturing to VCM

VCM is an experienced hemp manufacturing company with years of experience growing and manufacturing hemp products. We’ve perfected each unique formula to deliver the perfect ratios of cannabinoids and other wellness-boosting compounds.

Contact us to learn more about our unique cannabinoid hemp products or view our product catalog now. You can also follow us on social media for news and product updates.

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