GenCanna Global USA Inc., a leading hemp producer in Kentucky, has filed for Chapter 11 bankruptcy protection as the company has run into liquidity issues. GenCanna is looking to reorganize its business in order to help refinance debt or to sell the business.

Kentucky's been a hot spot for the hemp industry, with the state giving out 1,000 licenses for the 2019 crop. But one of the challenges for the industry is that the Food and Drug Administration (FDA) still does not allow food products to contain hemp-derived cannabidiol (CBD), which prevents hemp companies from being able to tap into a lot of the industry's potential growth.

Kentucky's Agriculture Commissioner Ryan Quarles highlights just how long growers have been waiting: "We're entering year No. 7 with hemp being grown legally in Kentucky, and yet the FDA has yet to act and tell the industry which way they're going to regulate hemp-derived products."

Cannabis hemp oil in containers on a table, with hemp seeds and cannabis leaves

Image source: Getty Images.

Companies are banking on lots of growth in the industry

Research company Brightfield Group anticipates that the hemp-derived CBD market may be worth $22 billion by 2022.

One company that's already benefiting from a lot of that growth is Charlotte's Web (OTC:CWBHF). The hemp company has generated millions in sales over the past 12 months, and its products are located in more than 9,000 locations across the country.

Canopy Growth Corp (NYSE:CGC) is another company that's looking to get in on the hemp rush, with the cannabis giant securing a license to cultivate hemp in New York State. Hemp is one way that Canadian-based Canopy Growth and its peers are able to penetrate the U.S. market, where marijuana remains illegal at the federal level.