This answer comes from a discussion from Rocky's AMA.

It is time to allow farmers to grow industrial hemp in the United States. There is a huge market for textiles, paper, high protein food, clean burning diesel fuel and biodegradable plastics that industrial hemp farmers could produce using less water than cotton, needing no pesticides or herbicides for growing this 'green' alternative product. Industrial hemp contains virtually no THC (delta-9-tetrahydrocannabinol), the active ingredient in marijuana. Industrial hemp has less than 0.3% THC, while marijuana typically has 5-25% THC. Additionally, industrial hemp contains a relatively high percentage of CBD (cannabidiol), which negates THC's psychoactive effects.

According to Agriculture Canada, “Canada’s Industrial Hemp Industry,” March 2007, available online at [http://www.agr.gc.ca/misb/spcrops/sc-cs_e.php?page+hemp-chanvre].

Hemp’s remarkable advantages are hard to beat: it thrives without herbicides, it reinvigorates the soil, it requires less water than cotton, it matures in three to four months, and it can yield four times as much paper per acre as trees. Hemp can be used to create building materials that are twice as strong as wood and concrete, textile fiber that is stronger than cotton, better oil and paint than petroleum, clean-burning diesel fuel, and biodegradable plastics. In addition, it can produce more digestible protein per acre than any other food source. These advantages are in tune with the environmental and health preferences of today’s North American public. The growing curiosity of consumers, the interest shown by farmers and processors, and Canada’s excellent growing conditions for industrial hemp allow optimistic views for its future.

Every other industrialized nation in the world permits the farming of industrial hemp for fiber and seed, and industrial hemp is recognized in international law. Article 28(2) of the 1961 United Nations' Single Convention on Narcotic Drugs, to which the U.S. is a signatory, states "This Convention shall not apply to the cultivation of the Cannabis plant exclusively for industrial purposes (fiber and seed) or horticultural purposes." In spite of this, the U.S. Drug Enforcement Administration (DEA) continues to intentionally confound industrial hemp and marijuana. This has resulted in an absurd policy: hemp seed, oil and fiber are all currently legal for trade in the U.S., and domestic industry imports industrial hemp for diverse uses. Yet, at the same time, U.S. farmers are prevented from producing industrial hemp for the domestic market. It is time to remove unnecessary barriers to the domestic production of legal industrial hemp.