The "hemp farms will be a smoke screen for illegal cannabis growth" spiel is bogus! The real reason the government doesn't want it grown is to protect big US business, IMO.
I think you are right on the mark. Hemp (Cannabis sativa) is truly a miraculous plant which literally has thousands of uses. It's true that in the U.S. it was once illegal to not grow hemp and it was the primary agricultural product in the original Jamestown colony. Henry Ford recognized its potential as a fuel source, for auto manufacture, in paints, oils, etc. The U.S. Constitution, the Magna Carta and the Declaration of Independance were all written on paper made from hemp.
In the 1930's Popular Science predicted a huge boom in hemp and its applications to technology and food science, proclaiming 3000 uses for it. In the 1940s the U.S. Defense Dept. deemed hemp so important to the WWII cause that it made a film titled "Hemp for Victory!" Hemp is very easy to grow, can be easily grown with minimal if any herbicide/pesticide use and is quite possibly the most nutritious food on the planet with a perfect 1:4 ratio of omega 3 to 6 fatty acid ratio. It's wholesale introduction into western agriculture would create a HUGE paradigm shift in agribusiness that would ripple down and change the face of several industries.