Even using hemp (or any other crop) to produce alcohol presents its own problems, some of which are shared by ethanol production. That is, crops to produce fuel displace crops to produce food driving up the cost of food. This isn't necessarily a huge problem for first world countries but it ultimately produces more malnutrition and starvation in third world countries. Nothing is free and everything has advantages and disadvantages. Right now fossil fuels win out simply because they are cheaper to produce. However, what is cheaper is significantly impacted by government regulation.
Hemp will grow in a lot of places that corn etc won't... almost anywhere... it's also a weed and very hearty. it grows between corn plants in Iowa right now. I don't see a problem.