CBD Biomass prices this month continued the post-harvest trend of stabilizing and ticking upward a bit on increases in rates for smaller-volume deals. Current prices are still off relative to those documented in August, prior to most crops being brought in. Reports from industry participants this month attested to still-tough market conditions. Members of our Price Contributor Network (PCN) in the Southeast have commented on the oversupply of biomass; there were also accounts of diminishing opportunities for splits, with most processors charging tolling fees for extraction services.
There was also consensus that there is an oversupply of CBD extracts and securing retail shelf space has become very challenging. All assessed prices for CBD extracts saw declines this month, with the aggregate price for Refined Hemp Oil, which includes various types of CBD Distillates, down 15% from November. THC Free continues to retain value better than other forms of distillate, but this month’s rate is down by 63% from that documented a year ago. Processors continue to report holding significant inventories of extracted CBD.
Two products that saw notable price jumps this month were smokable CBD Flower and Non-Feminized CBD Seeds. Overall rates for CBD Flower continue to be pushed upward by indoor and greenhouse-grown product. December also saw more recently-harvested outdoor flower come to market, which is moving at prices higher than last year’s crop. The increase in the price for Non-Feminized Seeds may be due to rising demand as operators look to lower their production costs. We have reported previously on some larger-scale mechanized operations experimenting with using non-feminized seed and leaving male plants in the fields.
Movement in prices for CBG products broadly mirrored that observed in the CBD realm: In other words, rates for CBG Biomass and Seeds were up this month, while prices for CBG extracts saw significant declines. Reports from our PCN noted that CBG is not getting the consumer interest that some in the industry anticipated. This has been attributed in part to many businesses in the hemp space pulling back on marketing and education efforts for new products this year. Some now doubt that CBG will take off the way CBD did anytime in the near future.
Reported prices for CBG Flower were also down this month and are now comparable to assessed rates for CBD Flower. Transaction frequency for CBG Flower was relatively sparse, reflecting reports of weak demand.
A PCN member in the Midwest noted very strong delta-8 THC sales this month, some of which are being converted to longer term contracts. The average price for delta-8 THC this month was $1,740 per kilogram, down from $1,800 last month. However, December’s decline was much smaller than those documented in prior months.
[Editor’s Note: The prices quoted above for smokable CBG Flower and delta-8 THC are raw transaction data and do not constitute official Hemp Benchmarks price assessments. Transaction data for such products is currently being vetted to meet Hemp Benchmarks methodology requirements, which include, but are not limited to, several months of statistically significant data and consistent or increasing transaction volume.]
Reports of crops left unharvested due to 2019 oversupply, low biomass prices; U.S. hemp grain prices under pressure from Canadian growers; study examines impact of wildfires on hemp crops and extracted products.
COVID-19’s Continued Impact
Pandemic resulted in pullback in cultivation, lost retail sales channels this year.
Market participants expect less crop failure, more forays into fiber, grain.
Transportation Costs Update
Costs to ship hemp products showed stability from November to December.
Federal Regulatory Updates
USDA expands crop insurance program, offers grants for supply chain research; FTC levies first fines on hemp-CBD companies for misleading label claims.
Patagonia looks to source hemp fiber for fabrics from Colorado; Microsoft working to provide blockchain solutions to share hemp shipment information with law enforcement.
Reports from 18 states; includes updates on 2020 production from Colorado, Kansas, Wisconsin.
International climate toward hemp-CBD becomes more friendly with recent decisions by EU, UN.