Two years after the first federally-legal hemp crop was planted, America’s wholesale hemp market has morphed in unexpected ways. At the start of the 2019 season, market participants had visions of hemp being a new cash crop on the back of expectations that demand for CBD would take off amongst a broad segment of consumers. This scenario has not yet come to fruition, due in part to an unsettled regulatory environment and the disruption caused by the COVID-19 pandemic.
Now, delta-8 THC – which is manufactured from hemp-derived CBD Isolate – and smokable CBD Flower appear to be the two most in-demand products, despite the fact that both were unknown to many in 2019. For specific pricing updates on these two categories, subscribe to our full Hemp Spot Price Index Report.
Assessed prices for CBD and CBG Biomass and extracted products declined for the most part in June. Reported transaction volume was relatively low, indicating a sluggish wholesale market. Accounts from members of Hemp Benchmarks’ Price Contributor Network continued to tell of an oversupply of CBD Biomass and extracts. One processor stated, “Still lots of inventory around, some at rock bottom prices due mostly to bankruptcies.” Similarly, a Montana processor and CBD product manufacturer said, “We still get calls from folks trying to sell [one or two] year old crops.” They continued, “With weather and low planting rates maybe price goes up, but processors are still sitting on a lot of already processed material.”
The first processor quoted above reported good margins on edible products for both humans and pets. They stated that vertically integrating one’s business to be able to manufacture and sell end products “is key,” affirming accounts from other market participants noted below, in the June Production Update.
A refrain repeated by market participants is that the pullback in acreage, along with potential crop loss from extreme weather, which we also discuss below, could help lift wholesale hemp-CBD prices in the future. In the meantime, processors are streamlining operations to stay afloat, but are not always successful, with reports from the field telling of a continuing shakeout in the market. Others are casting about for new opportunities akin to delta-8 THC. In the words of a processor in North Carolina, “We continue to get requests for unusual items; CBDa, THCV, etc.”
CBD sales sluggish as prices decline; delta-8 THC price stabilizes; smokable CBG Flower price surges again.
State data indicates significant pullback in outdoor acreage, but increase in indoor / greenhouse production for smokable flower; extreme weather is challenging growers during planting season.
Drought and extreme heat hit the West and other parts of the U.S.; grasshoppers could again be a problem in the Mountain West based on weather patterns.
Delta-8 THC continues to see strong demand and is reportedly helping buoy hemp-CBD prices in the face of pushback from the legal marijuana industry, continued regulatory efforts by states.
Licensing, production, and regulatory information covering 19 states.
Western Australia researching hemp for livestock feed; China’s crackdown on CBD in cosmetics continues.