Prices for the various hemp and hemp-derived products covered by our reporting continued to slide in May. Reports from our Price Contributor Network, market participants interviewed for this report, and other sources have consistently emphasized that sales of CBD Biomass and extracted CBD products were already slow in the wake of 2019’s harvest, and have worsened since the COVID-19 pandemic gripped the U.S. in March.
Retail sales of CBD products were also already softening as the pandemic arrived, as we discuss in our May Hemp Spot Price Index report in an examination of Q1 financials reported by publicly-traded CBD companies. Plateauing demand has led to processors building large inventories of extracted CBD products. There are signs that direct-to-consumer sales are a potentially promising channel to move inventory at the moment, but the current state of affairs means that extractors are still largely refraining from purchasing hemp biomass outright, and instead are offering farmers tolling arrangements. As a result, we have observed the frequency and volumes of CBD Biomass sales contract significantly in recent months, even as large amounts of 2019’s harvest remain unsold and 2020’s crop gets underway.
As the hemp-CBD wholesale market has cooled, prices for smokable CBD Flower have recently stabilized more than many other products. The per-pound rate for May was essentially flat from April, though current prices are down by a bit over 10% compared to those assessed in February and March. Reports out of at least one state – Indiana – have noted that more farmers are looking to farm hemp for smokable CBD Flower this year, even though Indiana law currently prohibits such production.
Low prices for CBD are also prompting market participants to increasingly pivot to other end markets, such as CBG or industrial applications, like fiber and seed. Rates for CBG Biomass and extracted products remain much higher than those of their CBD counterparts, but have been sinking consistently since we began assessing prices for them earlier this year.
May Hemp Spot Price Index Report Contents
Producers Pull Back, Pivot in 2020
Several leading states for hemp production in 2019 report large decreases in licensed acreage for 2020.
Weather Outlook
Planting season conditions forecast to be more favorable than last year.
Hemp Benchmarks Extraction Survey
A survey of hundreds of hemp-CBD processors details input and production capacity.
CBD Sales Slow Overall, DTC Ecommerce Expands
Publicly traded companies report falling revenue, but online sales expand.
Industry Updates
PetSmart to begin carrying CBD products; new hemp harvester unveiled.
Federal Regulatory Updates
Hemp excluded from USDA relief program; FDA issues notices on recalls of CBD products.
State Updates
CO cannabis retailers can sell hemp-derived products beginning July 1; licensing updates from FL, IN, ME.
