HIGHLIGHTS
- U.S. wholesale hemp biomass prices drop 3-11 per cent in August versus July
- Prices of U.S. CBD seeds and isolate also dropped in August while oil prices rose
- Adverse weather seen hurting hemp crops in many states
Wholesale hemp prices in the United States fell for the fourth straight month in August despite expectations for surging demand, as farmers prepared to harvest their first federally legal crop in decades that will feed into the increasingly popular cannabidiol (CBD) market.
The benchmark price of hemp biomass in the United States fell between 3 per cent and 11 per cent in August from the previous month, with average prices for various quantities ranging from US$2.95 to US$3.80 a pound, according to the Hemp Benchmarks report that is compiled by U.S.-based pricing company Cannabis Benchmarks.
Prices extended losses after the number of planting licences surged above the prior year and as producers sold their old plant material, much of which was of lower quality, ahead of harvest that is expected to start as early as September in some areas, as well as the degradation of biomass CBD potency over the past year.
Prices of CBD seeds and isolate also fell month-over-month while it rose for dry flower, and crude and refined hemp oils.
The extended fall in U.S. prices comes as Canadian farmers also prepare to harvest what is forecast to be a record industrial hemp crop. While hemp has been legally farmed in Canada for its grain and oil for human consumption, the 2018 Cannabis Act increased the total value of the crop as producers can now additionally sell the plants’ CBD-containing flower to extractors.
While the crop’s fibre is also harvested, demand for this is expected to increase significantly in the years to come as technology to manufacture this into renewable construction materials and other similar products is expected to improve.
U.S. hemp prices have dropped even as crops were hurt by adverse weather in many parts of the country.
“Hurdles that hemp farmers have faced this year include weather extremes, pests and disease, general unfamiliarity and unexpected developments with the new crop, and a supply chain fraught with potential hurdles and bottlenecks,” the report stated.
“A cold and wet spring in many parts of the country gave way to record-breaking summer heat.”
In Hawaii, 18 hemp crops – more than half of those in the state – cultivated in the past year were unusable due to levels of tetrahydrocannabinol (THC) being above the 0.3 per cent – threshold that is permitted under federal U.S. law. THC levels can rise unexpectedly due to uncontrollable changes in climate.
Hemp Benchmarks estimates that roughly 85 million to 130 million pounds of biomass will be harvested in the United States in 2019 and suitable for CBD extraction, at a market value forecast at US$2.4-billion to US$3.6-billion. The average CBD potency is estimated at 8 per cent.
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