Share 5. The global industrial hemp market size was estimated at USD 4.71 billion in 2019 and is expected to register a revenue-based CAGR of 15.8% over the forecast period. It’s difficult to gauge which state strategy is preferable. We know that the US current processing capacity is not that large and not every pound will be harvested and converted into distillate. Create your Kush.com account here to view current industry pricing data >>. Hemp growers Justin and Hilari Courtney were growing hemp for CBD in Nebraska. Caren Wilcox will serve as the inaugural USHGA executive director. CBG biomass continues to garner interest in the market, with offers posted on PanXchange’s trading platform between $150/lb and $200/lb for near term delivery. Even the passage of the U.S. 2018 Farm Bill, which would legalize hemp in that country, shouldn’t have much of an impact on prices. The IFR reports that 9,649 acres were harvested nationwide in 2016, which had increased to 77,844 acres by 2018. The samples tested at 0.496% and 0.38% THC. The first way is that a growing US hemp industry would cut into Chinese hemp exports. 11) License fee: See 2019 Tennessee Department of Agriculture Industrial Hemp Application guidelines. This decline in input prices, coupled with improvements in harvesting and processing, will drive production costs down, which will keep the CBD consumer packaged goods market afloat as retail prices continue to drop due to competition. Isolate has been offered on the PanXchange trading platform as low as $1800/kg, which is dangerously undervalued, and at that price point, it is difficult for any producer to generate a profit. Biomass markets continue to bifurcate between the market transacting at values dictated by supply and demand and a market rife with desperate sellers and opportunist buyers. The chart above shows a unstable market in rapid growth. 2019 Hemp Harvest Estimates; U.S. Hemp Extraction Survey Results ... Visit Hemp Benchmarks on the web to read their free Hemp Benchmarks Monthly Report. PanXchange launched the hemp industry’s first suite of benchmark prices in January 2019, one month after the U.S. farm bill legalized the plant, and added a trading platform in August. This means states may also apply existing hemp laws and regulations during the 2020 growing season, presumably including their pre-IFR interpretations of the 2018 Farm Bill. In October, hemp seeds were selling for $5.59 per pound. By comparison, USDA’s website states that Tennessee’s production plan is “under review.”. Note that the report claims that they do not sell raw material— biomass and refined inputs into the market in the event of a surplus. So, states with existing pilot programs can delay implementing the IFR through the 2020 growing season. "I am honored to be a part of this historical moment in U.S. agriculture and lend my experience and expertise to the emerging commercial hemp industry as we develop this organization," said Caren Wilcox, executive director for USHGA. Hemp Biomass Prices 2019: A Look at Q1 Sales Data. The Tennessee Department of Agriculture (TDA) reports on its website that the state licensed 3,800 producers in 2019 to plant up to 51,000 acres. Scenario 3: Demand estimate based on population data. We already have observed biomass prices decline by 20% to 40% from April to September 2019, depending on transaction volume. Hemp Market Insider. Hemp Benchmarks ® Spot Price Index Report. Biomass markets continue to bifurcate between two markets: 1) the market transacting at fair market values dictated by supply and demand; 2) a market rife with desperate sellers and opportunist buyers. Fee for a grower license is based on planning acreage for production: $250 for less than 5 acres, $300 for 5 to 20 acres, and $350 for more than 20 acres. Specifically, one undesirable variation in biomass or a smokable flower which doesn’t have an optimal “nose” is the difference between a product that can be sold for consumption and one that is unusable and will go to waste. Hemp biomass typically sells for around $35 -$75 per pound, with an average of $56 based on actual sales data. USDA plans to attribute this entire amount to ongoing pilot programs, as well as 50% of the anticipated 2020 harvest. Over time, even though the CBD sales will continue to grow, it is only one sector when looking at the potential uses of the hemp plant. In fact, the average offers received on hemp raw materials listings is 1.47. Jeffery C. Lowe is an author and attorney in Tennessee with Hemp Dig, Inc., an online hemp and hemp products marketplace. COPYRIGHT © 2019 Guide Resource Services INC, Introducing the Kush CBD Isolate Pricing Index, Melatonin Vape Juice By Full Body Zen 500MG 20ML (Pack of 14), Infused Vape Pods By Full Body Zen 400mg (Display of 15), Hemp Oil Tincture By Full Body Zen (Pack of 24), The HempList #18: Upcoming Regulations, White Label, & Toll Processing w/ Cannilabs, The Return of Live Events & What’s Different This Year | #THC2021 FAQ, The HempList #17: Growing High Quality Hemp in Oregon w/ Four Seasons, The HempList #16: Growing Hemp on George Washington’s Family Farm w/ Pure Sterling Hemp. 11) License fee: See 2019 Tennessee Department of Agriculture Industrial Hemp Application guidelines. Congress legalized industrial hemp and CBD in 2018, clearing the way for expanded planting. Canadian hemp acreage pegged at 125,000-175,000 acres in 2019 Health Canada issued 614 hemp licences for 2019 by June Colorado-based PanXchange aims to establish U.S. benchmark hemp … In producing CBD products, the first step is the extraction of crude CBD oil from hemp biomass. The following reviews how several states have approached hemp production previously and, based on current information, how they intend to proceed during 2020. Testaberg is an authorized hemp grower and processor in Wisconsin, which launched an industrial hemp pilot program in 2018 and now has more than 2,100 applications for licenses in 2019. Make Informed Business Decisions With Confidence. “The good news is, we can grow industrial hemp in South Carolina,” DeWitt said. We need to emphasize that we, nor seemingly any entity in the industrial hemp market, is in a position to treat the analysis in this report as verified facts. With most products receiving multiple, competing offers, sellers have been able to increase the wholesale price of hemp biomass. However, it’s important to begin the discussion on the biomass to distillate conversion so that we can begin to tie actual supply with demand. SCDA’s website states that it submitted a “placeholder” plan to USDA in August 2019 and intends to submit a revised plan by Jan. 15, 2020. Moreover, 77% of hemp was planted with the purpose of CBD extraction (addressed in previous PanXchange reports and derived from the Farm Services Agency Crop Acreage Report), resulting in an estimated US production of 168,245,000 pounds of biomass throughout the 2019 harvest. As shown with Charlotte’s Web, one of the largest CBD product manufacturers need only an estimated 500 acres or 800 kg of distillate to reach $95 million in revenue. Founding partners that came together to create USHGA include U.S. Hemp Farming Alliance, First Crop, International Hemp Solutions, HiLo Seed, GenCanna and Farm Journal. Hemp production steadily increased as a result. The reality is that these estimates are based on the retail shelf price of consumer packaged goods that contain mere milligrams of actual hemp product. It appears the 2019 supply greatly exceeded demand and hemp fiber and grain feedstock prices plunged during 2019. A majority of the board leaders will be active hemp farmers. Implementing such a plan will likely require Florida to revise its newly enacted law, a prospect other states will confront, as well. April 5, 2019 From a Press Release . It was truly a team effort. From October – December of 2018, hemp biomass averaged only $54 per pound. Industrial Hemp Production Budgets, New York, 2019 Using 14.39 cents/mg CBD from the previous example, the industry would need just shy of 32,000 kg of distillate to service the entire US market (assuming no loss of cannabinoids during product formulation). Establishing a hemp biomass wholesale benchmark has been near impossible in the past. Vote Hemp reports that Kentucky’s harvest rose from 3,271 acres in 2017 to 6,700 in 2018. The value of industrial seeds more than doubled from May to October 2019, according to Hemp Benchmarks. Based on how prices have fluctuated over the past six months, it is hard to set a baseline. USDA’s website also does not reference South Carolina. Nontheless, the bid/ask spread has narrow since last month as product has been forced to move and buyers and sellers found common ground. Therefore, these farmers are willing to let the crude go for pennies on the dollar, driving prices down for the entire market in this product category. Price risk is defined as the fluctuations in prices paid for inputs or received for outputs (commodities sold). Reach out and one of our helpful sales reps will connect you with a buyer that matches your needs. Besides other possible reasons, they apparently believe this approach serves their producers’ best interests. According to interviews with state officials, the Montana Department of Agriculture (MDA) has expressed concerns to USDA over the IFR, to include the requirement that cannabis with more than 0.3% THC but below 0.5% be destroyed. The key difference is that hemp contains no more than 0.3% tetrahydrocannabinol, or THC – the psychoactive cannabinoid in weed that gets you high. Industrial hemp is from the plant species Cannabis sativa and has been used worldwide to produce a variety of industrial and consumer products. 2020 Industrial Hemp Price Forecast Chase Hubbard | 10.21.2019 | CBD Hemp The hemp industry is a rapidly evolving market, but one that is ultimately shaped by policy. The North Carolina Department of Agriculture (NCDA) states on its website that, until further notice, it will continue operating its pilot program. SDCA licensed 3,300 acres in 2019. This is important, for one, given many states’ concerns over the IFR. In our second scenario using Brightfield’s $4 billion of 2019 CBD sales, we project that the market would be satisfied with 32,600 kg of distillate. Fee for a grower license is based on planning acreage for production: $250 for less than 5 acres, $300 for 5 to 20 acres, and $350 for more than 20 acres. FDA thus appears to be preparing a production plan for USDA approval in time for the 2020 growing season. The U.S. Department of Agriculture (USDA) has issued its hotly anticipated Interim Final Rule (IFR). Product Units May 2019 June 2019 MoM $Chg MoM %Chg Biomass (0 – 25k pounds) $ / %CBD / pound $4.05 $4.02 ($0.03) -0.7% Biomass (25k – 100k pounds) $ / %CBD / pound $3.70 $3.61 ($0.09) -2.4% Hemp biomass prices reached a high of over $40 a pound in July, just before the 2019 harvest came in, according to PanXchange Chief Executive Officer Julie Lerner. Product Units July 2019 Aug 2019 Sept 2019 MoM $Chg MoM %Chg Biomass (0 – 25k pounds) $ / %CBD / pound $3.91 $3.80 $3.07 ($0.73) -18.7% Biomass (25k – 100k pounds) $ / %CBD / pound $3.41 $3.10 $2.99 ($0.11) -3.2% If we assume a uniform efficiency in hemp growth to consumer packaged good production, the United States hemp market would need just shy of 20,000 acres. 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