Partial reversal of trends in the US hemp market
On the territory of the United States, there is clearly a crisis of overproduction of agricultural raw materials rich in non-drug cannabinoids, grown on soil. Given the fact that a number of states in the country regulate the legality of using the hemp plant for recreational purposes and the fact that wholesale prices for such raw materials have not fallen, it is not surprising that the interest of US agricultural producers has shifted towards the legal cultivation of marijuana for the benefit of recreational consumers.
Due to the impact on the US hemp market of a number of factors (low prices, excess biomass and extracted cannabidiol, extreme weather conditions, regulatory uncertainty, the temptation to make more money from growing staple crops), the amount of hemp grown and processed in the US in 2021 is likely will be significantly lower than in 2020.
Significant reduction in acreage for outdoor hemp
- the number of licenses issued for the cultivation of hemp plants outdoors in 2021 is lower than in 2020;
- the area of crops registered for cultivation in 2021 is significantly less than in 2020;
- the registered area under crops is reduced by a much larger share than the number of licenses issued.
The above factors suggest that US agricultural producers are planting, on average, much smaller plots of industrial hemp in 2021 compared to 2020.
Legal psychoactive cannabis production is on the rise
Experts in the American hemp market have noted an increased interest in the production of legal psychoactive cannabis, which is later used for recreational purposes. The basis for this kind of conclusions is the licensing data, as well as the production capacity used in this segment of modern cannabis production. For example, the number of areas registered for indoor or greenhouse cannabis cultivation, which is commonly used in the United States for the cultivation of recreational marijuana, has grown significantly over the previous year. Compared to 2020, the cultivated area in greenhouses and indoor areas in 2021 increased by 328% compared to June 2020 and by 85% compared to the end of 2020.
Based on the licensing data, it appears that US cannabis growers are largely reluctant to grow this crop outdoors for CBD-rich biomass due to low prices and lack of buyers, and instead focus on growing legal marijuana. This is also due to the fact that legal psychoactive cannabis kept the price indicators on the wholesale market in the United States, despite the fact that flowers grown indoors or in a greenhouse are much more expensive than a similar product grown outdoors.
Information received from government officials responsible for cannabis production in individual US jurisdictions, in most cases, confirms the evidence that, in contrast to the decrease in the number of farmers who specialize in cultivating hemp plants on the ground, the area under cultivation of legal psychoactive cannabis in the current year increased compared to 2020.
Commentary of the specialists of the Association "Ukrainian technical hemp"
On the territory of the United States, there is clearly a crisis of overproduction of agricultural raw materials rich in non-drug cannabinoids, grown on soil. Given the fact that a number of states in the country regulate the legality of using the hemp plant for recreational purposes and the fact that wholesale prices for such raw materials have not fallen, it is not surprising that the interest of US agricultural producers has shifted towards the legal cultivation of marijuana for the benefit of recreational consumers.