Trends in the US wholesale cannabinoid raw materials market
A significant drop in prices for products rich in plant cannabidiol, as well as the activity of companies working in the field of using other therapeutically active elements of the hemp plant, predetermines in the medium term the rapid development of the market for “non-traditional” drug-free cannabinoids, as well as the most active use of other therapeutically active elements of the hemp plant.
On the eve of the specialized round table "Exponential growth of the market for non-traditional therapeutically active elements of hemp" held as part of the training of the next course for students of the " Hemp University ", the editors of the specialized electronic edition of national cannabis growers asked our colleagues from the United States to describe the trends that market. A significant part of the materials sent by our American colleagues will be used in the course of the specialized roundtable, however, some trends observed in the US cannabinoid raw materials market are outlined below.
Wholesale prices for CBD plant-based raw materials in the United States continue to fall despite strong sales of finished products. In particular, the cost of hemp isolate during 2021 decreased from $ 500 per kilogram to $ 310. The main reason for the fall in prices and the current situation in the market is the excess of hemp biomass that has formed since 2019. In addition, a significant part of hemp raw materials that are stored for a long period of time cannot be the basis for the production of high-quality final products (leaves and inflorescences are basically affected by various types of fungi and mold), which implies the refusal of wholesale buyers to purchase these products from agricultural manufacturers.
Prices for end products containing plant-based cannabidiol are also showing a downward trend. In particular, in the spring of 2019, the wholesale cost of CBD oil (cannabinoid oil) was about $ 1400 per kilogram. As of late August-early September 2021, the price of this product ranges from $ 80 to $ 120, and a similar situation is observed in the distillate market. In the US market, there is already a situation in which wholesale buyers of finished products (isolate, distillate, cannabinoid oil) prefer to purchase them below the cost price demonstrated by individual production processes.
Another trend that is observed in the American CBD market is the simplification of the requirements for industrial crops of technical hemp for therapeutic purposes in certain administrative-territorial units of the country (at the moment, in most states, agricultural producers who grow biomass rich in plant cannabidiol are forced to comply with regulatory requirements similar to those which apply to the hemp crop regulatory sector, which is high in tetrahydrocannabinol).
In response to the trends observed in the cannabinoid market, hemp processors are acting in different ways, showing multidirectional trends. Most of the market minimizes the prices of final products, thus significantly reducing the cost of hemp raw materials and production costs, but some manufacturers rely on quality without significantly reducing the price of the final product. In fact, each of the manufacturers of CBD products is looking for their own niche, preferring to bet on those marketing moves that they see most appropriate.
All experts of the American wholesale CBD market unanimously affirm that the period of astronomical earnings has passed and at the moment what is happening cannot be described as stability.
Commentary of the specialists of the Association "Ukrainian technical hemp"
The US CBD market is experiencing a number of trends that indicate its stagnation. In the near future, large firms will begin the process of acquiring smaller ones or taking over those that have not been able to succeed. Most likely, the lobbying of large CBD companies at the level of the adoption of an appropriate regulatory framework will lead to the adoption of legislation that will “cut off” small firms (the introduction of a significant minimum threshold of profitability in the form of categorization of industries, specialists, final products, etc.) from the CBD market ...
A significant drop in prices for products rich in plant cannabidiol, as well as the activity of companies working in the field of using other therapeutically active elements of the hemp plant, predetermines in the medium term the rapid development of the market for “non-traditional” drug-free cannabinoids, as well as the most active use of other therapeutically active elements of the hemp plant.
Issues related to the development of the global as well as the national market for therapeutically active elements of the hemp plant will be considered in maximum detail during the round table “Exponential growth of the market for non-traditional therapeutically active elements of hemp”, which will be held on November 3 as part of the next training course for students of the “ Hemp University ”.