CBD Goes Bust in 2021

With December upon us and hemp harvest season coming to a close, the cannabis industry is facing a sobering bust following the great CBD boom. The November 2021 Hemp Benchmarks Report contains results from an analysis of financial findings from publicly traded CBD companies, which reflect a stagnant 2021 market. However, hemp-derived THC (Delta-8) companies are seeing solid revenues despite some decline in wholesale prices. This was the case for LFTD, which saw $29 million in combined sales in the third quarter, while longstanding hemp CBD company Charlotte’s Web (OTC: CWBHF), which has the largest U.S. market share, reported a revenue decline of 6% year-over-year. Other publicly traded CBD companies such as cbdmd and CV Sciences reported similar trends.

Wholesale prices for various types of extracted CBD continue in a downward trend and, according to Hemp Benchmarks, the amount of hemp acreage planted and harvested successfully this year declined by roughly half compared to 2020.  The glut of hemp biomass and hemp-derived CBD products in the market, lack of growth in demand for non-intoxicating cannabinoids and the rise in popularity of synthetics manufactured from hemp-derived CBD point to more trouble ahead for CBD product sales. Other impacts include regulatory uncertainty and a drop in consumer spending due to the coronavirus pandemic. 

Still, a recent U.S. CBD Market Industry Update published by the Brightfield Group projects significant sales growth for CBD in 2022, with a holiday season jump and a possible boost from the passage of California Assembly Bill 45, which formally legalizes CBD production and sales in the state while also allowing it to be added to foods and marketed as a dietary supplement. This, coupled with the possibility that California may decide to restrict the sale of Delta-8 THC products to companies with state-issued marijuana licenses, may give non-intoxicating CBD products a much-needed lift in the market.

An increase of interest in hemp fiber and grain offers some reassurance to hemp farmers as well. In December, the National Hemp Association submitted a requested report to the White House predicting that hemp and fiber grain would generate a $32 billion dollar impact by 2030. As a crop that sequesters carbon dioxide and creates nutrient-rich soil (and therefore nutrient-rich produce), hemp shows great promise as a rotational crop among farmers who currently rotate corn, soy, and wheat. Meanwhile, hemp fiber has the potential to serve as the basis for thousands of products throughout the supply chain. 

The success of hemp fiber and grain will require a considerable investment of time, resources, education, and promotion and is not without challenges, but as big brands like Georgia-Pacific, Nike, and Patagonia announce initiatives to make hemp-based products, the wheels are already turning in hemp fiber’s favor. Farmers growing hemp fiber and grain can buy certified seed to minimize their risks (an option which does not exist for CBD plant seed), and the availability of contracts for growing hemp for both fiber and seed is increasing as manufacturers research more ways, both old and new, to make use of this versatile plant.

 

Julie Aitcheson

Julie Aitcheson is a freelance writer, author and educator. In addition to Green Market Report, her work has appeared in Vanguard Magazine, The Fresh Toast, Green Entrepreneur, Daily Press, The Baltimore Sun, LA Weekly and The Chicago Tribune. She received a full fellowship to the 2013 Stowe StoryLabs and won second place in the 2014 San Miguel Writers' Conference nonfiction writing competition. She has published two young adult novels and is currently at work on a piece of adult fiction.


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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