Hemp Benchmarks Archives - Green Market Report

Debra BorchardtJuly 29, 2021
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9min4720

Delta-8 and smokable flower are the two products keeping hemp framers alive. The regulatory loophole that has allowed Delta-8 to be sold legally is also causing legal confusion. Delta-8 is a cannabis product that can be derived from hemp, but still give the consumer a light psychotropic experience. Some states have issued restrictions around the product, while others haven’t addressed it at all. Either way, the demand has been a blessing to hemp farmers who planted lots of acres in 2019 expecting a surge in CBD products, only to see the market contract and prices plummet. 

Hemp Benchmarks reported that after rising 4%in May, the average per-kilogram price for delta-8 THC distillate fell 1% in June to $1,215. “Notably, both the low and high ends of observed transaction data – $900 and $1,650 per kilogram – were up compared to May.”

In Georgia, Reginald Reese of Green Toad Hemp Farm told Hemp Benchmarks that delta-8 THC was here to stay. “The beauty of it is, Georgia refused the [delta-8] ban,” he said. “We have the right as licensed hemp growers to use every part of that hemp.” Reese also told Hemp Benchmark that he believes efforts to ban delta-8 THC are part of a “full-court press” from the businesses participating in licensed, state-legal marijuana industries, which do not want the competition. 

Smokable Flower Grows

The other product that has been welcomed by the farmers is smokable flower. The Benchmark reported that as of June 2021, the number of square feet registered for indoor or greenhouse hemp production – which is typically for the purpose of producing smokable CBD flower – is up significantly relative to last year. “Hemp Benchmarks has documented over 168.2 million square feet registered for indoor or greenhouse production. This figure is up 328% compared to over 39.5 million square feet recorded in June 2020 and up 85% from over 90.8 million square feet ultimately documented by the end of last year.”

It seems farmers are leaving the outdoor growing and focusing on indoor growing in order to fulfill smokable flower demand. The Benchmark report documented that smokable CBD Flower has maintained its value in the U.S. hemp wholesale market better than perhaps any other hemp-CBD product. “Flower grown indoors or in greenhouses also typically commands a premium price compared to that cultivated outdoors.”

The Benchmark report said that smokable CBD Flower saw its average price decline in June after cresting above $300 per pound in May. “Despite some reports of still-stagnant demand for CBG, the price for smokable CBG Flower rose 15% in June to average $326 per pound, exceeding the price for its CBD counterpart. The significant increase in the assessed price for CBG Flower this month follows an over 50% jump observed in May.” This shift away from biomass and towards flower farming could potentially stabilize the biomass market. A reduction in supply could help wholesale prices. 

Grasshoppers?

The problems affecting hemp crops this season could end up helping reduce the glut of hemp inventory. Excessive heat and drought in the western part of the U.S. have affected hemp farmers. Wildfire threats and water reductions have also conspired to challenge hemp farmers. And if that wasn’t bad enough – it seems grasshoppers love warm, dry weather. 

Last year, farmers fought grasshopper infestations and it looks like this year conditions are ripe for an even bigger outbreak. The Hemp Benchmarks June report noted that the U.S. Department of Agriculture is said to be taking steps to mitigate damage to crops and rangelands by spraying pesticides in areas where infestations are likely to occur, including roughly 3,000 square miles of Montana, which is home to significant hemp production, primarily for grain. 

Less Hemp Acreage

Hemp Benchmarks reported that there is less hemp being grown as farmers head into the 2021 season. Several reasons have caused the less than stellar outlook for the market. A glut of biomass and CBD caused a plunge in prices reducing the profitability of the crop. Farming more mainstream products have become a better investment. The hemp market has also been affected by a lack of regulatory guidance has also caused farmers to back off from planting more acreage. 

Hemp Benchmarks said it has documented the following hemp production licensing and acreage data for 2021: 

  • 8,298 licenses issued (down 8% from 9,066 counted in June 2020; down 58% from 19,799 ultimately documented for 2020); 
  • 107,702 acres registered for outdoor production (down 55% compared to 236,732 acres documented in June 2020; down 75% from 429,300 ultimately documented for 2020).

CBD Collapse

It seemed that almost every product on the retail shelves had some form of CBD in it. Food, beauty products and supplements popped up on every retail counter. The future looked bright for hemp farmers, but the demand didn’t follow at the expected levels. Thousands of CBD companies sprang up overnight and the flood of products created a confusing and competitive landscape. 

A new Brightfield Group report says that the CBD industry has lost more than 1,000 players in the past 12 months—some through corporate consolidation and others to bankruptcy. Hemp Benchmarks also quoted farmers who said that there was a lot of low-priced inventory on the market due to bankrupt companies. Earlier this year the Phoenix Business Journal reported. that Integrated AG, the parent company of Integrated CBD, filed for Chapter 11 bankruptcy protection on Jan. 20 and disclosed over $20 million in outstanding debt. 

Despite all the negative news, last month California-based Kadenwood, a privately held CBD consumer packaged goods company, completed a $30 million cash Series B capital raise. The company said it will use the money to buy advertising and acquire more companies. Kadenwood said the raise also includes a $20 million media campaign to raise brand awareness, bringing the total value to $50 million.


Julie AitchesonFebruary 22, 2021
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4min24100

According to the January 2021 Hemp Benchmarks report, there is an increasing demand for delta-8 THC, which is not derived from hemp plant material but synthesized from extracted CBD. This is helping drive sales of crude CBD oil, CBD Isolate, and some wholesale CBD products. As the popularity of delta-8 THC increases, Hemp Benchmarks observed a consistent decline in prices. Despite the fact that trading volumes of delta-8 THC remain a small proportion of those for CBD products, it is the fastest-growing product in the hemp sector as of the January report. A Tennessee processor told Hemp Benchmarks that they have seen as many as about 20% of their CBD customers shift to purchasing delta-8 THC.

This growth is notable given the many unresolved questions regarding delta-8’s legality. The compound is a psychoactive cannabinoid, which means it can get users “high”, giving rise to numerous legality issues. Newly proposed regulations from the Drug Enforcement Agency would classify delta-8 THC as a Schedule I controlled substance, which would make it illegal at the federal level. For this reason, laboratories and manufacturers are keeping a restrained and realistic eye out for delta-8’s true market potential. The uncertainty extends to the lack of defined standards around compliance and purity of products containing delta-8 THC. The Hemp Benchmarks report quotes an email from Stephen Crowley, Compliance Specialist and Hemp Processing Technician with the Oregon Liquor Control Commission, who wrote that one of his concerns is “what else might be in these products other than delta-8 THC.” This includes a number of chemical impurities that can be generated during the isomerization process.

If the proposed DEA regulations go into effect, delta-8 THC synthesized from CBD would be illegal and its popularity among manufacturers would hit a major roadblock. Until regulations are finalized, The Hemp Benchmark report predicts that some processors might entertain the idea of synthesizing delta-8 THC from their surplus CBD and selling it for significantly higher prices in order to recoup losses from declining CBD and CBG extract prices. 

The consumer market for delta-8 may correlate more strongly with the delta-9 THC demographic as they are both psychoactive, which may limit the delta-8’s appeal for the broader CBD consumer base. As a “novel cannabinoid”, delta-8 THC education and promotion will be necessary to ensure that it does not see the same fate as CBG, which has not generated sufficient interest to purge the excess inventory of what was supposed to be the cannabis industry’s newest rising star. From February to August 2020, the price for CBG Biomass dropped by a staggering 82 percent.

Delta-8 THC is currently a bright light in a stumbling market. Whether or not it can sustain that upward trajectory is dependent on which way the regulatory wind blows once the grey areas in the 2018 Farm Bill are clarified regarding synthetically-derived forms of THC. Until then, this controversial compound is making its way into all manner of products on the hemp market, and earning top dollar for those willing to take a chance on its uncertain future.

 


StaffAugust 25, 2020
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3min24940
Hemp Benchmarks recently released its July 2020 report reviewing wholesale prices for the hemp industry. The group found that price assessments in recent months have shown stabilizing rates for numerous wholesale products that are part of the hemp-CBD supply chain. “For example, from April through this month the aggregate price for CBD Biomass and wholesale prices for smokable bulk CBD Flower have both steadied. While the downward trend in CBD product prices has largely subsided in recent months, that for CBG biomass and extracted forms of the cannabinoid has continued.”

Crop Declines

Hemp Benchmarks also found that the 2020’s licensed acreage declined by over 30% from last year, while indoor and greenhouse square footage registered for hemp cultivation is down by roughly 64% year-over-year. “These numbers bear out what we have reported earlier this year, that many farmers are taking a more conservative approach to cultivation, if not exiting the sector entirely. The just over 18,000 cultivation licenses that we have counted nationwide to this point in 2020 represents about an 8% decline compared to the over 19,500 recorded in 2019. This indicates that most growers registered smaller outdoor plots or indoor / greenhouse sites.”
The report also said that overall, the reduction in licensed acreage, entrance of a significant amount of new farmers, tough market conditions, and difficulties related to the COVID-19 pandemic suggest that total U.S. hemp production for 2020 could decline substantially year-over-year, particularly in regard to how much CBD or other cannabinoid-rich biomass is generated.
“In our June report, we analyzed data on costs to transport hemp and hemp products. We also pointed out that such costs can change based on a variety of factors. This month, hemp transportation costs were on the rise in July due to fallout from the COVID-19 pandemic.” Jon Wilcox, co-founder of hemp transportation company Fide Freight, attributes the rise in shipping costs to states across the country reopening after coronavirus-motivated shutdown orders. He stated, “It is assumed that shippers are trying to make up for lost time and … make as much money as possible due to short-term uncertainty.”
Additionally, U.S. ports are overloaded with goods that shippers are trying to move. This has resulted in bidding wars for trucks.

Cynthia SalarizadehApril 24, 2019
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3min27200

New Leaf Data Services, LLC (NLDS), the cannabis and hemp industry’s only independent Price Reporting Agency, has officially launched a pricing vertical for hemp called Hemp Benchmarks®.  It is now collecting, assessing and reporting on the wholesale price of biomass, dry flower, clones, seeds, crude hemp oil, refined hemp oil and CBD isolate.

As hemp is considered the future for the cannabis plant as a global commodity, the launch of this platform is a major step in the right direction. This signals to Wall Street that the commodity is ready for prime time trading.

“With the passage of the 2018 Farm Bill last year, the hemp market is poised for massive growth with unprecedented interest from farmers, processors and consumers, fueled in part by the extraordinary demand for CBD-based products. Industry participants will be seeking price transparency to analyze and navigate what we believe will be a dynamic and chaotic market as the projected supply and demand for hemp and hemp derived end-products comes into focus over the next few years.” said Jonathan Rubin, CEO of NLDS. “We are pleased to offer the market another independent reference benchmark to support strategic, operational and investment related decisions.”

These new assessments expand NLDS’ portfolio of benchmarks, which include more than eighty weekly benchmarks covering the wholesale price of cannabis in legal U.S. and Canadian markets through its Cannabis Benchmarks® division.

“We expect volatile hemp and CBD markets until supply and demand reach an equilibrium,” noted Rubin. “Price Reporting Agencies play a critical role in managing risk associated with volatile markets, enabling buyers and sellers to transact with confidence, support fundamental analysis by investors and equity analysts, and provide definitive benchmarks for commodity traders.”

 


StaffApril 24, 2019
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3min9690

STAMFORD, Conn., April 24, 2019 /AxisWire/ New Leaf Data Services, LLC (NLDS), the cannabis and hemp industry’s only independent Price Reporting Agency, has announced that Hemp Benchmarks® is now collecting, assessing and reporting on the wholesale price of biomass, dry flower, clones, seeds, crude hemp oil, refined hemp oil and CBD isolate. For more information, please visit: www.hempbenchmarks.com.

In the months ahead, Hemp Benchmarks® will expand its price assessments to cover additional end markets for hemp fiber and grain and begin to report on international markets as well.

“With the passage of the 2018 Farm Bill last year, the hemp market is poised for massive growth with unprecedented interest from farmers, processors and consumers, fueled in part by the extraordinary demand for CBD-based products. Industry participants will be seeking price transparency to analyze and navigate what we believe will be a dynamic and chaotic market as the projected supply and demand for hemp and hemp derived end-products comes into focus over the next few years.” said Jonathan Rubin, CEO of NLDS. “We are pleased to offer the market another independent reference benchmark to support strategic, operational and investment related decisions.”

These new assessments expand NLDS’ portfolio of benchmarks, which include more than eighty weekly benchmarks covering the wholesale price of cannabis in legal U.S. and Canadian markets through its Cannabis Benchmarks® division.

“We expect volatile hemp and CBD markets until supply and demand reach an equilibrium,” noted Rubin. “Price Reporting Agencies play a critical role in managing risk associated with volatile markets, enabling buyers and sellers to transact with confidence, support fundamental analysis by investors and equity analysts, and provide definitive benchmarks for commodity traders.”

About Hemp Benchmarks®
Hemp Benchmarks® is a division of New Leaf Data Services, LLC. Our mission is to bring price transparency and efficiency to cultivators, processors, distributors, investors, traders and other hemp market participants through validated, standardized wholesale price benchmarks and market intelligence.

Media Contact:
support@newleafdataservices.com
(888) 502-7298


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