CBD Hemp Prices are Slipping as US is Producing 8X Over Demand, is a Price Crash Imminent?

No doom-and-glooming, just interested in what people not invested in clickbait article headlines think.

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Couldn’t find a pure News category so apologies if mis-categorized.

barriers to entry are a lot lower for cultivation. Gonna be a lot this harvest season.

"Presently, based on data from HempBenchmarks.com, hemp farming has 400,0000 acres allotted for permitted land. If 30% of the allotted acreage was planted, that would amount to 120,000 acres. If each acre creates 1,500 pounds (which is a conservative estimate), then the acres would ultimately yield 180 million pounds of biomass. Considering that lb. essentially amounts to 0.026 kg of isolate, the total isolate yielded from 180 million pounds of biomass would amount to 4.7 million kg of isolate.

To keep up with the processing necessary to extract that much isolate, the industry would need to have a capacity that can process 500,000 pounds every day for a whole year. As a result, by having far too much raw material, the price would have to drop, which is incredibly worrisome for hemp farms."

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Perhaps it is a matter of giving thanks for the scammers. I just spoke with a company in Illinois run by some folks I know. They will have to destroy 17 of 20 acres due to bad lab results. They bought bogus seeds…80 k worth. In hindsight, 80 k is too good to be true for doing 20 acres.

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Personally, I expect the FDA to have a final answer before the end of October which I expect to open the the floodgates and any price crash will be related to streamlining production.

My 2¢

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In other words, I believe demand is artificially low due to the FDA not having a final stance.

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Yes I think a crash is imminent

And then everyone will switch to CBG and there will be oversupply as well

Just my opinion

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Taking that equation to it’s logical conclusion, what would 4.7M kg of isolate look like in consumer products?

A couple examples:
An average 30ml dropper bottle with 250mg of CBD. 1 gram would equal 4 bottles. 1 kilo would equal 4000 bottles. 4,000 bottles x 4,700,000 kg = 18,800,000,000 dropper bottles.

An average 25mg gummy bear in a 20 count bottle (20x25=500mg/bottle). 1 gram would equal 2 bottles, 1 kilo would equal 2,000 bottles. 2,000 x 4,700,000 = 9,400,000,000 bottles.

The current world population is approximately 7.7 Billion people. That’s 2.44 dropper bottles per person or 1.22 gummy bear bottles per person. Given that the user base of CBD is but a small fraction of the world population currently one could calculate that we just might have an oversupply especially when factoring in that most of the U.S. supply stays in the U.S. and there are other countries also producing CBD.

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I don’t follow from the article if they are assuming there is a lack of 500k lb/ day processing capacity or not. I think looking at the potential consumption rate is a sounder approach. I don’t know if 30% of allotted land is a good “fudge factor”, seems like there are multi-year historical state-level metrics that could be referenced. Some combination of “% actually planted”, “% hot/ destroyed”, “% not grown for CBD” etc. to come up with the figure would be better.

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Absolutely, I think the OP’s article methodology is flawed for that reason and more, I’d suspect average hemp output this year is going to be well below 10% CBD content for a couple reason, first is so many newbies farming that don’t have experience with hemp and won’t do a great job of getting rid of males and herms, second is that the federal farm bill adopted the .3% cap on THC instead of 1% like Oregons pilot program had. Other reason is that not all biomass is going to distillate, some will go for smokable and the extractable isn’t all going to isolate either, plenty of demand for distillate and Tfree disty from what we’ve seen

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Hearing Oregon’s laws relating to hemp thc are changing and not for the better.

The new delta 9 # will be a combo of thc & thca - get ready cause all crops will be hot if that’s the testing method. Not to take affect til January 2020.

The CBD Hemp prices might drop slightly in the short term. However in the long term, the prices should be picking up as CBD becomes readily available, the general public has a greater understanding of CBD and more importantly the demand from manufacturer for CBD increases.

With increase marketing, consumer education and awareness campaign for benefits of Hemp, there will be a steady increase for hemp.

Note, the majority of hemp product is being used for CBD. Can you imagine when hemp fiber is infused into the textile market? Image hemp bioplastic…etc.

Help spread the word about hemp. Help share the hemp knowledge.

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All articles from medical sources say cbd has side effects, may be hepatoxic, and few proven benefits outside of seizure reduction. & not only does it not make you feel good, It reduces the effects of molecules like THC that do make you feel good or high. Their estimate of use is just so bloated it blows my mind

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Yes, I’m very disappointed on lack of mobilization towards using hemp for anything beyond CBD. Keep hearing all about fiber, paper, plastic, yet people are extracting and then treating the depleted hemp as waste and can barely give it away.

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Certainly not everyone is is treating it as waste. Hempcrete is going to be big, I’m sure.

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I’m not sure I buy the assumption that there is a lack of processing facilities. Most of the facilities I know of aren’t even close to running 24x7 yet and they aren’t likely to spend more money on expansion until they are running at capacity on a consistent basis. It’s also hard for them to forecast if the balance of their work is spot contracts vs. monthly contracts.

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Agreed, I also believe that the low potency will also contribute to a price slide. Processing costs (not fees but actual costs) aren’t going to change much but a lot of the margin for farmers will likely disappear but that’s inevitable anyway given the current state of the market.

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Well that’s the nature of farming anyway to work at the bottom of the supply chain at wickedly low margins. I expect ultimately hemp will drift in the long run like peanuts which today sits at just over 20 cents per pound or $425 per US ton. And farmers make a profit at those prices at scale. That I think is the long term future. And as a farmer that will be ok but not great.

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Considering that I can still source biomass and smokable flower and distillate and isolate, and the 2019 harvest is here, which means That anything above what was planted in 2018 will be excess
Many good growers scaled up this year too
Lots of hurt feelings and failures but still prices gonna go down

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Oh there are people working on that very quietly I interviewed with And agriculture company based out of Canada that had a 5000 in acre him grow in Montana That was really focused on applications for all the biomass waste streams. So they were really focused on things like building materials with him but what was especially interesting was the application for photovoltaic cells. CBD when reacted with a strong base leg sodium hydroxide or calcium hydroxide will yield quinones Which from a very high-level overview can be used to create batteries

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