Treu i am sure prices Will drop next year
Thar is filled with order s so are Many of the large proces equipment producers at large scales
I wonder If in the end toothpaste with cbd and god knows what. Other fancy product they can come up with to get the cbd sold
i think the price of cbd will drop so drastically in the next 3-5 years; many farmers will move to another industry.
A lot of farmers are using hemp as a last ditch effort to save their farms. most of these people just moved to these crops because they see the current rate going out there for Biomass. As all these farmers that failed in other industries come to the table with their massive land. Its gonna be scary for all involved.
Yes i think the CBD products will be fads too much like the cannabis industry was like 2-3 years ago…when all the states started legalizing…do you guys remember how many edible companies and drink companies were getting into the THC game…id imagine 80-90% of those companies are gone or have moved to other sectors.
This all just takes time to see how everything plays out a little. People moving all in on some of this stuff is crazy. Some of the money tossed around in this industry is just nuts too. Its seem like people move in millions and tens of millions. Id love to know historically how many companies on the S&P500 were just started with an influx of millions rather gradually grown from something small to what we see today. Id imagine very few.
Seems like no one went to business school yet wants to run a 100 million dollar business.
I’m really leaning towards how multifaceted the crop can be, as in, facilities processing hemp into all of the different possible products in one giant facility. Compartmentalized, of course.
CBD is what I consider the least valuable asset that hemp has to offer. (Mostly because I’m convinced CBD without THC and terpenes is significantly less potent.) Regardless, strains will likely be developed that focus on the tactile industry I think, super dense and durable strains that get crazy thick and tall.
Hempcrete, fabric, livestock food, etc. will probably be the predominant use for it. Henry Ford made a resin for a car body that he smacked with an axe and it didn’t phase the thing. So there’s other ways I can see this going. The CBD oil will probably become like a low-value byproduct of the industry.
i think Porsche just released a hemp molded SUV. I completely agree with every single word you just said. I think hemp will be used for products again like history has shown us its been used in just about every industry till prohibition.
I couldnt agree with you more with the CBD oil needing THC and terps, and im gonna take it further and say they need to be nearly matched as 1:1. Never looked at CBD oil being a low value byproduct but now that you said it…I really cant agree more. That is really a great outlook on this industry
A lot of the farmers who are sitting on large acreage and looking to jump into hemp, and have been growing cotton or soy or corn, are gonna be in for a surprise. Unless they have good consulting and are willing to spend hefty $$ on good genetics, drying facilities, etc, they will grow their hemp and it will likely be 3-4% CBD ditch weed & handled like any other industrial commodity. Which, is totally incongruent with the supply chain management that processors/manufacturers in the hemp and cannabis space require to maintain efficiency and quality product.
Lots of buyers were not even interested in looking at biomass that tested below 10% CBD this year. When farmers mow it down, dry it in the field, then shred and chip it, stalks and all…well you all are aware what effect that type of handling is going to have on the material as far as further processing goes. It’s crap.
I don’t see the price dropping too much this year as the national and international market really opens up. Especially since some of the big agricultural states are not even going to start giving licenses to grow hemp until 2020.
Between Pharma, the FDA, the whales and the “get rich quick” dumb money out there, it’s going to be interesting to see where this market goes. I’ve been in the industry myself for 2 years and even since then it’s been interesting to see the developments. It really depends on where in the country you are though. In my own state the industry still seems very much in its infancy. Where I can only imagine what it’s like in OR or CO or even CA.
My primary long term goal in getting into hemp CBD extraction is basically just to get my foot in the door for recreational THC once it becomes legal here in NM. The little guys in the CBD market have a ton of challenges that may very well squash them in the next 2 years, but I see the THC market playing out more like the liquor industry. You’re going to have your Coors/Miller/Anheuser Busch of course, but there will be plenty of room for micro-producers like Ska brewery, Marble brewery, and everything in between. It would sure help to move into that market if you’re already setup with a fully equipped facility and some money in the bank to pay your way through all the government’s red tape. Not to mention being in an ideal position to start shopping for investors.
This is exactly why the futures types of investment instruments were created. Obviously regulations are the HUGE undetermined factor when trying to price this particular farm product but again this is where a futures exchange will succeed and flourish once level headed and hard working folks have the time to set it up.
This may be off topic a bit because you asked about this years crop and I am talking about potentially crops extending well beyond just the current financial crisis. Like so many others, I once invested daily in a form of the futures market called derivatives. Basically the same thing but derivatives cover any stock and not just commodities.
I engaged in what is likely the lowest risk investing there is - trading covered calls. A “call” is a contract similar to a futures contract. The way it works is you either buy or create a contract in which the underlying stock (or commodity) is to be sold at a future time for a known amount. The contract is “covered” if the stocks you are playing with are owned by you. So if I buy say GE at $10 per share I can sell a contract to somebody named a “call” that sets a future price that I MUST sell the stock at when the contract expires. I get paid money for the contract. Lets say I sell a call for the GE stock I bought at $10 per share for a selling price of $12 in three months. At the end of three months if the price of the stock has gone to $20 per share, I still MUST sell what is under contract for $12 per share. It locks in a price. In this case I would make $2 per share by selling for $12 what I bought for $10. However since the market went up to $20 it means that whoever bought the contract gets an instant profit of $8 per share so in theory we both profit.
Futures were created for things like farm products the same way. You agree in contract form to buy or sell a certain quantity of goods for a set future price. This helps farmers because they can lock in a price at the risk they end up selling in the future for below market value. This helps processors because they can then forcast exactly how much their future expenses will be, even if they end up paying more than market value. They accept this risk in return for a known future expense for their raw goods.
Once these farm products are 100% legal and past prohibition it will be the futures market that helps answer the OP question about how the market might turn out. This is without a doubt how this will play out in this industry over time. Once cannabis is recognized as a legal commodity it will be the futures markets that bring stability. The shit end of the stick on this is historical fact; farmers are always on the hook because of course crops fail but a futures contract does not care. If you sell a contract to provide a commodity but your crop fails then you MUST purchase the stuff on the open market at current prices to fill the contract. Ouch.
Perhaps in the future we will see some form of a futures contract market formed to bring stability, such as it is, to this market. Futures contracts stabilize markets by contractually stabilizing prices.
The thing that really kicked my ass in options trading was because I used it like a day trade sort of thing. So I ended up with multiple options trades by the end of the year. It turns out that because of how profit and cost basis works that any given options trade can eat up a LOT of accountants time during tax season. This is an unspoken expense and can really undermine any profits made. The trades can be simple but then again they can become very complex for just one trade. So when I engaged in day trading type of strategy boy o boy did my tax preparation bill skyrocket. Options confuse accountants because computing cost basis for any given trade is much more complex potentially than a standard stock trade.
I still trade a bit but stay out of options now simply because I hate the expense and tedium of preparing tax returns when doing it.
PCLN, MA, and AZO were my go to for monster call trades… nothing to make 25K in a day sometimes… I like the ability to not have the expiration date in the currency market so I can stay in a trade for months at a time and not have Theta burn or stay stressed the F out if the security I am along for the ride with takes a dip… And since the fx market is open 24 hours a day it feeds into my obsessive behavior. LOL…
CBD prices are going to fall hard after this years outdoor crop. Millions of acres growing in the South East. There are factories that have a thru put of thousand pounds a day if not more. I would recommend getting out of the game. It is time to partner up or be eliminated. Sorry the bad news.