I wanted to hear some of your guys opinions on when you think the CBD/Hemp market will stabilize.
Right now we are still lin a pretty gnarly oversupply (in my opinion) and prices are almost certainly going to be going down more.
Right now I’m seeing…
Biomass: $4-6/Lb
Crude: $250-350/Kg
Distillate: $750-1000/Kg
Broad spectrum (compliant): $1500-1800/Kg
T-free Broad spec: $1800-2000/Kg
But I’d love to hear some predictions on if prices will continue to drop, and for how long.
I have investors telling me they think it’s almost bottoming out and are looking to buy up a bunch of crude for “dirt cheap” at 250$/Kg…:
My concern is that the “bottom” is still 6-12 more months out and the price war really begins once companies start going out of business and liquidating their stock below costs… which forces more companies out of business, which will lead to them also selling their inventory below costs, etc. etc.
Also, I understand that in say 10-20 years prices will likely be significantly lower due to economies of scale, I’d be looking for a 6-months too 5 years prediction, what will this market look like and how low will it go?
Thanks for your insights, are we close or are we super far off?
I think the FDA controls everything right now. The bottom comes when they finally issue clear guidance about the legality of all cbd products, and then large companies are comfortable enough to enter the cbd market, therefore increasing demand and prices.
lots of despair. i’m thankful it happened so quickly. make the oil worthless, it’s better for the public. they’ll be able to get the oil without breaking the bank.
I know it’s obviously not apples to apples but the price of wheat is around 0.07$/lb so by comparison hemp is still a “cash cow” but realistically there is a LOT more work that goes into farming/harvesting/drying hemp than there is for wheat.
I’m not a farmer so I cannot attest to this, it’s my belief that the bottom of the market is just above the price of production for hemp farmers (similar to wheat) and that will ripple up the supply chain.
I don’t know that answer either. many guys get product for free on split deals, if they’re smart they’re currently selling at the best price offered in the market to offload all inventory.
Yes, this is not meant as a beat down on guys who are already beat down, more of information to help guys make decisions (mostly if you sit on inventory - it will be to your detriment)
I think we are close to the bottom if not there already. With 2019 harvest beginning to rot or be processed, input supply is beginning to decrease. Q2 will come and there will be demand for smokable/finished goods with much less supply, bringing the price back up. 7-1100 for Crude, 1500-2K for distillate.
As a processor margins are tight but not unreasonable if you’ve integrated properly.
Or I could be wrong and out of business in the next year. Either way its been a hell of a ride.
I don’t see any rebound this growing season or next, enough oversupply to carry right on through to 2020 harvest. Lots of new growers, new states, to replace those that drop out… It’s an unsustainable market for most extractors, so it cant really go much lower; but I don’t think its going back to $1000+/kilo crude anytime soon if ever.