In a recent report, Andy Au, CEO of Oregon-based Octave Labs, told Hemp Benchmarks that Hemp-CBD prices have not yet bottomed. Given the oversupply of hemp biomass, the price of hemp isolate went from $500 a kilo down to $310 per kilo.
While Brett Eaton, CEO and founder of Green Cherry Organics in Fort Collins, Colorado, argues in favor of consolidation among firms “to push the hemp industry forward,” Veronica Michael, CEO of North Dakota-based Prairie Products said she'd like the federal government to stop restraining large companies from including CBD as an ingredient in their products.
Eaton contends that future regulations will inflate the cost of doing business, “especially for small businesses” that will need to understand how to navigate “cost-prohibitive” regulations. The hemp glut of 2019 was a major factor in the price drop of hemp and CBD products. The US can only reasonably consume 22.5M lbs of 10% CBD hemp in a year. However, in 2019 the country produced close to 180M lbs – eight times the amount it could consume.
Once harvested, hemp has a high yield of edible proteins and fibers with more than 50,000 product applications. The demand for industrial hemp products is growing, owing to increasing awareness about its health benefits. Although, factors such as its complex regulatory structure could hamper market growth across the globe, reported Verified Market Research earlier this year.
In addition, the oversupply of US hemp is hampered by the lack of processing outlets, reported New Frontier Data.
Industrial Hemp Market was valued at $5.5 million in 2020 and is projected to reach over $25 million by 2028, growing at a CAGR of 13.57% from 2021 to 2028.
Jonathan Miller, general counsel for the U.S. Hemp Roundtable told Benzinga, that the public FDA statements that it is illegal to sell ingestible hemp-derived CBD products have taken a toll on the industry.
Miller argues that there’s a simple solution for this problem: regulate CBD.
According to Miller, regulating the hemp industry could constitute an economic stimulus package for the nation’s farmers and small businesses without requiring one dime from the American taxpayer. It could also create new jobs in agriculture, manufacturing, distribution, retail, testing and other fields in the hemp supply chain.
Photo By Gina Coleman via Weedmaps