A new report from the Brightfield Group titled “Hemp Cultivation Landscape” was released this month that suggested, “On average, hemp could command revenues of over $40,000 per acre planted, depending on quality and yield.”
Here’s how the math works according to the report:
- The average number of plants per acre was between 1,500-2,000
- The conversion of flower to CBD averages 40 lb/kg
- The yield per acre is on average 20 kg/acre
- This brings a range of revenue per acre to between $30,000-$50,000 per acre.
The report also gave a sample list of the largest U.S. cultivators that have planted over 100 acres.
Lilu’s Garden is the largest hemp manufacturer. The company said that its 2019 harvest is on track to bring in 50 million pounds of hemp or 1 million kilograms if isolated CBD. The hemp is processed in a 175,000 square foot plant in Owenton, Kentucky. Lilu has planted 75,000 acres, which is a record quantity achieved by partnering with numerous farmers.
Eureka 93 has 19,000 acres planted and is a combination of several companies. LiveWell Canada, Acenzia and Vitality CBD Natural Health make up this company that farms in Montana. It has extraction facilities in Montana and New Mexico.
Integrated CBD farms 10,000 acres in Arizona using organic farming processes. The report said that Integrated has the ability to process 200,000 pounds of biomass per day. and 1.3 million liters of distillate per year.
Australian company Elixinol has 4,942 acres in Colorado and Crop Infrastructure Corp. farms 2,115 acres in Nevada.
The report did not shy away from the challenges of growing hemp. “There is a lot of
manual labor involved in hemp cultivation, especially during harvest. Due to the newness of the industrial hemp industry in the U.S., there are limited choices in machinery for harvesting hemp so some farms are retrofitting their machinery to harvest hemp floral material (where the CBD content is highest).”
The plant requires space between the plants, much like tobacco and unlike corn, which can be grown in rows. The report also noted that some companies promise farmers to buy their hemp and then renege on the deal. There is also the issue with the plant’s sex and cross-pollination. Farmers apparently have to make sure the male hemp plants aren’t too close to the female plants.
“Despite these challenges, hemp offers a chance for family farms facing low commodity prices for corn and dairy to increase their incomes. On a per acre level, hemp for CBD is many times more profitable than hemp.”
Brightfield looked at where the top U.S. CBD companies were getting their hemp and of the 21 top companies, 69% sourced their product within the U.S. The report noted that consumers feel strongly about hemp from the U.S. The four companies that get their hemp outside of the U.S. were Epidiolex (GW Pharmaceuticals), PlusCBD Oil (CV Sciences), Medical Marijuana and Nature’s Plus made by Hempceutix.
As the U.S. grows more hemp, Canadian acreage has declined from 140,000 acres in 2017 to 78,000 in 2018. In Asia, China leads the way with 250,000 acres of hemp. In Europe, France and Romania each farm about 40,000 acres.
Brightfield Group predicts “growth in acreage from 2019-2020 will be significant because of the 2018 Farm Bill and the additional states that enacted hemp regulations and legislation before, during, and after the hemp growing season in 2019 (e.g., Ohio, Georgia, Florida). Prices will decline as more hemp enters the market and value will move to process and branded products.”
The company also believes the U.S. will stop importing hemp giving more opportunities for U.S. farmers. There may even be a demand for the U.S. grown hemp, creating a market for the farmers in the states.