The Hemp Benchmark recently released its July 2020 report reviewing wholesale prices for the hemp industry. The group found that price assessments in recent months have shown stabilizing rates for numerous wholesale products that are part of the hemp-CBD supply chain. “For example, from April through this month the aggregate price for CBD Biomass and wholesale prices for smokable bulk CBD Flower have both steadied. While the downward trend in CBD product prices has largely subsided in recent months, that for CBG biomass and extracted forms of the cannabinoid has continued.”
Hemp Benchmarks also found that the 2020’s licensed acreage declined by over 30% from last year, while indoor and greenhouse square footage registered for hemp cultivation is down by roughly 64% year-over-year. “These numbers bear out what we have reported earlier this year, that many farmers are taking a more conservative approach to cultivation, if not exiting the sector entirely. The just over 18,000 cultivation licenses that we have counted nationwide to this point in 2020 represents about an 8% decline compared to the over 19,500 recorded in 2019. This indicates that most growers registered smaller outdoor plots or indoor / greenhouse sites.”
The report also said that overall, the reduction in licensed acreage, entrance of a significant amount of new farmers, tough market conditions, and difficulties related to the COVID-19 pandemic suggest that total U.S. hemp production for 2020 could decline substantially year-over-year, particularly in regard to how much CBD or other cannabinoid-rich biomass is generated.
“In our June report, we analyzed data on costs to transport hemp and hemp products. We also pointed out that such costs can change based on a variety of factors. This month, hemp transportation costs were on the rise in July due to fallout from the COVID-19 pandemic.” Jon Wilcox, co-founder of hemp transportation company Fide Freight, attributes the rise in shipping costs to states across the country reopening after coronavirus-motivated shutdown orders. He stated, “It is assumed that shippers are trying to make up for lost time and … make as much money as possible due to short-term uncertainty.”
Additionally, U.S. ports are overloaded with goods that shippers are trying to move. This has resulted in bidding wars for trucks.