August 2020 Hemp Spot Price Index Report
With reports that the 2020 harvest is beginning in earnest this month, there is significant uncertainty amongst market participants as to how farm gate prices for hemp plant material will respond to the influx of new production. With 2020’s crops not yet dried and processed for sale for the most part, this month’s assessed prices for last year’s CBD and CBG Biomass were down from July. However, based on our observations from over five years covering legal cannabis markets, wholesale prices can increase with the arrival of a new fall crop, as fresh plant material can garner better rates than that which is nearly a year old.
We pointed out in last month’s report that registered acreage for 2020 is down about 30% year-over-year. Early reports from state officials suggest a smaller percentage may have been planted this year compared to 2019, when only about half of registered acreage was farmed.”
Reports from the field indicate growing conditions were mixed across the U.S. Oregon, one of the country’s biggest hemp-producing states, appears set to see a bumper crop if conditions hold. Elsewhere, farmers reported that high heat and drought have led to plants flowering prematurely, leading to earlier harvests and lower yields. Persistently dry conditions in many parts of the country should help producers better preserve biomass and flower from mold that rendered unsaleable a significant portion of last year’s crop. Overall, though, Hemp Benchmarks still expects that 2020’s production of CBD and other cannabinoid-rich biomass will be down from last year, possibly significantly so.
As prices for most hemp products covered by our reporting declined in August, one area of notable increase was the rate for smokable Bulk CBD Flower. Additionally, Hemp Benchmarks this month began to collect price data on smokable CBD flower by grow type: indoor, greenhouse, and outdoor. We do not yet have enough data points to justify publishing official assessments, but early observations show prices for indoor-grown flower are elevated compared to those for greenhouse product, with the former sometimes going for as much as double the latter, while outdoor-grown flower generally fetches the lowest rates.
It is important to note that the outdoor flower being traded currently was harvested last year, which is likely contributing to lower prices. Indoor and greenhouse operations generate multiple crops annually, so on-hand flower is typically fresher, with better appearance and aroma. Seed and clone sellers have reported an uptick in the amount of growers using their stock for indoor and greenhouse operations with multiple annual harvests. The increased prevalence of higher-priced indoor and greenhouse-grown smokable flower helped push overall rates for such product upward.
Prices for all forms of extracted CBD and CBG saw significant deterioration this month. Among this group the significant drop in the price of THC Free CBD Distillate is especially notable, as such product had previously been observed to retain value better than other CBD extracts. Reports from market participants have indicated that processors have been increasingly focusing on THC remediation of Crude and THC-containing Distillates, rather than processing biomass, which may have contributed to the downturn in THC Free prices.
With rates for CBD and CBG extracts sliding, another new development observed in our price data this month was transactions involving delta-8 THC products. Delta-8 THC is not derived from hemp plant material, but synthesized from extracted CBD. Our Price Contributor Network provided nearly two dozen transactions for delta-8 THC Distillate this month, with prices ranging from $1,800 to $3,500 per kilogram. Observed asking prices on exchanges and marketplaces exceeded the average confirmed transaction prices by several thousand dollars.
Additionally, some sellers are infusing smokable hemp flower with delta-8 THC distillate. Such product is being hawked at high asking prices, though again we will publish official assessments once sufficient data is able to be collected. We discuss delta-8 THC more in this month’s report, including its contested legal status. For more news, price assessment details, and analysis, subscribe to the monthly Hemp Spot Index Report.
August Report Contents
Growing Season Update
Harvest begins. Reports from farmers and agronomists across the country on crop health.
Favorable growing conditions in Pacific Northwest. Heat and drought impacting the West and Grain Belt. Hurricanes saturating fields in the South and Atlantic coast.
Oversupply and Continued Price Concerns
As this year’s crop begins to be harvested, what impact will the remaining 2019 crop have on pricing?
USPS delays impacting CBD product deliveries
Hemp Transportation Costs Update
Shipping prices remain high with demand far outstripping truck availability.
Producer Survey Results
Several hundred hemp producers responded to our 2020 Hemp Production Survey. We analyze the results and provide key findings.
Federal Regulatory Updates
Challenges with USDA IFR continue as states begin rejecting the current state of the rules. Major concerns raised over DEA announcements and how the IFR could impact the industry.
Smokable hemp legalization is challenged in several states. New storage options emerging for hemp biomass.
Advances in hemp breeding. Research to identify most suitable hemp cultivars for different growing regions receives funding and support from several major universities.
Latest news on status of hemp operations and legislation in Arizona, Georgia, South Dakota and Texas.
CBD status in the European Union continues to place industry in jeopardy. Hemp production in Poland continues to expand as cultivation efficiencies lower costs for farmers.
As prices for most hemp products covered by our reporting declined in August, one area of notable increase was the rate for smokable Bulk CBD Flower.
Wholesale Hemp Prices
A Look at 2020 and Beyond
Kush.com sees hundreds of wholesale hemp transactions every month from across the United States. This perspective on wholesale hemp & cannabis prices is a useful tool you can use moving into the second half of 2020.
Below you’ll find prices for different hemp categories over the last 6+ months, and the current market wholesale hemp prices. We will occasionally update this page with new data throughout the year, so be sure to bookmark it.
Wholesale Hemp Biomass Pricing
CBD content and quality matters! The lowest recorded price was under $7 per pound while the highest approached $40 per pound.
CBG Biomass has averaged around $61 per pound over the same period.
Wholesale CBD Crude Oil Pricing
The average price for smokable CBD concentrates has been around $9.52 per gram.
The average order size since November 2019 has been 11 kilograms.
Wholesale Hemp Flower Pricing
Since February 2020, the whole hemp flower price has held steady around $160 per pound.
Nearly 300 transactions were used to calculate this data providing a solid baseline for the hemp industry.
Wholesale CBD Distillate Pricing
Since January 2020, the average price for CBD Distillate has been around $1,360 per kilogram.
Other popular cannabinoids such as CBG, CBC, and CBN continue to increase in demand.
Wholesale CBD Isolate Pricing
“Samples” or small orders of CBD Isolate sold for upwards of $5 per gram.
CBG Isolate ranged from $5 per gram to over $10 per gram depending on the size of the order. Wholesaler buyers are commonly seeking discounts when ordering in bulk.
Wholesale Hemp Seed Pricing
When sold by the pound, the average price for hemp seeds has been around $578 per pound since December 2019.
Looking at per seed prices, we have seen everything from $0.15 per seed to over $1 per seed, but find that the average cost per unit is around $0.55 for quality genetics.
The average price for CBG seeds has been $6.53 per pound during the same time period.
Wholesale Hemp Pre-Roll Pricing
As mentioned before, quality matters! Hemp and CBD Pre-Rolls ranges from a low of $0.75 per preroll to $1.50 per unit. That is a HUGE spread considering the supply available on the marketplace.
The average wholesale order size for hemp pre-rolls was right at 212 units.
Wholesale Hemp CBD Edibles Pricing
Hemp infused edibles continue to climb in popularity, but show a large variance in price based on category.
Wholesale prices have shown hemp edibles sell for between $0.18 and $1.00 per unit with an average order size of 1,200 units.
More and more buyers are searching for CBD infused edibles and the pricing trend could continue to climb.
Current Wholesale Prices
To calculate the current wholesale hemp prices we looked at sales over the past 60 days.
How Price Indexes are Calculated
No data set is perfect. There are some considerations to take, when looking at the analytics and making your own business decisions.
- The Kush Marketplace is B2B, prices will differ for direct sales
- Within product categories, quality of the product can vary
- Additional costs might have been added depending on packaging or shipping concerns
- Large orders often involve a price break, and smaller orders may drive the average price higher
- These sales took place on Kush.com and could differ from prices on the outside marketplace
Ultimately, I’d recommend giving these numbers a margin of error of about 10-15%, and judge your products quality honestly before pricing higher or lower on the spectrum.
Hemp Outlook for 2020: Are Things Looking Good or Bad?
As we enter the second half of 2020, where do we see prices going? There’s always two ways to view a trend, and usually both sides have good reasoning.
Bullish Perspective: The Crash is Over
Even with the charts largely trending down, there’s plenty of positive points to look at moving forward. To start, prices seem to have hit the bottom and flattened out compared to ‘Pre-Covid’ price crashing. Additionally there’s been a small uptick in pricing in nearly every category in April to May.
Another positive could be the rise of ‘Self Care’ products following Covid-19. CBD is being introduced into home products at high rate, many of which are currently seeing a rise in demand. (Yes, there’s already CBD Hand Sanitizer.)
Virus aside, the demand of CBD could rise dramatically in the coming months and years on its own. Here’s a quote from a recent Forbes article written by Abbie Rosner, and published on May 29th:
Because boomers’ awareness of CBD’s health benefits is growing, Lee explained, many are shifting from trial use to becoming daily users. In fact, the number of boomers who reported using CBD 5 or more times per week rose from 36% in 2019 to over half (56%) in 2020, according to Brightfield Group’s consumer insights. They also found that 19% of boomer CBD consumers reported using CBD multiple times per day.
Bearish Perspective: Rough Harvest Ahead
It’s not difficult to be negative in 2020, and the hemp market isn’t immune. Many hemp businesses have closed shop, and this could mean a flattening or dip in supply, but it also means more ground for the consolidation of big brands. As with any emerging market, smaller operations will be forced into niche areas while a few big brands start to dominate the main stage. Harsh outside conditions will only speed up the process, putting out smaller farms and leaving the market open for big players.
Harvest is coming! If prices stay low into July-August, the first batch of light dep plants will be harvested flooding the market with supply. It’s not likely prices will start to rise steadily while supply is increased, so the best you could hope for is a steady market come September and ‘Croptober’.
If you’re looking for a consistent supplier of CBD Isolate at a fair price, check out the listing below:
Since 2/20, wholesale hemp flower prices have averaged $160/lb, CBD Distillate has been around $1,360/kg and small orders of CBD Isolate sold for $5/g.