This is an immature market that is still looking for its equilibrium. I feel bad for farmers who went all in on the promises of massive profits.
NEW YORK (TNS) — It may not be apparent when you’re spending $70 on CBD foot cream, but hemp prices are plunging amid a “grossly oversupplied” market, according to the head of the industry’s first price provider.
Hemp biomass prices reached a high of over $40 a pound in July, just before the 2019 harvest came in, according to PanXchange Chief Executive Officer Julie Lerner. Today, it’s trading under $10 a pound
following a quadrupling of supply from 2018 to 2019.
Meanwhile, the CBD consumer market remains limited as the U.S. Food and Drug Administration continues to prohibit the extract in food or dietary supplements, although many sellers ignore that mandate. CBD is legal in other uses, such as topicals, as long as it contains less than 0.3% THC, the cannabis compound that gets you high.
“Every way you slice it, the physical demand
for the CBD market is much, much smaller” then the supply, Lerner said in an interview. “I’m a little surprised that retail prices have not started to come down yet.”
Today, the hemp market is “rife with desperate sellers and opportunist buyers,” Lerner said in her December analysis of the industry.