Delta-8, smokable flower saves hemp farmers

Delta-8 and smokable flower are the two products that keep hemp framers alive. The regulatory loophole that allowed Delta-8 to be sold legally also creates legal confusion.

Delta-8 is a cannabis product that can be derived from hemp, but still offers the consumer a slight psychotropic experience. Some states have placed restrictions on the product while others have not addressed it at all. In any case, the demand was a boon for hemp farmers who had planted many acres in 2019 and expected a surge in CBD products only to see the market contract and prices collapse.

Photo by CRYSTALWEED Cannabis via Unsplash

Hemp benchmarks reported that the average price of delta-8 THC distillate fell 1% to $ 1,215 in June, after rising 4% in May. “Remarkably, both the lower and upper ends of the observed transaction data – $ 900 and $ 1,650 per kilogram – were up compared to May.”

In Georgia, Reginald Reese of Green Toad Hemp Farm told Hemp Benchmarks that Delta-8 THC will stay here. “The nice thing is Georgia refused [delta-8] forbid, ”he said. “As licensed cannabis growers, we have the right to use any part of this hemp.” Reese also told Hemp Benchmark that he believes the Delta-8-THC ban efforts are part of a “full press” by the companies who participate in licensed, state-legal marijuana industries that the competition doesn’t want.

Smokable flower grows

The other product that has been welcomed by farmers is smokable flower. The benchmark reported that as of June 2021, the number of square meters registered for indoor or greenhouse hemp production, which is normally used to make smokable CBD flowers, has increased significantly compared to the previous year. “Hemp Benchmarks has registered over 168.2 million square feet for indoor or greenhouse production. That number is up 328% from over 39.5 million square feet in June 2020 and 85% from over 90.8 million square feet that was finally documented late last year. “

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It appears that farmers are leaving outdoor growing and focusing on indoor growing to meet the demand for smokable flowers. The benchmark report documented that smokable CBD flowers held up their value in the US hemp wholesale market better than perhaps any other hemp CBD product. “Flowers grown indoors or in greenhouses typically cost more than those grown outdoors.”

The benchmark report said smokable CBD flowers saw their average price decline in June after climbing above $ 300 a pound in May. “Despite some reports of still stagnant demand for CBG, the price of smokable CBG bud rose 15% in June to an average of $ 326 a pound, beating the price of its CBD counterpart. The significant increase in the estimated price of CBG flowers this month follows an increase of over 50% seen in May. ”This shift away from biomass and towards floriculture could potentially stabilize the biomass market. A reduction in supply could support wholesale prices.

Locusts?

The problems affecting hemp crops this season could help reduce the oversupply of hemp stocks. Excessive heat and drought in the western United States have affected hemp farmers. The threats from forest fires and water reduction have also conspired to challenge the hemp farmers. And as if that wasn’t bad enough, locusts seem to love warm, dry weather.

RELATED: Cannabis Investors Should Know the Difference Between Marijuana and Hemp

Last year farmers battled locust infestations and it looks like conditions are ripe for an even bigger outbreak this year. The June report from Hemp Benchmarks noted that the U.S. Department of Agriculture should take steps to mitigate damage to crops and grazing land by spraying pesticides in areas likely to infest, including about 3,000 square miles of Montana, in the significant hemp production, mainly for grain.

Less hemp cultivation area

Hemp benchmarks reported that as farmers move into the 2021 season, less hemp will be grown. Several reasons have led to the less than excellent outlook for the market. An oversupply of biomass and CBD led to a drop in prices that reduced the profitability of the harvest. Growing more mainstream produce has become a better investment. The hemp market has also been hit by a lack of regulatory guidance, which has also resulted in farmers getting away from planting more acreage.

Photo by MysteryShot / Getty Images

Hemp Benchmarks stated to have documented the following licensing and acreage data for hemp for 2021:

• 8,298 licenses issued (-8% less than 9,066 counted in June 2020; 58% less than 19,799 ultimately documented for 2020);
• 107,702 acres registered for field production (down 55% compared to 236,732 acres documented in June 2020; less than 75% compared to 429,300 ultimately documented for 2020).

CBD breakdown

It appeared that almost every product on retail shelves contained some form of CBD. Groceries, beauty products, and nutritional supplements appeared on every store counter. The future looked bright for hemp farmers, but demand did not follow expected levels. Thousands of CBD companies sprung up overnight and the deluge of products created a confusing and competitive landscape.

A new report from the Brightfield Group says the CBD industry has lost more than 1,000 players in the past 12 months – some to corporate consolidation and others to bankruptcy. Hemp Benchmarks also cited farmers who said there was a lot of cheap inventory in the market due to bankrupt companies. The Phoenix Business Journal reported at the beginning of the year. that Integrated AG, the parent company of Integrated CBD, filed for Chapter 11 bankruptcy protection on Jan. 20 and disclosed over $ 20 million in outstanding debt.

Despite all the negative news, California-based Kadenwood, a privately held CBD consumer products company, completed a Series B cash raise of $ 30 million last month. The company said it will use the money to buy advertisements and acquire additional businesses. Kadenwood said the increase also includes a $ 20 million media campaign to increase brand awareness and bring the total value to $ 50 million.

This article originally appeared in the Green Market Report and was republished with permission.