With CBD gold rush over, U.S. Hemp is but a shadow of its former self

[First of three parts]

As the gold rush in the CBD sector looks to be coming to a bitter end, it has left US hemp a mere shadow of its former self, with reports showing the industry has shrunk by roughly 80% from at its 2019 peak.

A total of 107,702 open-air acres have been authorized so far this year, down from 511,442 three years ago, according to Stamford, Conn.-based researcher Hemp Benchmarks.

The most critical measure, however, is actual harvested acres, which have averaged 22 percent over authorized acres over the past three years. By that measure, 2022 is on track to reach about 25,000-30,000 hectares this fall, down from 120,000, or about 20-25% of the total 2019 crop.

* Beloved; SOURCES: New Frontier Data; USDA; Hemp Benchmarks; HempToday

Gloomy indicators

Also, reflecting the fall:

Hemp licenses in 21 key hemp states fell 35% to 5,381 in 2022 from 8,298 in 2021, researcher New Frontier Data noted in a recent mid-year review. Colorado, historically the largest hemp state, suffered a 75% drop. in planted hectares, going from 18,715 hectares in 2021 to 4,727 in 2022; and Minnesota, the third-largest producer by last year’s crop, saw a roughly 60 percent drop, from 6,191 acres in 2021 to 2,005 this year, according to New Frontier. grew by 862 hectares in 2019; but the company’s revenue of $95 million was achieved on the biomass of only 57 acres, 6% of the planted fields.

NEAR
Wednesday: Part 2: Charlatans, bureaucracy and bad management
Friday: Part 3: Hemp will be relegated to a ‘special crop’

‘imbalance’

Grossly underestimating CBD’s decline as “a correction period,” but justifiably attributing the market wipeout to the bad luck of the CBD sector, New Frontier’s review noted that “the moonshot to the surface (of hemp ) was driven by the CBD boom, and proved to be very out of balance with the actual size of the cannabinoid market.

“When tens of thousands of farmers jumped into hemp production in 2019, they produced excess biomass that poorly met federal THC standards and often failed to meet the specifications of CBD product manufacturers,” according to the review of New Frontier, written by Eric Singular, director of the data provider who is also director of communications for crop seed broker International Hemp.

“We can say with confidence that a balance has finally been reached between supply and demand for hemp-derived cannabinoids,” Singular concluded.

Other pressures

In addition to the glut that CBD brought to Earth, the hemp farming sector is currently under pressure due to rising prices for traditional crops such as corn, soybeans and wheat, all of which have almost doubled in recent months due to a series of factors, calling the immediate attention of farmers.

Export restrictions on Ukrainian wheat as a result of the Russian invasion, drought in the western US, supply chain disruptions and high fuel and transportation costs are contributing to higher wheat prices. most staple crops, crops that farmers know well and can expect to cash in on. in the next two years or more.

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About the Author: SteveSossin

Welcome! I keep up on all the latest cbd and thc news!