A sharp dip has been registered in the hemp prices amid the growingly oversupplied market, revealed recent reports.
According to PanXchange Chief Executive Officer Julie Lerner, the price of hemp biomass scaled to as high as over $40 a pound earlier last year in July prior to the 2019 harvest arrived. Presently, it is barely trading below $10 a pound soon after a bumper supply that quadrupled from 2018 to 2019.
It is worth noting that the CBD consumer market continues to stay restricted as the US Food and Drug Administration has banned the extract in dietary supplements or foods. However, a large number of sellers continue to turn a blind eye to this ban. CBD has already become legalized in various other uses like topicals, but it should contain less than 0.3 percent TCH. It can be defined as a cannabis compound that gives you a high.
It is interesting to note that US prices for cannabis have also nosedived in several states and categories in the previous year.
When the wholesale cannabis market assessed the price trends, it discovered that statewide pricing in all the categories came down in all legal states barring Oregon and Washington. Meanwhile, prices also fell in all the categories except the ingestible and edibles’ categories.
Lerner said,
Every way you slice it, the physical demand for the CBD market is much, much smaller than the supply. I’m a little surprised that retail prices have not started to come down yet. There’s so much competition.
According to Lerner, the hemp market is full of worried sellers and opportunist buyers as of now. She also discovered the reasons behind this fall in the prices of hemp and came to the conclusion that farmers are growing hemp in a larger quantity and demand is not as high. The demand and supply gap has led to this situation.
Learner was also quick to predict that industrial demand for hemp will ultimately dominate the CBD market. However, it will not happen as long as prices do not drop even further.