Connect with us

Hemp Industry Updates

CBD Market Could Soon Crash, Due to Massive Hemp Oversupply



CBD Market Could Soon Crash, Due to Massive Oversupply
- Ad -
  • The CBD market was unable to meet the demands of legalization in Washington and Oregon initially, leading to overproduction.
  • The United States is set to produce approximately eight times the amount of hemp needed to meet current demand, leading to a potential price crash.

In the United States and Europe, the desire to get involved with the CBD industry is massive, leading many companies to launch their products and wait for the profit to start coming in.

However, a recent article surfaced from HT suggesting that the influx of CBD could lead to a much different fate – a violent crash – before the year even ends. Analysts estimate that the US is already exceeding the production of hemp that could be reasonably consumed by eight times over, and that isn’t a good sign for the market. Co-CEO Chase Nobles of commented on this production, saying:

“With many businesses and farms still just expanding into the industry, the boom in growth is leading to a massive price crash in all forms of the product.” He added that the derivative prices are falling, even though the farms are choosing to hold onto their prices, which may “make the crash swift when it happens.”

Kush estimated that, based on the 180 million lbs. of biomass that would bring in approximately 4.7 million kg of isolate this year, the market demand would only be one-eighth of what is produced. The average price per percentage point on 10% raw CBD material was $3.94 in July, but Nobles believes that this price will go down to $2.30 when early harvests are accounted for, and the price will only get worse in October.

In August, the price continued on their downward trend for biomass, and reported discounts on larger volume deals. HempBenchmarks stated that the main reason for the lower biomass prices has to do with the producers that are looking to eliminate old, low-quality plant material, though they also credit the degradation of CBD potency through the year.

Oversupply issues in the US have also adversely affected European stakeholders, as the US has continually been a major hot spot for CBD producers in Europe. Even from August last year to August this year, the prices were cut in half. One major player in the European market noted,

“We’re having to adjust prices monthly because there is so much isolate out there. We have no idea where the pricing will bottom out.”

The only time Noble says that he has seen this crash phenomenon in action was with the legalization of marijuana in Oregon and Washington state. The sudden legalization came with a high demand from consumers, but the supply wasn’t prepared, leading prices to jump. This situation is unfortunately much worse and led farmers to increase their production with the hopes of securing profit from these inflated prices.

Considering the seasonality of farming, it is difficult to know what other farms are producing, and each massive harvest contributes to a massive price crash. When local farms come away with little to no profit, they are essentially forced out of the industry.

Noble commented, “Farms that go out of business are typically bought by a naive purchaser, who repeats the same mistakes of overproduction without building downstream demand or growing under contract.”

Emma Jay is one of the most esteemed suppliers of TOC cannabis content who loves to find facts and figures as well as stuff plenty of statistics and tidbits backed by research. Stemming with authenticity as a Certified HIPAA Professional in healthcare, Section 504 Coordinator Certificate in Legal and Certified Housing Asset Manager in Real Estate. Boasting over a decade-long stint in community healthcare, EJ will now be helping carry the TOC torch into the future.

Continue Reading

Ultimate CBD Guide


ultimate-cbd-products-company-guidepopular-cbd-health-benefits best-cannabidiol-guide-resources hemp guide

TimesofCBD is the most active daily CBD news publication featuring the latest cannabis industry stories and marijuana market trends. As the leader in CBD-centric content curation, we invite all readers to come for the headlines and stay for the insights. Quality is the top priority when presenting user guides, analyzing product reviews and reporting fact-checked news announcements. All information is for educational and informational purposes only. Disclaimer.

Got news? Email

Copyright © 2020 | Latest CBD News, Cannabis Guides and Marijuana Trends
Note: Always seek real additional medical advice and consultation with a professional healthcare practitioner before considering any CBD. No statements found on this website have underwent Food and Drug Administration evaluation. The efficacy of any products or claims made have never been approved by the FDA either. No products shall ever be intended to diagnose, treat or cure any disease or prevent any ailment.