Warning: trim() expects at least 1 parameter, 0 given in /home/customer/www/johnlothiannews.com/public_html/wp-content/themes/Divi/includes/builder/functions.php on line 12307
The Hemp Industry Has Room To Grow | John Lothian News

The Hemp Industry Has Room To Grow

Thom Thompson

Thom Thompson


As the third nationally legal industrial hemp crop hits the market, it is clear that American producers, consumers, merchants and processors are engaged, at an early stage, in a grand and exciting economic experiment to leverage an ages-old commodity into effective, reliable products for technologically advanced markets. 

According to the November PanXchange Hemp Benchmarks Analysis and Report, prices continue to languish at bargain-basement levels not only for biomass and CBD-priced refined products but also to a lesser extent for grain and fiber hemp. 

By now most, if not all, of the 2020 field crop has been harvested. According to estimates from our friends at PanXchange, about two-thirds of planted acres were dedicated to CBD-hemp, 7.5% for fiber-hemp, and 16.5% for grain-hemp, with the remaining acreage dedicated to seed-hemp. 

Nationwide, final figures for yields and total output may be hurt by localized weather conditions such as the August derecho that hit Iowa and Illinois, and the wildfires that hit the Pacific Northwest and California. While the number of acres reported to the USDA Farm Service Agency that were planted in hemp continues to tick upwards as expected, there was a moderate fall-off in acres planted in hemp.

These supply-reducing factors were likely not significant enough to boost national market prices for hemp. Depending on the severity of the effects on the field crops, it may translate into excess processing capacity in affected areas and we might see West Coast processors “importing” semi-refined product from the Midwest and South to satisfy local demand for CBD as an ingredient. 

With the crop harvested and on its way into storage or to processors and in light of the current low prices for CBD and other hemp,  demand factors are going to drive pricing for the next six to nine months. 

While prices for any type of hemp appear to be low and the prospects for profitability are uncertain at this point, these are probably good conditions for the hemp market to continue to experiment and develop.  Just as very little is known about how best to seed, cultivate and harvest the numerous varieties of hemp, the past few years have demonstrated that very little is known about how hemp demand might evolve. 

With its newly legal status, you might have expected research and development efforts to have better settled some of the many questions that swirl around the efficacy of CBD that since 2018 can be produced throughout the United States. What effects does CBD have on the human nervous system? How do those effects present themselves in people? At what dosage levels are effects perceived by users? Are there side effects? What are the overdose risks and at what levels? 

How does CBD derived from high-THC cannabis plants differ from CBD in low-THC cannabis, if at all? Are there truly “entourage” effects from the presence of CBD in cannabis consumed for its THC (psychotropic) effects? Are there entourage effects on CBD efficacy from a legally low presence of THC in CBD products? 

If CBD is proven to have certain effects, are they such that CBD should be regulated? If CBD is demonstrated, for example, to be a reliable soporific, should it be regulated in over-the-counter sales (subject to things like labelling and purity standards) or limited to prescriptions?  Many of the dosages in current consumer products may be too low reliably to have measurable effects on users, and higher but controlled dosing might lead to greater uptake of CBD and increased demand for industrial hemp. 

The industry and the public are far away from settling on answers to these questions about CBD. And this is just one of industrial hemp’s applications. The current low prices for CBD-hemp, as PanXchange’s recent benchmark report notes, creates some breathing room for exploring and developing hemp intended for other markets. 

On the supply side for industrial hemp, all that is known is that there remains a lot to learn after hemp production was outlawed for so long by the largest economy in the world.





John Lothian Newsletter

Today’s Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

Now Read This

Pin It on Pinterest

Share This Story