FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
59,516,610Confirmed
1,402,042Deaths
41,157,776Recovered
Fetching Location Data…
Advertisement
Advertisement
David Becker
Flour hemp in spoon with grain and oil on board

The new normal that we’re all adjusting to as a result of the global pandemic has implications for a wide range of industries, hemp included.  Hemp prices in 2020 were not projected to see much upward movement without a major regulatory change by the FDA that would drive demand by larger industry.

Overall volume is down, with very little biomass trading hands.  Extractors have deep inventories of extracts, too deep, and many facilities are idle, or pivoting to THC remediation.  Tolling fees are very competitive in markets like Colorado, where extraction capacity is highest. T-free distillate – and distillate in general – is moving more than anything, and this in turn drives some demand for crude.

Certified organic products are increasing in volume, for biomass, flower, crude and distillates.  This and cGMP practices can have an impact on hemp pricing and CBD prices, with the market bifurcating over processes using premium inputs and manufacturing practices and those that are not and have less sophisticated quality assurance practices.

We’ll be reporting these as separate price categories now.  Because inventories are so deep, and operators are desperate, the lines are sometimes blurred between the premium and standard market pricing, but these markets evolve quickly, and product pricing premiums are becoming more evident.

The hemp industry was wobbly before COVID-19 hit, but this new crisis adds further downward pricing pressure.  The larger CBD companies with national distribution have had lackluster sales for their first foray into mainstream national retailers.  Some report earnings off by a third, and 2020 forecasts are down universally.

Nevertheless, some retailers are holding their own with locally marketed brands that allow for personal interactions with consumers, curious about CBD.  Hemp prices after coronavirus will see the same forces at play throughout the economy, with demand down as a result of many aspects of commerce coming to a screeching halt.

The bright spot one can look to with hemp prices after COVID-19 and organic hemp prices is the injection of money into the economy.  Hemp businesses could see a major assist following dramatic adjustments in monetary policy and a massive $2 trillion stimulus package that will do everything from place dollars directly into moderate earners pockets, offer incentives for businesses to maintain workers on their payrolls, and provide financial aid that is earmarked specifically for agriculture, though it is unclear to what extent hemp will benefit through this channel.  Local food systems were specifically listed in the bill’s language, so this very well could help buoy the hempseed grain segment.

Overall biomass pricing could see a strengthening in Q3 for properly stored product with a current COA reporting a desirable cannabinoid profile.  Hemp derivatives like Crude CBD extract, full spectrum, and T-free distillates may see some increased sales volume which may increase extraction activity in some areas.  Markets are diverse, and some companies are doing ok with good business and marketing relationships, reliable export markets, or direct to consumer sales.

At this point, everyone is impacted to some extent.  The hemp industry will need to take advantage of any government assistance to ride out this storm, which at this point, appears to still be gathering strength.

Advertisement
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US