Our hemp team continues to make progress with the roll out of the trading platform for fiber and hurd. As many of you know, we are finalizing the trading terms such as the quality specifications required by commercial buyers (vs cannabinoids where we allowed the listing of any quality variation). The faster we can establish standard commercially viable terms, the faster this sector of the market can grow.
Our estimates show 2021 demand will require just 1,650 acres of CBD using Neisen’s 2021 $3.5 billion sales estimate.
As most of you know, the PanXchange team has worked very hard over the years to provide transparency and intelligence to markets that were previously completely opaque and inefficient. Hemp is not the first market we cover, but it is the most exciting with the most growth potential.
One of our competitors is quite frustrated with the market share that PanXchange has earned and has consequently turned to a federal lawsuit in an attempt to drain our resources. Specifically, they’re attempting to block us from using the term “hemp benchmarks” when there is no substitute for “hemp,” and the USPTO has declared “benchmark” as merely descriptive and not protected. Please see this link for details on the suit.
As we illustrated in last month’s year-end report, the cannabinoid market is grossly oversupplied. Not surprisingly, producers throughout the country continue to struggle with spot transactions and selling products outright that were not contracted for 2020. Processors continue to reiterate that the quality of the product varies widely with newer, inexperienced growers. Trading has been light this month, yet the bottom on biomass pricing continues to decline, consolidating around a low of $1/lb. This consolidation creates an imminent problem considering that processors are charging anywhere from $1-5 per pound for outright processing on biomass, far more than the product itself is worth. Nonetheless, due to product degradation, many producers were forced into processing agreements to avoid further degradation of unsold biomass.
On each Friday following the distribution of PanXchange: Hemp Benchmarks and Analysis, the Hemp team will be hosting an online webinar to discuss industry trends such as our regional pricing benchmarks, market commentary, supply and demand analysis, and other recent content. This webinar is intended to give our subscribers the opportunity to connect with the PanXchange team to ask questions and discuss topics in an open format. This is a new service exclusive to only PanXchange platform participants and data subscribers – at no additional cost.
This time last year, the PX team took every opportunity to tease me whenever I used the expression “the tail wagging the dog.” I was referring to the pie-in-the-sky forecasts for the US addressable market for CBD. Specifically, it disturbed me that these multi-billion dollar forecasts were based on retail shelf prices. It’s as illogical as quoting the US wheat market in terms of bags of flour at the supermarket. Estimating in this way grossly distorts the market fundamentals, especially considering that with regard to cannabinoids, a little bit of hemp goes a very long way.
Pricing information is collected via the PanXchange trading platform and surveys of thoroughly vetted market participants- growers, processors, trade houses and end users. No brokers, industry analysts or association representatives are eligible to participate. The data is then analyzed using our proprietary methodology and follows the International Organization of Securities Commissions (IOSCO) guidelines. Please reach out to the PanXchange hemp team by email at hemp@panxchange.com or by phone at (877) 917-9658 for any questions or comments.
Pricing information is collected via the PanXchange trading platform and surveys of thoroughly vetted market participants- growers, processors, trade houses and end users. No brokers, industry analysts or association representatives are eligible to participate. The data is then analyzed using our proprietary methodology and follows the International Organization of Securities Commissions (IOSCO) guidelines. Please reach out to the PanXchange hemp team by email at hemp@panxchange.com or by phone at (877) 917-9658 for any questions or comments.
On each Friday following the distribution of PanXchange: Hemp Benchmarks and Analysis, the Hemp team will be hosting an online webinar to discuss industry trends such as our regional pricing benchmarks, market commentary, supply and demand analysis, and other recent content. This webinar is intended to give our subscribers the opportunity to connect with the PanXchange team to ask questions and discuss topics in an open format. This is a service exclusive to only PanXchange platform participants and data subscribers – at no additional cost.
Methodology:
Pricing information is collected via the PanXchange trading platform and surveys of thoroughly vetted market participants- growers, processors, trade houses and end users. No brokers, industry analysts or association representatives are eligible to participate. The data is then analyzed using our proprietary methodology and follows the International Organization of Securities Commissions (IOSCO) guidelines. Please reach out to the PanXchange hemp team by email at hemp@panxchange.com or by phone at (877) 917-9658 for any questions or comments.