D8 Market Stabilizes Prices for Bulk Hemp Cannabinoids

By PanXchange

A Ninth Circuit US Court of Appeals ruled May 19 that delta-8 THC products are federally legal according to the US Farm Bill definition of hemp. The argument said that “any part” and “all derivatives, extracts, cannabinoids” of the hemp plant that contains less than .3% delta-9 THC by weight is considered federally legal hemp. 

Many states are grappling with the regulation of hemp-derived synthetic cannabinoids, both for consumer safety concerns and – in recreational THC states like Colorado – after complaints from the marijuana industry. 

Consumer safety is a valid concern considering some synthetic cannabinoids taken off the market have tested differently than advertised and can contain harmful byproducts from production. 

Consumer safety alone would be met with much more appropriate regulation than limiting sales to dispensaries. Colorado’s retail marijuana revenues have been declining, and bulk THC prices have been dropping in almost every recreational state. The lessening impact of the pandemic is primarily to blame, but lower-cost hemp-derived cannabinoids like D8 are nevertheless seen as a threat to the industry. 

Marijuana companies have a reason to complain: They must endure a maze of regulations for their product to reach a similar customer, and THC purveyors are (rightfully) blocked from selling to children. The cannabis industry argues – and we agree – that there should be a level playing field for anyone able to put a safe product on the market.

However, even with the uncertain status in multiple states, demand for D8 is strong and D8 has been credited with sponging up all the excess inventory from last year. D8 demand appears to have stabilized the market for other bulk hemp cannabinoids.

Our research shows that online sales of CBD isolate (a raw material from which D8 is derived) do not seem perturbed, even in banned states. It appears that even some delta-9 markets are using CBD isolate for production. 

While PanXchange does not trade D8 or report D8 prices on our platform, D8 has been reportedly trading between $395/KG and $600/KG for bulk volumes. Processing yields are ranging between 50% and 70% per KG of CBD isolate, which equates back to $200/KG and $420/KG of isolate excluding margin. Overall, D8 prices suggest current CBD isolate prices are relatively fair valued, and D8 is the true leader of bulk market prices for hemp cannabinoids. 

D8 remains in a regulatory gray area, but consumer demand keeps the market active.