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  • CBD Demand Not As High As Expected?

While CBD products have proliferated the mainstream and have found their way onto many a kitchen table, nightstand and bathroom counter, it turns out that the actual economic demand for the hemp derivative may be lower than originally anticipated. According to Julie Lerner, CEO of PanXchange, before the harvest came in July of 2019, hemp prices reached over $40 a pound. Today, it’s trading at under $10 a pound after supply was quadrupled from 2018 to 2019.


“Every way you slice it, the physical demand for the CBD market is much, much smaller” than its supply, Lerner said. “I’m a little surprised that retail prices have not started to come down yet. There’s so much competition.” She described the hemp market as “rife with desperate sellers and opportunist buyers” in her industry analysis in December of 2019. 


“We are hearing that despite the losses people have had this year, they’re still going to increase plantings, and you have Texas, Florida, Wyoming and a bunch of late-comers that are just starting this crop year,” she said.


Even though Lerner believes that eventually the industrial hemp market will outperform the CBD market, she doesn’t predict it’ll happen until there is a further drop in prices.


“It’s a little bit chicken-and-egg,” she said. “There won’t be demand for it until prices drop, and people won’t be planting for the industrial fiber market until there’s huge demand for it, so we’ve got to get over that hump first.”


Moreover, it’s not just the CBD market seeing a drop in demand. Prices for cannabis have also dropped in most US states. According to an analysis from LeafLink, a wholesale cannabis marketplace, pricing fell in every state in which cannabis is legal except for Washington and Oregon. It was also reported that prices dropped in all marijuana categories except for ingestibles and edibles.


North of the US, in Canada, the opposite trend is taking place. According to Bloomberg: “A gram of black-market pot was C$4.57 cheaper on average than a gram of legal pot in the fourth quarter, according to crowd-sourced data gathered by Canada’s national statistics agency. That’s up from a gap of C$4.47 in the third quarter and C$3.25 in the final quarter of 2018, when the country first legalized recreational pot.”


This, though, has stirred up its own dilemmas in the nation. Particularly, a growing price gap in black market and legal market cannabis products makes it difficult for legal marijuana companies and dispensaries to compete with the black market’s cheaper offerings.

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CBD Demand Not As High As Expected?
provisional_air 2 years ago
Yamos 2 years ago
To this day I don't get CBD. I've eaten it, smoked it, vaped it, and honestly, I don't get it. If it were weed, I'd be pissed off at my dealer. I'e been toking up for 42 years and to me CBD, is complete bull shit.