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9. March 2020
Market Analysis Market Data News

February 2020 – Market Analysis & Price Benchmarks

Key Market Activity – February 2020

  • Wholesale price depreciation of hemp biomass began to stabilise through February
  • Overall volume of biomass transactions, for both US and Europe, declined during the period influencing the apparent assessed price rises
  • Downstream impacts of recent biomass oversupply are still weighing on refined cannabinoids
  • Cannyx Markets CBD Isolate Benchmark fell to an assessed price of £868/kilo, in February, from £1,378/kilo in January
  • Assessed prices for CBD Distillate fell during the period from £4,485/kilo to £3,920/kilo.
  • Assessed prices for CBD Water Soluble Isolate and CBD Water Soluble Broad Spectrum remained steady during February at £1,168/kilo, and £1,910/kilo respectively.
  • There were a number of significant announcements made in February related to research into the use of CBD products in a range of condition, including, Epilepsy, Pain relief, Symptoms of Menopause
  • Also in this analysis, regulatory announcements made during February, market demand updates, and recently announced production innovations


February 2020 Price Benchmarks

Wholesale biomass

Recent price depreciation of wholesale hemp biomass began to stabilise through February, with our assessed UK& European benchmark rebounding slightly to £0.55/ (£ / %CBD/ pound) from a low of £0.42/ (£ / %CBD/ pound) in January. Similar, price stabilisation has been evident in the US, signifying a period of levelling across the market.

Given the prolonged period of month-on-month price depreciation for wholesale hemp biomass, with global markets seeing a downward trend since early 2019, many will be hoping that this potentially signifies a bottoming for the market.

The overall volume of biomass transactions, for both US and Europe declined during the period likely influencing the apparent price rises. A significant number of producers are looking to hold back their surplus 2019 stock, in the hope that prices will further appreciate ahead of the 2020 growing season. This means that there is still an abundance of available raw material, in the marketplace.

Although small, the price increases come at a significant time for growers. Many farmers are currently assessing planting allocations for the coming year and for many this will be a good sign that things may be picking up again. However, all signs point to caution being a prudent stand point at this time, when it comes to predicting additional price rises in March and April. The market will be eagerly awaiting next month’s benchmarks to gain a real assessment of overall ongoing market sentiment.

Looking ahead, prices are likely to continue to experience volatility through 2020 as surplus supply left over from 2019’s harvest continues to enter the market. It is hoped that supply should more adequately match demand in 2020, however, with CBD headlines still highlighting the potential for consumer growth across refined products, farmers are likely to still be tempted to plant for 2020 in expectation of this continued rise in demand.

Even with a rising consumer market for refined cannabinoids, data still suggests that the level of biomass heading for refinement massively outweighs actual market needs.

Price increases of biomass also make other commercial uses for hemp, like construction, less appealing which again will influence demand going forward.

Refined Products

Downstream impacts of recent biomass oversupply are still weighing on refined cannabinoids. Our wholesale benchmark price assessments for February show further depreciation across a number of refined raw material categories.

CBD isolate fell to an assessed price of £868/kilo, in February, from £1,378/kilo in January. The spread between high-low reported prices also narrowed with the reported high of £1,100/kilo and the low of £700/kilo. This continues a 10-month period of month-on-month decreases.

Reported volumes of transactions remained steady for the period, suggesting that the price decreases are predominately being driven by over-supply of refined material within the market place.

It is hard to gauge how far this depreciation of CBD isolate may go. Stocks remain high and the surplus of biomass material continues to impact downstream production. Increased refinery capacity and new product formulations are all increasing supply to an already over-supplied industry, which is having a resulting impact on wholesale prices.

Assessed prices and volumes for March will be critical to providing future market direction.

Looking at other categories in our February Cannyx Markets’ CBD Benchmark most figures seem to reflect a similar situation. Assessed prices for CBD Distillate fell during the period from £4,485/kilo to £3,920/kilo. Assessed prices for CBD Water Soluble Isolate and CBD Water Soluble Broad Spectrum remained steady during February at £1,168/kilo (CBD Water Soluble Isolate) and £1,910/kilo respectively.


Minor Cannabinoid Pricing

Assessed prices of CBG Isolate fell significantly during the period from £16,260/kilo (in January) to £9,260 in February. Given that the market and product development interest in minor-cannabinoids like CBG remains relatively novel, price fluctuations in response to variations in demand are to be expected. Similarly, as with the other refined categories, the number of suppliers producing CBG has increased significantly since 2019.


2019 CBD Raw Material Price Trends  

2019 represented the most significant, and largest, hemp harvest globally, with perceived consumer demand and changing agricultural regulation in a number of countries, particularly the US, resulting in a raw material biomass supply that has far outweighed actual current market demand.

During February we released analysis of price trends for 2019 and you can view all the charts here.


Production Impact of Corona Virus

There are indications that the impact of the global spread of the corona virus will also be felt by CBD markets. Recent years have seen significant amounts of low grade CBD isolate available in Europe. With widespread disruption to industry, in China, supply chains are under pressure, which will likely result in a reduction in Chinese refined CBD exports, in the short term. The impact of this on future prices is hard to determine, but it may increase the number of buyers seeking refined products from European and North American sources, as we go through March and April.

More importantly refineries in North America and Europe are already reporting disruption and delays in relation to equipment, chemical and ingredient orders. With China representing the manufacturing source for many aspects of the hemp and CBD market, supply chain disruption is problematic. At the time of writing, peak infection levels, in China, seem to have been reached which will be positive news for producers awaiting delayed orders.


Regulatory Updates

UK’s FSA sets deadline for CBD businesses to provide more information about CBD products and their contents

In the UK the Food Standards Agency (FSA) has given the CBD industry a deadline of 31 March 2021 to submit valid novel food authorisation applications. After 31 March next year, only products which have submitted a valid application will be allowed to remain on the market. The authorisation process ensures novel foods meet legal standards, including on safety and content.

Local authorities enforce the novel food legislation. They have been advised that businesses should be able to sell their existing CBD products during this time provided they are not incorrectly labelled, are not unsafe to eat and do not contain substances that fall under drugs legislation. More information for businesses is available here.

The European Industrial Hemp Association (EIHA) is organizing a consortium of producers to support firms seeking approval. “We support the rationale behind FSA’s statement and look forward to our meetings early next month to discuss the EIHA consortium application in detail,” EIHA Managing Director Lorenza Romanese said. “EIHA’s members agreed last year to submit a joint consortium application that will include a range of CBD extracts to both the UK’s FSA and the European Food Standards Agency (EFSA).”

However, we are disappointed that the FSA does not appear to support EIHA’s position that for many centuries cannabinoid rich hemp foods and hemp extracts containing CBD have been extensively consumed across Europe and therefore low concentration CBD products should not be considered as ‘novel’ based on FSA’s own definition,” Romanese said.

Trump Requests Additional Funds to Regulate CBD and Hemp

In the US President Donald Trump issued a 2021 budget plan asking for an additional $5 million next fiscal year for the U.S. Food and Drug Administration to regulate cannabis and its derivatives, including CBD. The President also asked for more money to oversee hemp farmers.

The budget requests come shortly after legislation was introduced in the U.S. Congress to require federal food and agriculture regulators to treat hemp-derived CBD as a dietary supplement. That proposal came in response to the increasing popularity of the product and the FDA’s year-long delay in developing regulations.


Market Demand Data

Cannabidiol Nutraceuticals Market Worth $17.4 Billion by 2026

The global CBD nutraceuticals market is projected to reach USD 17.4 billion by 2026, according to a report, published in February, by Grand View Research, which forecasts a CAGR of 18.8% during the projected period.

The report outlines some of the driving forces behind the market growth including, the introduction of the 2018 Farm Bill that legalized hemp cultivation and hemp-derived products in U.S., rising consumer preference for plant-based ingredients in dietary supplements, and awareness regarding the health benefits of cannabidiol. The researchers also list the easy availability of alternative products as an obstruction to market growth.

According to the research CBD tinctures dominated the global Cannabidiol (CBD) nutraceuticals market in 2018, with a revenue share of 42.6%. Increasing acceptance of cannabidiol for health and wellness purposes coupled with high bioavailability of tinctures when administered sublingually are the major factors responsible for this large market share.

On the other hand, capsules and soft gels are anticipated to be the fastest-growing product type over the forecast period, as they are travel-friendly and convenient to carry in public places. Many consumers dislike the raw taste and texture of cannabidiol and so they are switching towards capsules and softgels.


Key Announcements in February

Medical & Research

Belgium Makes CBD Oil Available Without Prescription

Pharmacies in Belgium began offering CBD oil over the counter without the need for a prescription, in a move which will make CBD available to a much wider population.

Up until now, CBD oil was only available in pharmacies on prescription or in CBD shops or online, where the quality cannot always be guaranteed. The move has been welcomed by pharmacists in the country as well as companies, looking to manufacture CBD products for the Belgium market.

The move will allow people to access quality professional advice on the use of CBD oil from trained pharmacists, who will be able to advice on the possible use cases as well as ensure that the product is appropriate for those purchasing it.

Read the full article

New Study Supports the Potential for CBD Oil for Patients with Drug-Resistant Epilepsy

Medical Marijuana, Inc. (OTC: MJNA) announced completion of a clinical study conducted in Mexico, using its Real Scientific Hemp Oil-X™ cannabidiol (CBD) oil, that had been published in the EC Neurology (ECNE), an internationally peer-reviewed journal.  Results of the new study on the treatment of CBD (RSHO-X™) oil for drug-resistant epilepsy in children and adolescents showed promise after demonstrating good efficacy and tolerability.

The treatment yielded a positive effect on seizure reduction after 3 months. Most of the children 25/37 (67.5%) reported a reduction in seizure frequency; a 100% reduction in 1 (2.2%), more than 80% reduction in 11 (25%), 50% or more in 25 (67.5%) and less than 50% reduction was reported in 12 (27.2%) patients, respectively.

For many children, there are countless pharmaceutical drugs that either don’t work for them or produce a variety of harmful side effects,” said Dr. Carlos G. Aguirre-Velázquez, a globally recognized paediatric neurologist and lead researcher on the study. “We are optimistic that this study will be one of many that showcase the potential for hemp CBD oil to be safe and useful.

Read the full article

New Clinical Research to Assess the Use of CBD for Relief from Menopause Symptoms

UK-based Satipharm Ltd has initiated clinical research into the use of CBD for relief from menopause symptoms. Following the successful completion of its Phase II clinical trial demonstrating that Satipharm CBD capsules reduced seizures in children with treatment-resistant epilepsy by an average 73%, the company is now turning its attention to perimenopause and menopause.

Utilising Satipharm’s Advanced CBD capsules with Gelpell® delivery technology, manufactured under Good Manufacturing Practice (“GMP”), the aim of the clinical research is to demonstrate that Satipharm’s patented CBD formulation will provide significant relief from symptoms associated with these physiological changes.

Read the full article

Research Suggests CBD-like Molecule Could be Effective at Treating Chemotherapy Pain

Recently released research from the Lewis Katz School of Medicine suggests that a cannabidiol-like molecule may be effective at treating pain resulting from chemotherapy.

A research team led by Sara Jane Ward, a professor of pharmacology, found certain applications of KLS-13019, a molecule developed by KannaLife Sciences, Inc., a biopharmaceutical company, might reverse pain from chemotherapy-induced neuropathy, or CIPN.

“So far, studies have shown that KLS-13019 is effective in preventing and reversing pain resulting from CIPN, differentiating it from CBD,” Ward said. “But there are many more studies that need to be conducted with KLS-13019 to determine if it could be a potential drug candidate and whether the compound can be brought into human clinical trials,” she added.

Read the full article

First Over-The-Counter CBD Pain Relief Product Receives FDA Certification

Elixicure’s Over-The-Counter Drug Registration has been certified by the U.S. Food and Drug Administration (FDA) for its Elixicure CBD-Infused Pain Relief products following a successful year-long process, announced Elixicure Chief of Business Development Yaniv Kotler. This marks the very first, and currently only, Over-The-Counter (OTC) Topical drug with Cannabidiol (CBD) to be registered and certified to date.

Elixicure is an all-natural, non-addictive pain relief cream developed to help reduce inflammation, swelling, aches and pains. The product contains Cannabidiol (CBD) extract, one of the main active chemical compounds naturally found in the hemp plant and contributing to the beneficial medicinal qualities of hemp.

Elixicure is manufactured by Honest Globe, developers of luxury cosmetic, health and beauty products. The company’s products are made with naturally-derived ingredients, using certified industry-standard manufacturing processes.

Read the full article

Consumer Products

CBD Start-up WholyMe Raises £500,000 to Target Muscle Pain

London-based CBD start-up WholyMe has closed a £500,000 seed round amid plans to increase the range of its organic products which are formulated to help with muscle and joint health.

The round included investment from Financière Saint James, V1 Capital, Guibor and business angels. It also included Joyance Partners, a New York-based VC concentrating on the new science emerging around “health and happiness” which recently expanded to the U.K. and Europe.

The funding will be used to manufacture WholyMe’s first range of 100% organic supplements and topical for muscle and joint health, starting with a cannabis-based ointment slated to launch in spring 2020.

Read the full article

Calm Drinks Launches CBD-infused Cold Brew Coffee

Calm Drinks has released a new range of CBD-infused cold brew coffee, to respond to the growing demand of both CBD and cold brew in the UK.

The drinks, which are infused with 10mg of CBD per can, add to the company’s current line of CBD-infused coffee and chocolate drinks.

Featuring two new flavours, Americano and Café Latte, the range uses dairy-free alternatives ensuring that it’s suitable for vegans. Americano uses 100% Arabica Brazilian coffee beans and contains hints of vanilla and toffee, meanwhile, Café Latte contains gluten-free oat milk.

According to UK-based Calm Drinks, Cold Brew Coffee has seen a large growth in popularity over the past 18 months. Originally started in the United States, it has become more main stream in the UK.

Read the full article

Colgate’s Latest Acquisition Launches CBD Range

In another signal that CBD is now firmly on the agenda of major brands, Colgate-Palmolive’s latest acquisition, Hello products, has announced its first CBD containing oral health range.

Successfully acquired by Colgate-Palmolive on the 31st of January 2020, Hello quickly made a statement with the launch of a CBD oral-care range and its first go at lip care, CBD Vegan Lip Balm. Available exclusively through Ulta Beauty, the CBD products have the potential to score well with younger consumers interested in natural ingredients, eco-friendly packaging and, of course, cannabis-based innovations.

We see huge growth potential for hello,” says Lauri Kien Kotcher, friendly CEO of hello products.  “Our new, ground-breaking launches, along with the continued success with our retail partners has encouraged us to think big and accelerate the rapid growth of our personal care assortment, with several more exciting innovations to follow later this year.

Read the full article


New Water-soluble Formulation set to Improve CBD Coffee & Tea Products

IQ Labs launches water-soluble cannabidiol (CBD), the first of which can be mixed into hot beverages without breaking down.

US-based, private label manufacturer IQ Lab launched its CBD Water Soluble Micelle Nanotechnology in the UK at the Hemp and CBD Expo.

The firm’s proprietary micellar-nano technology produces a highly bioavailable CBD molecule that is less than 100 nanometres. The micellar technology helps overcome challenges of poor absorption as well as product stability, and allows for a homogenous CBD formulation that is easy to flavour.

According to IQ Labs, the micellar technology increases the absorption rate for CBD from 1-2% to 8-9%. The company also describes its product as the first CBD oil that can be incorporated into hot beverages with separation of water and fat molecules.

Read the full article

Significant Demand for Revolutionary Nanoemulsification System for Water-Soluble CBD Oil

Pressure BioSciences, Inc. announced, in February, that new orders for its Ultra Shear Technology™ (“UST™”)-based nanoemulsification systems for processing CBD Oil into stable, effectively water-soluble, nanoemulsions of oil in water, are likely to exceed the company’s initial build plans of 12 systems, totalling  $2.4 Million.

The announcement follows growing market demand for water soluble CBD solutions with high-bioavailability as manufacturers look for new form factors for effective CBD delivery.

Read our Market Analysis on the growing demand for nanoemulsions in the CBD industry here


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