Source | Cannyx Markets
As we begin 2021, we continue to see relatively stable CBD biomass prices in January, continuing the trend seen towards the end of 2020. Our assessed Biomass Price Benchmark rose slightly in January to $1.70/%CBD /pound (or $3.74/%CBD/kilo), with transactions taking place between a low of $1/%CBD/pound and a high of $2.80/%CBD/pound.
Overall transaction volume remained stable with buyers looking to secure fresh stock from the 2020 harvest season. Prices have remained relatively stable since November, when we saw a substantial increase in overall biomass transactions and prices.
Reports suggest that stocks from the 2020 harvest are well down on the soaring levels we experienced in 2019. Many growers, around the world, exited the industry during 2020 as a result of their experiences in 2019, and it would seem that the harvest yields have reflected that reduction.
As we begin 2021, we are witnessing a more balanced market for biomass transactions. This is welcome news for the industry following the general downward trend driven by oversupply that was experienced throughout much of 2020.
We expect this stability to remain as we go through February, and as a result our forecasted Biomass Price Benchmark price for February is $1.7/%CBD /pound (or $3.74/%CBD/kilo).
A recent report from Hemp Benchmarks which combines final harvest assessments from multiple state agriculture departments and cultivators for the 2020 growing season, concluded that the total acreage licensed for hemp in the U.S. dropped by 30 percent from 590,000 acres licensed to 400,000 in 2020.
This is in-line with our own Cannyx Markets predictions made last year.
Based on the data, it is estimated that 85 per cent of U.S. acreage was used for CBD and other cannabinoid production, which amounts to between 119,000 and 136,000 acres devoted to CBD and other cannabinoid hemp, the report states.
“Hemp Benchmarks’ preliminary estimate of CBD and other cannabinoid biomass production in 2020 is 50 million to 60 million pounds,” Hemp Benchmarks said. “We expect that the amount of biomass harvested successfully last year was higher, but that some will go to waste due to low CBD potency and storage issues. Our estimate of 2020 CBD/cannabinoid biomass production is just over half our estimate for 2019, which was 90 million to 112 million pounds.”
Our CBD Isolate Price Benchmark also remained stable with no movement in the month-to-month assessed price. The assessed price for January was unchanged at $1,100/kilo.
This is the same as the assessed price in December. November had seen a slight rise in the price of CBD isolate to $1,200 which was driven by a rise in demand, however, not considering that slight gain, the price trend for CBD isolate has remained relatively flat since July of 2020.
Transactions during January were up slightly on previous months.
Overall, prices of CBD isolate are down by 42% year-on-year from January 2020 to January 2021.
Despite the price depreciations we saw in early 2020, over the past 6-months we have witnessed CBD isolate prices stabilise, with market conditions dictating a price of just above the $1,000/kilo range for the refined raw product.
Our assessed price analyses global price changes and as a result we often see regional differences based on local supply and demand fluctuations.
Prices for CBD isolate products appear to have remained higher in Europe when compared with the United States, where we have seen prices drop below our assessed threshold. In fact, in December Kush.com reported average prices for CBD isolate of around $700/kilo, which suggests that the oversupply conditions of 2020 had more of an impact in the U.S. when compared with Europe.
Our forecasted CBD Isolate Price Benchmark price for February is $1,100/kilo.
January was also a month of relative stability across our other refined material price benchmarks:
The Cannyx Markets CBD Distillate Benchmark rose slightly during January to an assessed price of $3,000/kilo. This was up 3% on December’s assessed price of $2,900. Transactions took place between a low of $2,400/kilo and a high of $4,200/kilo. This reverses 6-months of price depreciations while also suggesting that this product class may have found a more stable market price.
Reports suggest that the slight increase in prices was a result of an increase in consumer demand for distillate-based products. This was reflected in a slightly higher number of observed transactions.
Prices for CBD Distillate are down by 50%, year-on-year, from January 2020 to January 2021.
Despite the slight uptick in price, we expect CBD Distillate prices to remain relatively steady as we go through early 2021, in line with other refined product classes.
Our forecasted Cannyx Markets CBD Distillate Benchmark price for February is $3,000/kilo.
Our CBD Water Soluble Isolate Benchmark also rose slightly in January, with assessed prices increasing 5% in January to $2,300/kilo, up from $2,200/kilo in December. Observed transactions occurred between a low of $1,850/kilo and a high of $2,600.
Prices for CBD Water Soluble Isolate are up by 50%, year-on-year, from January 2020 to January 2021.
Water soluble products have seen a significant increase in demand over the past 12-months because of changing consumer trends and increases in product ranges that require these types of raw material. As a result, we are now seeing signs of a longer-term shift to this becoming a more sought-after CBD raw material.
2020 saw a wave on new CBD-infused product launches that require water soluble components in order to provide an improved consumer experience. As CBD consumers become more mainstream the need for brands to provide formulations more suited to those customers is increasing. As a result water soluble products are likely to continue to be in demand throughout 2021.
Our forecasted CBD Water Soluble Isolate Benchmark price for January is $2,300/kilo.
Our CBD Water Soluble Broad Spectrum Benchmark also increased slightly by 2% during January to an assessed price of $2,800/kilo, up from £2,750/kilo in December. Prices for CBD Water Soluble Broad Spectrum have risen steadily over the past 6 months and look like they may be tracking a similar trajectory to that of our CBD Water Soluble Isolate Benchmark.
Prices for CBD Water Soluble Broad Spectrum are up by 12%, year-on-year, from January 2020 to January 2021.
Our forecasted CBD Water Soluble Broad Spectrum Benchmark price for January is $2,800/kilo.
Our CBG Isolate Benchmark continued to fall in January. Assessed prices fell 7% to $6,000/kilo. This follows a similar price depreciation of 8% during December.
Overall CBG Isolate prices are down by 78% year-on-year, from January 2020 to January 2021. In a trend that has seen greater availability of supply weigh heavily on prices.
Despite many manufacturers adding CBG-based products to their product ranges, it has not yet managed to capture the wider consumer interest. As demand for CBD-based products continues to grow there is no indication yet that consumers see sufficient differentiation between CBD and CBG.
This could still be reflective of the immaturity of the overall market and as more consumers try CBD products then the demand for nuanced products will become greater. This is probably still a way off and it may only be later in 2021, or 2022, that we start to see CBG really begin to take a share of the market.
A 2020 survey of US farmers suggested that 14.5% of planted hemp was destined for CBG refinement, which means that there should be ample supply of CBG going through 2021 which could continue to push refined prices lower.
Our forecasted CBG Isolate Benchmark price for February is $6000/kilo.
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