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14. April 2020
Market Analysis Market Data Market Watch News

March 2020 – Market Analysis & Price Benchmarks

Key Market Activity – March 2020

  • Wholesale biomass prices remained relatively steady during the month of March, with only a small depreciation in the Cannyx Markets CBD Biomass Benchmark price.
  • Short-term data suggests that we might have seen a bottoming of the price depreciation, which has resulted in an 80% reduction in biomass prices, over a 12-month period.
  • Market conditions for wholesale refined cannabinoid products mirrored the dynamics of the biomass market, with prices remaining level across most of the assessed product classes.
  • The Cannyx Markets CBD Isolate Benchmark remained virtually unchanged, during the period, with an assessed price of £973/kilo for March, fractionally down from £994/kilo in February.
  • Price stabilisation in February and March was beginning to show early signs that the market for refined cannabinoid products had begun to settle on longer-term supply-demand curves.
  • Since the start of 2020 assessed prices for refined CBG isolate have fallen by 52%.
  • As a result of the COVID-19 outbreak, and the repercussions it continues to have on global supply chains, commercial activity and consumer demand, the global cannabinoid market has moved into a new period of potential volatility, which will have major impacts on market dynamics through April, and the coming months.
  • Also in this analysis, regulatory announcements made during March, market sector updates, and recently announced production innovations.


March 2020 Price Benchmarks

Wholesale biomass

Wholesale biomass prices remained relatively steady during the month of March, with only a small depreciation in the assessed price from £0.55 (£ / %CBD/ pound) to £0.51. This follows the slight rebound in prices recorded during February, where we saw biomass up to £0.55, from a 12-month low of £0.42 in January 2020.

The short term data suggests that we might have seen a bottoming of the price depreciation, which has resulted in an 80% reduction in biomass prices, over a 12-month period.

Global markets have seen significant over-supply of biomass since the middle of last year, and until recently farmers and wholesalers had been holding back supply, in the hope of seeing the month-on-month downward price trends start to reverse. March looked like we were starting to enter a period of short-term stabilisation in the market as existing biomass stockpiles reduced and supply gradually closed the gap on demand.

However, this has all changed as a result of the COVID-19 outbreak and the repercussions it continues to have on global supply chains, commercial activity and consumer demands. The global cannabinoid market has moved into a new period of potential volatility which will have major impacts on market dynamics through April and the coming months.

Across the full cannabinoid market vertical we saw liquidity dissipate towards the end of March, as a result of businesses looking to protect commercial interests and prepare for the financial impact of the outbreak. As we go into April total transaction volumes were significantly reduced across all product classes.

The current market conditions likely spell a prolonged period of uncertainty. As it stands, data suggests that transactions that are taking place, going into April, are doing so at prices similar to the March assessed totals.

Refined Cannabinoid Products Pricing

Market conditions for wholesale refined cannabinoid products mirrored the dynamics of the biomass market, with prices remaining level across most of the assessed product classes.

Our Cannyx Markets CBD Isolate Benchmark remained virtually unchanged, during the period, with an assessed price of £973/kilo for March, fractionally down from £994/kilo in February. Transaction volume remained steady for most of March, although markets experienced some drop-off in activity towards the end of the month, as a result of global COVID-19 ramifications.

CBD Isolate prices have fallen some 80% over the last 12-months, as demand has failed to maintain pace with supply. New production techniques and processing facilities have all further exacerbated this problem, despite the continued growth in consumer markets year-on-year. The level of price depreciation has reduced month-on-month since the start of 2020 and it is hoped that we may be starting to see some price stabilisation going forward.

The Cannyx Markets CBD Distillate Benchmark was the only refined product class to record any significant movement in price during March. The assessed price fell by nearly 15% to a 12-month low of £3,424/kilo, down from £3,920 in February. Assessed prices of CBD Distillate have fallen some 24% since the start of the year.

CBD Water Soluble Isolate and CBD Water Soluble Broad Spectrum both remained level in terms of the assessed prices for March, at £1,199/kilo and £1,931/kilo respectively. Both these product classes have seen relative stability in price since the start of 2020.

Price stabilisation in February and March was beginning to show early signs that the market for refined cannabinoid products had begun to settle on longer term supply-demand curves as these dynamics had become more closely matched. However, the impact of COVID-19 is likely to cause short-term volatility in terms of prices and volumes of transactions over the coming months.

Minor Cannabinoid Pricing

Since the start of the year assessed prices for refined CBG isolate have fallen by nearly 50%, from a high of £16,260/kilo in January to £8,535/kilo in March. This is a significant drop over a short period of time, which draws into question the potential market size for minor-cannabinoid’s like CBG. It would seem that the high prices experienced earlier in the year were representative of perceived demand, following industry media coverage that suggested the CBG market could be the next major opportunity for the wider cannabinoid sector.

There is no indication to suggest that this might be wrong, however, there are a relatively high number of wholesale sources of CBG and with the market for this ingredient in such infancy, supply is currently far outweighing demand.

Following the wider price depreciations across all raw and refined material groups over the past 12-months, these price drops are not unexpected. When CBG was a niche product, producers could easily command higher prices, but as the number of market participants offering this product type increases then we are beginning to see prices fall in-line with wider market sentiment, albeit at a higher premium.

In fact, ultimately if consumers fail to see a significant difference between CBG and CBD products then longer term consumer demand is likely to remain low.

Of particular note, in this class, was the announcement, in March, by Agritek Holdings (AGTK), that the Company plans to focus on the cultivation and extraction of highly enriched CBG hemp, based on a new medical study that CBG material may have antibiotic potential to fight viral disease in humans. This follows research by McMaster University where researchers found that cannabigerol (CBG) is not only antibacterial but also effective in mice against a resilient family of bacteria known as methicillin-resistant Staphylococcus aureus (MRSA).

Further work is currently underway to analyse the findings, but it is a positive sign that CBG may have an extremely useful medical application that would open up a significant market opportunity for this product going forward.

Farmers and refiners concentrating on CBG will need to adjust expectation to reflect the lower CBG prices and the current trends, while looking closely at the potential market opportunities that may come about from new research.

COVID-19 Impact on Cannabinoid Markets

Despite some logistical problems for producers and certain supply-chain bottlenecks that have come about as a result of closed borders, and restricted transport options, manufacturers of both medical and consumer CBD products are predominantly still operating facilities. As we go into April we may begin to see a greater impact on processing facilities, as a result of global lock-down measures.

In February, US & European producers had already seen delays in receiving certain machinery and supplies as a result of the lock-down in China, and it is likely that this will continue across all regions, as the Coronavirus outbreak continues.

Data suggests that demand across medicinal markets is likely to remain relatively unaffected, at present. Research by Prohibition Partners found that medicinal users are the most likely group to maintain current levels of consumption. As with other pharmaceutical products, consumers will prioritise these purchases over and above other products and dosage regimens will dictate consistent demand.

Prescribing clinics are also adapting to the current situation by offering tele-consultations and appointments, along with prescription delivery services, which should mean that these user groups remain relatively stable.

Social distancing, and isolation, is resulting in supply chain adaptation to ensure that people can still access products. For example, UK-based medical cannabis group LYPHE Group, has agreed emergency measures with the UK’s Home Office to import sublingual cannabis medications for the first time.

As part of LYPHE Group’s COVID-19 emergency planning, an agreement has been made with the Home Office and the Office of Medicinal Cannabis in the Netherlands to allow for the first time ever the export of sublingual medical cannabis oil tinctures into the UK.

The change of policy is a temporary measure to enable patients that have been using the oils made from Dutch based manufacturer Bedrocan’s product, to continue to receive their medicine. This necessary move has been as a consequence of the shutting of borders and cancellation of transport links. Up until now LYPHE Group Chief Pharmacist, Chris Ashton, had been making trips to the Netherlands in order to fulfil prescriptions for patients based on oil that has not been permitted to be exported from The Hague.

In consumer markets, demand appears to have remained relatively stable during March, particularly for online purchases. Some retailers are seeing significant growth in custom, as consumers stockpile products and use time at home to explore the CBD retail market. Elsewhere, stockists with physical locations, other than pharmacies, have closed in many countries and this could have an impact on commercial purchase volumes as we go through April.

Restricted movement means that many consumers are switching to online purchases and data seems to suggest that medical and health & wellness products remain a priority among rapidly changing consumer behaviours.

Alphagreen, Europe’s largest consumer marketplace for certified cannabis (CBD, cannabidiol) products, has reported a surge in consumer demand for health and wellbeing products, which has seen a four-fold rise in visitors to, during March, and a 30% increase in sales.

As people consider new ways and means to strengthen their immune systems, in response to the COVID-19 pandemic, CDB products are proving popular across Europe.

Some sectors, of the CBD industry, are likely to see a reduction in short-term demand, particularly for products aimed at the sports & fitness markets; however, other sectors like skin-care and wellness markets could see increased activity, as consumers prioritise health purchases over other items.

Changing Consumer Behaviour

During March eCommerce marketing platform Yotpo, released its Consumers & Commerce 2020 Coronavirus Trends Report, showcasing findings from a global survey highlighting changing online consumer behaviour.

Among the many emerging trends, that are going hand-in-hand with this unprecedented global event, these are some of the main changes in consumer behaviour that marketers for CBD brands should be aware of:

  • Shopping behaviour is beginning to evolve, with consumers more responsive to marketing messages, including email, SMS marketing, social, and more.
  • Consumers prioritise buying food first and foremost, but also products that promote health and wellness, including supplements, superfoods, and items like thermometers and medication.
  • If products are out of stock in stores, consumers will consider less familiar brands.

Direct to Consumer (D2C) brands and retailers have an opportunity to grow consumer engagement during this time, and the data suggests that those brands that are able to support existing, or build new, loyal customer bases stand to benefit in the longer-term.

Brands are also innovating in terms of delivery and customer engagement and ultimately these endeavours are likely to establish more robust brands in the future.

The recovery time for any loss in consumer markets is also likely to be considerably less than other industries.

Interim Prospects

The International Monetary Fund (IMF), have predicted that many global regions will officially fall into recession at the end of the second quarter of 2020. There is already strong indication of this from Q1 economic data. Unemployment has hit record highs in the United States, direct result of the virus, and many countries are seeing significant proportions of their workforce out of work. The length of the current COVID-19 outbreak will ultimately determine longer term impacts on economic climates. Current data suggests that global economies will be feeling the impact of the outbreak potentially for years to come. The Organisation for Economic Co-operation (OECD) has already confirmed that the economic shock is bigger than the 2018 financial crisis.

The effect on businesses operating in the Hemp & CBD sectors has already been felt, despite demand remaining relatively stable at present. Staff and personnel availability, logistical problems and supply chain issues are all factors that businesses throughout the cannabinoid supply chain are experiencing. It is realistic to expect that we may see additional issues in the short-term, particularly with investment markets and access to growth funding currently stagnating.

Regulatory Updates

In the United States, the FDA released an update, during March, outlining concerns with the overall safety of CBD, and stating that the rapid pace of development of the consumer sector will necessitate more cohesive regulations in the future.

The FDA’s update highlights the current trajectory for the CBD industry, in the United States. We can expect to see greater scrutiny in coming months and ultimately additional regulatory intervention, which will result in significant hurdles to be cleared when it comes to getting additional FDA-approved drugs on store shelves in the near term. Overall these are positive steps for the industry as they ensure that any products that are available, in the future, will have gone through a rigorous approval process, which ultimately safeguards consumers.

From a R&D, testing and production perspective the cost implications of greater regulation, will be significant, and this is likely to become a barrier-to-entry for some manufacturers. The rewards for those manufacturers that do go through these processes, however, will be significant. When you take a company like GW pharmaceuticals, there market share is sizeable and growing. As regulation becomes more complex, any future potential competitors are going to face a number of financial and efficacy hurdles that mean only the strongest will survive.  In the medium term this means we will continue to see the market dominated by a small number of major players.

In contrast, dietary supplements, animal drugs, and feed applications show promising potential for the industry moving forward subject to future industry regulations.

Key Announcements in March

US FDA Updates on CBD Initiatives

The U.S Food and Drug Administration (FDA) issued a statement that clarifies the work that the agency is undertaking in relation to cannabidiol (CBD) products particularly in relation to protecting public health and providing market clarity. The comments came from the Commissioner of Food and Drugs, Stephen M. Hahn M.D., who in the statement sets out the FDA’s current agenda in relation to CBD.

Over the past year, the U.S. Food and Drug Administration has embarked on a comprehensive evaluation of cannabidiol (CBD) products, with a focus on educating the public about the risks and unknowns of these products, gathering the science needed to better understand both these safety concerns and potential benefits to inform our regulatory approach, as well as taking steps when necessary to address products that violate the law in ways that raise a variety of public health concerns.

The update references the agency’s current CBD initiatives, including several new steps in areas of education, research and enforcement with the ultimate goal of continuing to protect the public health and working to provide market clarity.

Read more

UK Association for the Cannabinoid Industry Launches New CBD Safety Certification Initiative

The Association for the Cannabinoid Industry (The ACI) has outlined new plans for The ACI Safety Certification programme. Launched one year before the FSA’s new safety regulations come into force, which excludes all CBD food products from sale in the UK without a validated Novel Foods application dossier.

The ACI Certification is a key part of The ACI’s vision for a sustainable future for the UK CBD sector and further emboldens The ACI’s mission to nurture an industry that puts public safety first.

Read more

Medical & Research

KALY to Evaluate Patented CBD Formulation for Potential Coronavirus Treatment

US-based, Kali Extracts (KALY) has confirmed efforts to evaluate its proprietary CBD extract formulation as a treatment for coronavirus symptoms.

KALY’s proprietary CBD formulation has been developed for the treatment of symptoms associated with Chronic Obstructive Pulmonary Disease (COPD) and other similar respiratory conditionsThe formulation for the treatment of symptoms associated with COPD and other similar respiratory conditions has been derived from the company’s U.S. Patented Cannabis Extraction Process.

As detailed in a recently published research study (Journal of Cannabis Research) the KALY U.S. Patented CBD extract provides significant anti-inflammatory responses in vitro.

Read more

GW Pharmaceuticals Announces Publication of EPIDIOLEX Phase 3 Trial Results

GW Pharmaceuticals announced, during the period, that JAMA Neurology has published results from the second positive Phase 3 trial (GWPCARE2) of EPIDIOLEX® (cannabidiol) oral solution CV in children with seizures associated with Dravet syndrome.

The article has been published online and will be included in the May 2020 print issue of the journal. EPIDIOLEX, a pharmaceutical formulation of highly purified cannabidiol (CBD), is the first prescription, plant-derived cannabis-based medicine approved by the U.S. Food and Drug Administration (FDA) for the treatment of seizures associated with Lennox-Gastaut syndrome (LGS) or Dravet syndrome in patients two years of age or older.

Read more

FDA Grants Fast Track Designation for CBD Treatment of Systemic Sclerosis

Emerald Health Pharmaceuticals Inc. (EHP), a clinical-stage company developing medicines based on cannabinoid science, has been granted Fast Track designation from the US Food and Drug Administration (FDA) for its lead clinical-stage product candidate, EHP-101, for the treatment of systemic sclerosis (SSc), a severe form of scleroderma.

EHP is currently initiating a Phase 2 clinical study for systemic sclerosis in Australia, New Zealand and the United States with EHP-101, an oral formulation of a patented, synthetic new chemical entity derived from cannabidiol (CDB).  EHP previously received Orphan Drug designation in the US and EU for EHP-101 in the treatment of systemic sclerosis.

Read more

Medical Cannabis Treatment can have Positive Impacts on Symptoms of Fibromyalgia

New study finds that medical cannabis treatment (MCT) can have positive impacts on symptoms of some patients with fibromyalgia (FM).

The study, which was recently published in the journal Clinical and Experimental Rheumatology, demonstrated that cannabis can be used effectively as an addition to the stable standard analgesic treatment of fibromyalgia (FM) patients.

Fibromyalgia is a disorder that involves musculoskeletal pain along with sleep, memory, mood and fatigue issues. Symptoms vary from person to person and there is currently no known cure. Treatments like painkillers, talking therapies and exercise programmes are used in combination to ease symptoms.

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Consumer Products

AXIM® Biotechnologies Launches CBD-Based Gum Targeting Golfers

International healthcare manufacturer AXIM® Biotechnologies have announced that its nutraceutical division AXIM® Wellness has launched a brand new cannabinoid-based chewing gum product aimed at professional and amateur golfers.

The new Hole-In-One Gum is specially formulated to help golfers improve their athletic endurance. Each piece offers 30 mg of magnesium citrate to relieve fatigue and promote muscle growth, 25 mg each of ginseng and caffeine for an energy boost, 20 mg of sage extract to improve focus, 25 mg of wild green oat extract to enhance cognitive function and 25 mg of full-spectrum hemp oil containing 5 mg of cannabidiol (CBD).

Read the full article

Evielab Launches Innovative CBD Micropearl Technology

Los Angeles-based Evielab has launched and patented the industry’s first CBD/CBG solid sublingual pearl. Originally developed in France, Evie pearls measure just .15 inches and deliver 5 mg of the highest quality CBD and CBG.

The innovative patent-pending micropearl technology dissolves quickly under the tongue and is as discreet as a breath mint. Each pearl consists of purified CBD and CBG (cannabigerol) combined with natural terpenes and come in effect-based profiles that may provide energy for sports performance, pain relief, relaxation, sexual drive, sleep, immunity and brain focus. Evie pearls are all natural with no additives, sugar, GMOs, or THC.

Read the full article

New Standards Represent a Blueprint for the CBD Skin Care Industry

US skincare retailer Sephora recently announced a new set of standards that the company would be applying to its CBD products, in a bid to increase the trust and authenticity associated with the brands the retailer sells.

Sephora’s steps are an innovative move that represents a strong blueprint for other CBD retailers. By ensuring that the products they stock are reputable, traceable and accurately labelled, proactive retailers are in a position to future-proof their CBD lines against changing regulatory impact.

Read our Market Analysis


CBD Research Needs More Independent Study, says Scientists

Researchers have concluded that the CBD industry needs more ‘independent’ evaluation, following the release of analysis that suggests many studies that evaluate the use, therapeutic effects and characteristics of cannabidiol, or CBD, are produced by authors with conflicts of interest that tie them to the industry and potentially lead to bias.

The work which was published in the Annals of Internal Medicine, found that of 99 human CBD studies done since 2014, about 62 per cent had some conflict of interest, including industry funding, or a study author employed by a company that markets CBD products.

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Agritek to Focus on CBG Following New Research that Shows Antibiotic Potential

Agritek (AGTK) has announced that the Company will focus on the cultivation and extraction of highly enriched CBG hemp, based on a new medical study that CBG material may have antibiotic potential to fight viral disease in humans.

Recently, McMaster University researchers have identified an antibacterial compound made by cannabis plants that may serve as a lead for new drug development. An interdisciplinary team of McMaster researchers found that the chemical compound, or cannabinoid, called cannabigerol (CBG) is not only antibacterial but also effective in mice against a resilient family of bacteria known as methicillin-resistant Staphylococcus aureus (MRSA). CBG achieved this by targeting the cell membrane of the bacteria. These findings in the laboratory were supported when mice with an MRSA infection were given CBG. The findings were published in the journal American Chemical Society Infectious Diseases.

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Panaxia Granted First Permit to Export Cannabis Oil from the US to Israel

Panaxia, the largest manufacturer and distributor of pharmaceutical cannabis products in Israel, and its partner Ultra Health have announced the arrival in Israel of the first shipment of hemp extract, having been awarded a first-of-its-kind permit to export cannabis oil from the US to Israel.

This unique license was granted to the companies in light of their recent qualification to manufacture and distribute at their joint New Mexico (Bernalillo) facility, including hemp extracts of particularly low (<0.3%) THC concentrations. The companies have recently been licensed to manufacture products at the New Mexico facility and distribute them throughout the US.

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