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CBD Isolate Prices Collapse
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Vol. 6, No 47 -- Fri., July 20, 2019 - Edited by Dr Lloyd Covens
Raise Your Hand for MJ/Hemp Banking --A few months ago Senate Banking chair Mike Crapo (R-Idaho) said there was little chance he would allow a hearing on a cannabis banking access bill.  But next Tue., July 23, Crapo will gavel in a hearing to review and hear from Sen. Jeff Merkley and Sen. Cory Gardner on their banking bill, companion to Rep. Ed Perlmutter's SAFE banking act.  Others slated to offer testimony are  Credit Union National Association (CUNA), Citywide Banks, prohibitionist group Smart Approaches to Marijuana and the Cannabis Trade Federation.  On June 25, another Senate committee, Agriculture, will hold a hearing on the implementation for hemp rules in the 2018 Farm Bill-- stream at:   https://www.agriculture.senate.gov/hearings/hemp-production-and-the-2018-farm-bill
Wholesale CBD Prices Head Lower; MJ Stable, Slightly Up
Hopes are high that thousands in profits will flow to the new American farmers rushing to put CBD/hemp plants in the ground-- possibly surpassing 280,000 acres or a four-fold 2019 growth.   Hype, hope and the unknown have driven farm interests to hope for seeing a per-acre payday from CBD processors surpassing $45,000--$55,000 (gross) per acre.  But wait-- a 60-day collapse of wholesale pricing for CBD isolate--in some markets a drop from $6000 per kilo to half that figure-- may begin to already put downward pressure on full-spectrum oils and CBD biomass. A 15% drop was confirmed by Hemp Benchmarks (see box below) for both crude and refined hemp oil, with a May-to-June isolate decline of 13.3%. 
       
" Extractors sell CBD isolate below market price to pay their bills, and the market price drops.  Now, extractors must sell more material for the same amount of profit. To drive more sales they drop the price, and the cycle repeats.  There is another consideration. The fear that any CBD extraction material left in inventory, loses value at harvest." is the analysis of Kush.com founder Michael Gordon of Seattle.   The analysis released last week claims a drop in CBD isolate of 30% through May, and Gordon says this doesn't reflect the expected higher production of CBD this fall.  Full-spectrum and broad-spectrum extracted CBD may have some short-term protection, given that they are both considered more valuable than powdered isolate.
        Julie Lerner, founder of hemp commodity firm PanXchange, feels it may be too early to make any conclusions from short-term isolated declines.  " Biomass is a cyclical market where we're now running into supply constraints or degradation of product from last year's harvest," notes Lerner. "We have even heard of some entities taking a "loss leader" approach, aiming for market share more than profit," said the experienced commodity watcher. " For the 2019 harvest, given permitted acres in biomass we should all be anticipating an increase in supply but with adverse weather conditions and inexperience in farming hemp, one can't really get to a confident estimate."
         From the field, Ukiah, OR hemp farmer David Sheridan posts on the American Hemp Growers Society,  "This is my third year growing hemp, and prices have dropped about 30 to 40% easy, every year. The way many people get started is throw a ton of money into their seeds, watering system, tractors, greenhouse or pay 4x for some one else to start their seeds. Then they don't get paid until December."   Another Oregon farmer, Sean Beeman, co-founder of Genesis Pharms, told the Eugene daily paper,   “Every grower I know or meet, both cannabis and hemp, are just too excited lately..  too many people who think they can use their ag experience to make money. The reality is, just because you can farm corn, doesn’t mean you can farm hemp,”  Beeman said.
       But on the marijuana growing side, there seems to be a "dry-July" for scarce wholesale quantities of  quality RMJ/MMJ supply, with Colorado wholesalers reporting un-heard of pricing topping $1900 per pound.   Similar higher prices are being reported in California, New York and Nevada. 

      One explanation for Colorado's ability not to overgrow came from Vicente Sederberg regulatory expert Jordan Wellington.  "  Colorado has a unique system designed to keep production levels reasonable constant with demand for cannabis in the state. Unlike many other states, Colorado does not have a cap on the number of licenses it issues and anyone can start a new cannabis business here provided they have local approval. However, we have developed a system designed to restrict speculative cultivation - meaning cultivation without knowing that the business can sell the cannabis once harvested. All businesses are slotted into cultivation tiers that cap their production and can then apply to the MED to move to a larger tier by proving that they are selling what they are currently cultivating." said Wellington.

        And Gordon's Kush.com worried forecast for hemp warns, "When the 2019 harvest hits, and the surplus of hemp biomass arrives, the cost of biomass could drop to as low as $3.50 / lb!  Put in perspective, that price is still twice the value of a tobacco crop per acre, and tobacco farmers are ready. If these assumptions are true, the new floor will be $2300 / kilo of CBD," says Gordon    But with the growing season in full swing, the real supply and demand tug-of-war which will determine real market pricing won't be clear until early December.  And by then, it will be time to start planning for the 2020 hemp CBD acreage planting goals.  

ABOVE:  Connecticut analysts Hemp Benchmarks reports a two month decline in CBD isolate pricing in their report profiling June buy/sell activity.  Data reflects the national demand for hemp flower(up over 9percent at $349 a pound) for "cigarette-like" offers, with various small amounts of CBD, and no THC.  Prices for feminized hemp CBD seed was reported at $24,491 per pound, about eight times higher than non-fem CBD seed ($361/pound).  Find their extensive free report at:
   https://www.hempbenchmarks.com/june-hemp-report.html
 CANNABIS NEWS BRIEFS...  
   Illinois-based Curaleaf will soon claim to be the world's largest cannabis concern with its massive acquisition of midwestern operator Grassroots,growing the new entity to 19 states and 245 grow, retail, lab and manufacturing licenses.  Based on future-lloking market cap, Curaleaf's press release claims it will become the largest global cannabis firm, surpassing Canadian giants Canopy Grow Corp. and Aurora.    GrassRoots has a major presence in large markets including Illinois, which became the 11th state to legalize RMJ and Pennsylvania, the fifth most populous state in the U.S.   Curaleaf paid $xxxMil in cash, and about --- in stock to GrassRoots.  With the acquisition, Curaleaf will also add new markets in Arkansas, Michigan, North Dakota, Oklahoma, and Vermont, and build on its existing businesses in Connecticut, Maryland, Nevada and Ohio.    One positive analyst take on the big acquisition can be read at http://www.aviseanalytics.com/curaleaf-holding-forging-the-largest-acquisition-in-u-s-cannabis-landscape/

       More than 4400 submissions have been delivered to the Food and Drug Administration with comments for "cannabis and CBD" in foods, and as a dietary supplement.  Thousands echoed recent Congressional comments, urging the FDA to set some interim rules to help clarify a national market where CBD food and drinks are widely available, even with the FDA caution that CBD has not been fully researched for safety and efficacy.  The 32-page analysis from the Hemp Roundtable is one of the most well-conceived arguments for CBD regulation.  Read it at   https://hempsupporter.com/wp-content/uploads/2019/07/2019.07.16-US-Hemp-Roundtable-FDA-Comments.pdf

The National Cannabis Industries Association (NCIA) is set to welcome more than 8000 attendees at the San Jose Convention Center.    Former Canopy Growth CEO Bruce Linton will be interviewed on his view of near and long-term prospects for the North American cannabis and hemp scene.  More than 32 panels will host 70-plus speakers on a wide range of MJ topics.  A full-day Hemp Biz Symposium pre-ceeds the full conference on Mon., July 22.  Visitors will be heartened to hear the first Senate Banking committee hearing on cannabis financial needs on the first day of the show.

California cannabis attorneys are looking forward to a state Bar Association rule which clears up lawyer interface with MJ clients.  The final rule is set to become effective in November, and would make clear that " A lawyer may ethically advise a client concerning compliance with California's cannabis laws and may assist the client in conduct permitted by those laws, despite the fact that the client's conduct may violate federal law. ..... However, a lawyer may not advise a client to violate federal law or provide advice or assistance in violating state or federal law in a way that avoids detection or prosecution of such violations."

More than 32 national CBD experts will speak at West420's 6th CBOutLook, slated for Aug 14-15 at the University of Denver.   https://hempevents.org/events/6th-cboutlook-conference/     As we attempt to improve the conference, and expand networking events, we ask our readers planning to go to not wait until the last two weeks to sign up.  Last minute sign-ups drive up the cost of delivering for delegate, and generally, makes it difficult to size the demand for lunches, USD data disks, AfterParty drinks and food, session handouts, fruit and CBD breaks, and the number expected to optional hemp farm tours.   Help us put on a first-class event.  Deciding at the last minute just hurts our West420 effort.  Find the low $395 rate at Eventbrite,

https://www.eventbrite.com/e/6th-cboutlook-conference-du-1090-tickets-60801504938
 
6th CBOutLook -University of Denver- Topic Overview     
Watch our Conference video at:  https://www.youtube.com/watch?reload=9&v=H4BOZN-BNkk&feature=youtu.be
Wednesday, August 14th
12:15 Session Kickoff -- Cannabinoids and the Endo-Receptor System
Dietary, Medicine or Botanicals- Why Definitions Matter
Session 3:  CBD Product Innovation and Consumer BioAvailabilty
Session 4:  Half-Time Report-- Top 20 States Profiled for Planted Acres
with regional Biomass Processing Finished Goods from
COLORADO - KENTUCKY- OREGON- NEW YORK-TENNESSEE
NEVADA- NORTH CAROLINA- MONTANA-VERMONT- MINNESOTA
4:30pm Data-Statz Lead CBD Research -- University Lab Studies

Thursday, August 15th
8:30 Top CBD Sellers -  A Universe of Products-:  Pets, Skin Beauty, Pain Cremes
and Human Ingestibles -- Moderator: Larisa Bolivar, Bolivar Hemp
9:30:   The Route to Banking and Financial Access - Sundie Seefried Partners Credit Union- SafeHarbor Banking Systems
10:30- Bill Richmond, Agricultural Marketing Service, US Dept of Ag
11:15 - Assessing State Hemp Plans and 2019 Farming UpDate

12:15-- Lunch Served with Executive Interview Segments
CEO/Founders from: GenCanna, Functional Remedies and HEXO (Molson/Coors)
2pm: Perfect Products-- FDA Testing, Labeling and Safe Sourcing
US Hemp Authority - Hoban Law Group – Robison Law
3:15 Pathways to CBD Access:  Pick Your Lane - Socati Corp. GW BioSciences
4:15 The New Math for Hemp Investors:  $1Billion In =$3Bil. Market Value Out
5:15 CBD Innovation: Brands, SKU and IP -- Top CBD Market Leaders
CBoutLook AfterParty --7:30 Awards - Fun, Food DJ Dancing 8- 11pm
register at bit.ly/2Jtvv3N
West420 NewsWeekly is targeted to adults 21-plus and is not a solicitation for any cannabis product or derivative. Please share with your colleagues. Serving the cannabis professional since 2014, we appreciate you comments via email to " DrLLoyd@CBOutlook.com or for back issues, please Visit This Link

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