May 2020 Hemp Spot Price Index Report

by Hemp Benchmarks

Prices for the various hemp and hemp-derived products covered by our reporting continued to slide in May. Reports from our Price Contributor Network, market participants interviewed for this report, and other sources have consistently emphasized that sales of CBD Biomass and extracted CBD products were already slow in the wake of 2019’s harvest, and have worsened since the COVID-19 pandemic gripped the U.S. in March.

Retail sales of CBD products were also already softening as the pandemic arrived, as we discuss in our May Hemp Spot Price Index report in an examination of Q1 financials reported by publicly-traded CBD companies. Plateauing demand has led to processors building large inventories of extracted CBD products. There are signs that direct-to-consumer sales are a potentially promising channel to move inventory at the moment, but the current state of affairs means that extractors are still largely refraining from purchasing hemp biomass outright, and instead are offering farmers tolling arrangements. As a result, we have observed the frequency and volumes of CBD Biomass sales contract significantly in recent months, even as large amounts of 2019’s harvest remain unsold and 2020’s crop gets underway.

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