Hemp supply challenges since CBD plunged

Hemp supply challenges since CBD plunged

As producer of the NoCo Hemp Expo, Southern Hemp Expo and Winter Hemp Summit, Morris Beegle has an up-close view of all aspects of the hemp and CBD markets and supply chains. It also operates its own brands of hemp products, including Silver Mountain Hemp Guitars, Tree Free Hemp Paper and Printing and One Planet Hemp, for apparel, posters and accessories. We spoke to him about the changes and challenges in the hemp supply chain.

Five years ago, the CBD hysteria made hemp seem like a bonanza for American farmers. where are we today

Morris Beegle: If only things looked as promising as they did then. Unfortunately, the CBD market experienced a downward spiral due to overproduction in 2019 and 2020, along with a lack of guidance from the FDA regarding the regulation of CBD as a dietary supplement and food/beverage additive. Market prices fell, and large companies and investors remained on the sidelines due to regulatory uncertainty. This significantly affected farmers and caused many of them, as well as other operators, to leave the industry. He also created the catalyst for the intoxicating derivatives of hemp [IHDs include delta-8 and other compounds] market that appeared across the US, which helped alleviate the excess CBD biomass and isolated market that had built up. However, this has only added to the confusion and regulatory challenges for the industry.

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What are American farmers who successfully stayed in hemp doing?

MB: Those who are still in the industry and have weathered the storm are finding more demand today for cannabinoid material, and there is greater demand for both fiber hemp and grain hemp, the more traditional path we expected when hemp was reintroduced in the US through the 2014 Farm Bill.

What is the US processor landscape like right now and what are companies doing to succeed there?

MB: Many of the cannabinoid extraction processors have consolidated or gone out of business. Many have also been targeted to include IHDs and other new cannabinoid products that have been developing on the market. We have seen several hemp fiber processing facilities spring up over the last three to four years, and this trend is likely to continue for the foreseeable future, along with hemp grain processing in terms of hemp hearts, hemp oil hemp seeds, hemp protein powder and hemp. cake and other hemp ingredients for the animal feed markets.

Five years ago there was talk of competition from international producers. Has this materialized?

MB: Not really. Canada still dominates the hemp grain markets and Europe dominates the nonwoven fiber markets. You’re going to see the United States cut these areas over the next five years. China and Asia dominate the textile market, which probably won’t change much outside of Mexico and Latin America looking for a piece of it. When it comes to cannabinoids, the US will continue to be a major player until Latin America and Asia fully ramp up and can offer significantly cheaper options without losing any quality.

We still hear about CBG, CBN and other cannabinoids as promising for commercial development. How can this affect the supply chain?

MB: These cannabinoids are already here and gaining momentum. I think CBG in particular shows great promise, not just as a ingestible compound for supplements and nutraceuticals, but potentially as an industry-focused compound that appeals to synthetic chemists seeking alternative biorenewable feedstocks to replace petroleum (oil) in multiple applications.

What is the state of the hemp supply chain in terms of quality compared to five years ago?

MB: As with most things, time provides the ability to develop new technologies and improve efficiency. This is also the case in the hemp supply chain. Product quality in all hemp categories has improved. Technology is evolving. Prices stabilize. As difficult as it has been over the past four to five years, the industry is in a position to really expand if certain regulatory and policy initiatives occur. That’s the big “if”. It comes down to politics and regulation. To date, this has been the biggest obstacle to a robust and thriving hemp industry.

This article originally appeared in NBJ’s Supply Chain Issue. For more information on the supplement market, subscribe in Nutrition Business Journal.

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