Hemp markets continue to evolve with new players and collaborations emerging as others confront reorganization, divesting CBD divisions, or bankruptcy.  Emerging CBD enterprises are built on the current reality of demand, and organized around active markets in the US, Latin America, Europe, or Asia.

Fiber companies are also capitalizing operations and developing strategies for building an entire supply chain.  We reported on Panda Biotech back in December, and since then they have collaborated with industry experts like Guy Carpenter of Bear Fiber.  They recently announced that they have commissioned a high capacity decorticator, the Hemp Gin, for their yet to be sited facility in Texas cotton country.  The planned scale is in contrast to The Hempville’s, the North Carolina company that is actively decorticating on a Formation Ag built machine.

On the food side, Manitoba Harvest is tethered to Tilray, a Canadian MJ company that is now apparently a popular short bet in the stock markets.  It’s too early to tell how Manitoba Harvest is doing in 2020, much less after the seismic shift caused by coronavirus.  Meanwhile, Victory Hemp, Hemp Northwest, Healthy Oilseeds and other small and medium sized hempseed grain and oil processors and sellers continue to carve out their own markets.  Victory Hemp has developed hemp derived protein products that have broad application for food, particularly in light of supply chain disruptions with meat.

On the Cannabinoid side, giant Canopy Growth has scaled back their global operations.  They have also ceased their farming activities in Springfield, NY where they grew hemp for biomass. They continue to develop their Hemp Industrial Park in Kirkwood, NY for which they received a $1.7 million tax break.  Charlotte’s Web has seen declining sales despite spreading into 9000 retail locations.  CV Sciences, another widely distributed brand, saw Q4 2019 sales slouch by a third.  These market-wide decreases in sales may be directly tied to the FDA’s statement on CBD late last year, saying that CBD may have some safety concerns.  This received widespread news coverage, and likely had a significant impact on boomer buying.

Kentucky has been especially hard hit in hemp markets with bankruptcies from Sunstrand, Atalo Holdings, GenCanna and now, Elemental Processing.  The impact on Kentucky hemp farmers has been dramatic.  Kentucky hemp farmers have experienced widespread contract breeches from companies for a variety of reasons but underlying them all is a shortage of cash. GenCanna has shifted much of their operations to South Carolina, where Specialty Oil processors has developed a high capacity extraction facility.  Only Sunstrand has folded, the others are reorganizing and shedding debt, in hopes of a fresh start, bringing to bear knowledge of current market conditions.

Green Growth Brands has shuttered their CBD operations in US malls, and the other major players have seen contraction.  Simultaneously, new brands emerge every day.  There are several thousand CBD brands out there, much of which the market cannot support.  This will evolve like any market, and many will fade as the strong emerge from both larger companies and small craft ones.

International marketing has been successful for hemp derivatives until the disruption, but extractors report continued negotiations with buyers abroad.  Collaborations are also emerging, like Brazilian company CBD Vida’s deal with Des Moines based Kermin Industries, or Youngevity’s arrangement with Nicaraguan companies, involving a 2200-acre farm and yet to be built extraction facilities.  There is still activity in these markets, and ancillary industries like seed sellers, or hemp harvesting and drying contractors, are well positioned as the landscape continues to evolve at a rapid pace, and new farmers prepare to plant their first hemp crop.

Hemp Biomass (% CBD/lb)