Understanding The Smokable Hemp Flower Market
For many hemp farmers, the 2020 grow season added heartache to an already grim pandemic year. Excess biomass from 2019 left deteriorating in storage drove wholesale prices to new lows. But the year’s end yielded a bright spot in one market segment: smokable hemp flower.
Some states have banned it, while others have embraced it or looked the other way. But for hemp farmers and consumers, craft hemp flower and smokable hemp popularity keeps growing.
From Bans to Benefits
Much opposition to smokable hemp flower rides on law enforcement’s inability to easily distinguish federally legal hemp flower with low tetrahydrocannabinol (THC) content from higher-THC cannabis.
Wholesale bulk flower prices were down more than 50% from December 2019 to May 2020. But bulk flower values slowly began to rise and finally passed back into a positive price difference in November 2020 from the previous year—the only major category to do so. Month-over-month pricing increased 32% from November to December 2020, when bulk industrial hemp flower was selling at around $250 per pound.
Hemp consumers have learned (and research shows) that inhalable products offer the fastest delivery of medicinal and therapeutic benefits of cannabinoids. As the hemp market matures, it appears consumers are willing to pay more for high-quality craft hemp flower. And farmers are responding.
Hemp growers are producing more indoor-grown and greenhouse-grown smokable hemp, as the popularity and demand for the product has cemented itself last year.
Some growers are running their operations somewhat similarly to those who grow THC cannabis—cultivating it indoors so that the flower can be grown in more controlled cultivation conditions.
Some smokable hemp flower that is craft quality and organic, is commanding premium prices relative to national averages. International pricing for hemp flower is rising as well.
Caught at the Crossroads
As the smokable hemp debate moves forward, state bans have left some flower farmers in limbo. In Texas, a state ban prohibits the manufacture, processing, distribution and retail sale of hemp for smoking. But a subsequent legal challenge and temporary restraining order prevent the ban from being enforced until the lawsuit is resolved. (As of press time, the next hearing for the case, Crown Distributing LLC et al. v. Texas Department of State Health Services et al., was set for March 22.)
There’s no question that flower—especially premium craft hemp flower—represents a farmer’s most lucrative option. In 2020, regional wholesale pricing for hemp flower ranged from $300 to $1,500 per pound, depending on quality and cannabinoid content. Commercial greenhouse-grown hemp flower typically goes for $500 to $1,000 per pound. Retailers are selling product for roughly double the wholesale cost.
Craft hemp flower which is hand trimmed and properly cured will usually demand a price of $1200-$1500 per single pound.
Conscientiously crafted hemp flower can also overcome negative consumer perceptions caused by misleading and mislabeled CBD products. When you look at smokable hemp, you can’t ignore the quality of the flower and a test result that shows you the percentages of cannabinoids. Consumers know exactly what they’re getting in their hemp flower.
Growing premium hemp flower is a much more labor-intensive process than growing hemp for extraction or other purposes. There's a whole other skillset to learn how to handle it, post-harvest, and it's very different than how you handle hemp biomass.
For any grower expecting to add hemp for an extra turn in the greenhouse, they should use caution. It is not as easy as say planting a winter crop of vegetables or ornamental flowers.
While hemp may be a little more forgiving than high-THC medical cannabis, growing for higher cannabinoid content in either market leaves plants more finicky. That’s another reason that controlled environments such as indoor and greenhouse grows yield higher-quality crops. But that too comes at a cost.
Craft hemp flower producers invest time, labor and inputs comparable to premium recreational cannabis or medical cannabis growers, but margins don’t stack up.
While wholesale pricing for bulk industrial CBD hemp flower was around $250 per pound in December 2020, a pound of outdoor-grown flower in the cannabis market brought $900 per pound. Greenhouse-grown cannabis hit $1,400 per pound.
It is a very expensive and tedious thing to produce a high-quality bud for smoking.
But while biomass remains a tough sell right now, and despite price disparity with medical cannabis, business models with hemp flower can be profitable.
Over time demand for smokable hemp flower and other inhalable hemp products will increase. But industry obstacles to the segment’s growth must be resolved.
The most important thing we can do as an industry is really promote the development of technology that helps distinguish between hemp and marijuana—kind of roadside THC testing. This will eliminate most of the challenges that we see from law enforcement.
For those growers that are looking at it and seeing the price difference and thinking maybe they can make up their margins that way, it’s important to be aware that growing premium hemp flower does come with extra costs to bring a really solid product to market.
The growing process is almost easier than the curing and drying process and this is a critical step that many large farms just cannot do right.
Without the proper drying and curing environment, hemp flower loses it terpenes and becomes less than desirable to inhale.
But if done right, there are no shortage of CBD hemp flower consumers looking to medicate with a quality, flavorful hemp bud, like the ones grown by Dreamland Organics!