WHOLESALE DATA – JANUARY 2022 Cannabinoid Monthly Playbook

WHOLESALE HEMP GENETICS PRICING

The hemp genetics market is currently finishing up its offseason. Since most harvests have been wrapped up and biomass is dried and stored by this time the next item on the agenda is planning next year’s crop. Clones continue to be significantly more expensive than seeds which supports the nurseries needed to build strong genetics.

Assessed price for CBD clones currently at $2.50, representing a ~480% higher price than utilizing a seed which are currently priced at $0.43 each. Regardless, prices for each category have remained stable over the past few months.

The CBG biomass sector saw a slightly lower month over month price change. The current average price in the US for CBG biomass stands at $0.38 / % CBG / pound. Material testing at 10% would have a fair market value of $3.80 per pound. We are advising our clients to diversify the cannabinoids they currently handle. The extraction process for CBD and CBG biomass are scientifically similar. However with only a 11% increase in input cost, an extraction company could expect a 178% higher return on their investment based on current isolate prices for CBD and CBG.

WHOLESALE HEMP BIOMASS PRICING

The CBD biomass sector experienced a great month, with prices increasing across the board. The average price for CBD biomass still stands at $0.34 / % CBD / pound, so material testing at 10% then would have a fair market value of $3.40 per pound. The extraction portion of the industry continues to experience significant volatility on both ends of supply chain. Increased biomass prices result in increased operating expenses for extractors. Pair that with the recent decrease in derivative product pricing and the coming months could prove to be a long winter for some companies.

The CBG biomass sector saw a slightly lower month over month price change. The current average price in the US for CBG biomass stands at $0.38 / % CBG / pound. Material testing at 10% would have a fair market value of $3.80 per pound. The extraction process for CBD and CBG biomass are scientifically similar. However, with only an 11% increase in input cost a extraction company could expect a 178% higher return on their investment based on current isolate prices for CBD and CBG.

WHOLESALE DERIVATIVE PRICING

The wholesale cannabinoid derivative market continues to be the most volatile and fastest growing portion of the industry. This portion of the industry drives all CPG brands, and with the growth from the sector. The derivatives for cannabinoids looks promising. The current trend in the wholesale market is the move away from CBD derivative products, and interest in other cannabinoid derivative products. We believe this is why CBD isolate prices fell from $488 to $456 per kilogram last month. There will still be demand for CBD isolate as it proves to be the best starting ingredient for delta 8,10 and HHC.

The increase in consumer good products containing CBG in cannabis dispensaries is on the rise. This is clearly seen through Wyld’s national launch of their new gummy that contains CBG. These types of national brands moving into the CBG market will continue to provide stability to prices, the current price increase is a result of increased demand based on national plays.

The significant price difference currently in the market between CBG and CBD products could create a whiplash in the markets. If a significant portion of the farmers convert their crop over to CBG, only we could see a CBG glut.

Currently we believe this will not be the case.

WHOLESALE FLOWER PRICING

CBD VS THC FLOWER

As the world continues to adopt the
non-psychoactive products, CBD flower
continues to the be strongest category
for hemp-based CBD products.

This is the first month we will start providing THC flower pricing for the US market. Our intent is to compare the THC cannabis industry with the similar CBD cannabis/hemp industry from a crop perspective. The price per pound of THC cannabis flower nationwide is currently at $1,300, which is down from $1,400 in early October.

The Canadian market continues to mature at a federal level. With increase in stores coming online consumers will have more options for shopping, hopefully driving more sales into legal markets as opposed to illicit markets.

The exchange rate adjusted price for a pound of THC Cannabis flower in Canada currently stands at $1,780. Cannabis in Canada is current valued at ~38% higher than cannabis in the US.

SECTOR ANALYSIS*

Editors’ Note: This is an excerpt from our Monthly Playbook. If you would like to read the full monthly playbook and join the thousands of others you can sign up below.

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