Remember the days of the “26-year-old yoga instructor in LA never before in business tasked with sourcing $6 billion worth of CBD annually for a big client” a decade ago?
I still say it was at least in part the Chinese doing market research.
They now supply most of the “U.S. Hemp” market via CBD converted into “legal” Frankenoids at a price ($200/kg) lower than U.S. farmers can compete.
Long the world’s largest grower and processor of hemp as well as the world’s largest producer of Active Pharmaceutical Ingredients, it was obvious Americans had to act fast to have a proprietary advantage in the “drug hemp” CBD market. I even warned of it in 2020:
China will eventually own the low-end high-volume phytocannabinoid market, and continue to dominate hemp textiles.
There’s no reason that its cost of goods for shelled hempseed couldn’t eventually be well below US$1 per pound ($2.20/kg), even 75¢. Or COGS as low as $9 per gallon of hempseed oil.
That’s why it’s more important than ever for US hemp farmers to look to the future, innovations such as artisanal hemp for smoking as a non-tobacco tobacco-cessation tool, among others.
Artisanal products are how you can compete with cheap cannabinoid producers. There will always be a market for quality, innovation, convenience, freshness, and a heart-warming authentic story about the people producing it.
The Chinese are growing several hundreds of thousands of acres of hemp and have labs ready to distill it as the market demands. The government is kicking-in millions of dollars to make it happen and throwing expertise at it.
One of the world’s biggest markets and biggest API production (active pharmaceutical ingredients, the building blocks of medicines and products) is already right there, and they don’t need Canadian, U.S. or European hemp or consumers to achieve economies of scale.
Companies are going public on the strength of the hemp sector, and a few public companies are pivoting to hemp.
The world’s leading biotech, tobacco, and pharmaceutical companies and nonprofit organizations, all working with the government to make China the world leader in hemp and cannabinoids, and raise farmers out of poverty.
Meanwhile in the U.S., farmers are burning crops over 0.01% THC and fighting with FDA and USDA for better treatment, and a bankrupt HIA reduced to suing DEA to maintain relevancy.
If Popular Mechanics declared in 1938 that hemp could make 25,000 products, imagine what that number might be today? Millions and millions, no doubt. That’s why China is moving fast and furious forward on hemp.”