The rapid growth of the CBD industry has created a thriving market for hemp biomass, which is the...
The CBD Hemp Biomass Market
Following the passage of the 2018 Farm Bill, the hemp biomass market grew exponentially. However, as supply outpaced demand, it led to a significant slump in prices. Fortunately, the market has begun to rebound in 2024, presenting renewed opportunities for growth and sales. Despite these fluctuations, immense potential remains for those looking to cultivate and sell CBD hemp biomass. Ultimately, the success achieved will depend on the quality and safety of the plants, as well as the buyers and the deals made.
How Does Quality Affect Biomass Price? (Boosting the value)
How much CBD does the hemp contain? The more potent the harvest is, the higher the price because pricing is directly dependent on the concentration of CBD per pound (measured on a dry weight basis).
How was it harvested? Harvesting method is another factor that may influence the quality and price of the product. According to CBD Hemp Farms hand-harvested plants may produce up to 5% more CBD. Machine harvests, on the other hand, can destroy precious CBD-filled buds.
How much moisture does it contain? When CBD biomass is not dry enough, it will result in a decreased wholesale price. Why? Hemp biomass price is determined by CBD content on a per pound basis and if a product contains too much moisture, it will be artificially heavier (and more expensive). Thus, the buyer will adjust the price to account for lower value of end product once it is cured.
Is it free of contaminants? If the biomass contains any harmful toxins like mold or residual pesticides it may severely drop in value if it’s sellable at all.
Other things to consider: How fresh it is? Any mold? did it start decomposing? The buyers may want proof that the biomass is 100% safe. That’s why it’s important to test with an accredited lab.
How to Sell CBD Hemp Biomass?
The Buyer Model: As a CBD hemp biomass producer, you have several markets to explore. You could sell directly to companies like Phase 2 Extraction that handle everything from growing hemp to processing and selling it, or work with CBD extraction companies focused solely on refining cannabinoids. Another valuable option is working with a broker, whose role is to connect farmers with buyers. While selling directly ensures you can negotiate terms like price and lead time, brokers can be a great resource—especially if you’re new to the market. They offer access to a broader network of buyers, saving you time and effort. Though brokers take a commission, their expertise can help you navigate complex deals, potentially securing better long-term relationships. Regardless of your path, securing some payment up front is always smart to avoid surprises.
Production Contracts: Another method to secure the sale of hemp biomass is to engage in hemp futures contracts, which are agreements between hemp companies and a seller to lock down pricing before the plants are harvested. This can be a beneficial business model to reduce the risk of producing plants without a buyer, allowing you to forecast profits. On the downside, when you sign a futures contract, you lock in pricing, regardless of how the market changes, which could mean selling the hemp for less than its ultimate value. While contracts may seem secure, they still rely on the people who signed them. Therefore, if you’re a small to mid-sized operation, you’ll want to vet the company on the other side of the paperwork. Working through a broker is another excellent option, as they can help ensure smoother negotiations and offer additional protections. Questions to consider: Does the contract prevent the company from backing out of the deal if they find a better one somewhere else? What happens to the contract terms if the crop tests for less than the expected CBD content? Is there a legal team in place to litigate if needed?
Hemp Field Profit Sharing: Hemp farm profit sharing is another potential source of income if you’re a biomass producer with limited cash flow. CBD hemp seeds and clones can be extremely costly and prohibitive to expanding production. Through profit sharing, you can find a buyer to supply funds for the materials and cultivation process. That buyer will then sell the harvest and split the percentage of profits with you. This helps eliminate the high barrier to entry and may be a great option, but you must also ensure that the business partner is trustworthy and can provide the final profits the business needs to thrive. Working with a broker is an excellent option here, as they can help facilitate the partnership and ensure fair terms are met.
Legal Considerations: As of the 2018 Farm Bill it is legal to buy and sell hemp biomass across the country as long as it does not exceed the threshold of THC. According to the USDA’s recent rules, hemp must contain less than 0.3% total THC on a dry weight basis, which is defined by the following equation: TOTAL THC= (%THCA*.877) + %Delta9. The USDA requires that you test at least 15 days prior to harvest. If the crop is non-compliant, it is not eligible for sale and must be destroyed.
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