Not long ago the news media was awash with awash with glowing economic reports about the burgeoning hemp and CBD industry following the enactment of the 2018 Farm Bill. Everyone was going to get rich. And quick.
Fast forward to 2021 and things have changed dramatically. At least here in Oregon, selling biomass—especially biomass preceding the 2020 harvest—is a tough game. Many hemp producers that I know in Oregon planted less acreage this year than in 2020, and far less than in 2019. The cost and risks of growing for biomass have generally exceeded the rate of return (ROR). Add in an uncertain regulatory environment, a processing bottleneck, and the fact that consumer demand for hemp/CBD simply has not matched the glowing (and in hindsight, outrageous) predictions that led many investors and businesses to go “all in” on hemp makes this is tough industry.
Even the hemp flower market (e.g. smokable) is not delivering promised returns for investors. Just growing the hemp can be an expensive and risky proposition (drought, fire, male plants, testing). Add in the costs of harvesting, drying, bucking, trimming, and storing—which may exceed $60 per pound—and the ROR just isn’t what everyone thought it would be.