Supply Greatly Outweighs Demand For Hemp And CBD Products Across America
You may want to pour a whole bottle of tincture over your tongue to prepare for what you hear. It's a numbers game here, but I guess we need to deliver the whole CBD product to America.
Here's a question: How many acres of hemp does a company need to supply all the CBD products in America? In 2019, Charlotte Web, the largest hemp company in North Carolina, had sales of nearly $95 million. In this crazy boom, Charlotte Web reportedly grew to 862 hectares in 2019, and that's projected to increase annual production by 10 percent from 2019 to 2021. So if hemp companies are growing so many hectares, how much do they need?
They have a stock of 30,000 kilos of distillate, and that is just an anecdote; huge amounts of inventory are being piled up.
Using a 1,500 mg tincture, "Lerner said at a Zoom webinar hosted by the Hemp Industries Association, would mean less than 3,000 hectares would be needed for the entire CBD market in the US. There is no doubt that the CBD industry must serve the public with hemp and CBD products, but there is a huge gap between the demand for hemp CBD and the supply of the product itself.
Farmers across the country face a busy growing season in 2019, with the last agriculture bill signed into law in December 2018. The number of hectares planted rose from 77,000 hectares in 2018 to 250,000 hectares in 2019. Massive flooding, which caused prices to plummet, reduced the number to 103.00 hectares by 2020. We're still talking about 103.00 hectares, but we only need 1,500 mg of CBD tincture, not a million mg, "Lerner said.
With so many hemp plants, is it even reasonable for farmers to plant another one in 2021, or is there a risk that this year they will simply plant CBD? Only 4.4% biomass would be needed in 2020, but only 3.5% in 2019, when farmers will be planting one by 2021.
We have a huge oversupply and buyers are few and far between, so the hope is not the strategy. The company is still working on inventory for 2019, but it's not a strategy, according to Chief Financial Officer Michael Dolan.