10,000 kilos of CBD – Market Analysis

The 10,000 kilo CBD isolate buyers (unicorns) are circulating through the hemp industry at an increasing rate.  The story is always the same, “I have a client who has proof of funds for 10,000 pounds of kilos a month.” In this article, we examine what it takes to produce 10,000 kilos of CBD isolate, when our industry can fulfill this order, and can the consumer market consume this amount of CBD?

To start chasing this Unicorn, we discussed the total US output of CBD isolate per month with the top extractors from Nevada, Colorado, Kentucky and Tennessee.  This critical conversation addressed the current output and growth rate of extraction facilities.  The key question is, when we the CBD industry reach a point of market saturation?  This is an important factor – because prices will plunge when the market shifts from a CBD shortage to surplus.  

Total USA CBD Isolate Output

Our collective conclusion estimates the total monthly output of CBD isolate to be 3,200 kilos / month.  At current market price, the value of wholesale CBD is $22.4M / month, and $224,000,000 / month when the CBD is sold to end consumers in a CBD finished good.  The methodology we used to come to this conclusion combines our knowledge of current isolate extractors (confidential), and the large scale crude extraction processors.

Will USA extractors be able to produce 10,000 kilos / month to fill these gigantic orders?  The answer is yes. Our deep insider connections confirm that the industry is in the process of scaling up to a 10,000 kilo / month output in the next 6-9 months.  Major industry extractors have closed funding upwards of 50M to support the growth of isolation power- and investments are being implemented to solve the bottleneck of isolation processing power.  

Inevitable Biomass Shortage

The next big bottleneck that we will incur as an industry is a shortage of material.  With more processing power coming online, we are eating through material faster and the major extractors recognize we will run out of biomass material.  We urge farmers to contact our Kush Marketplace team on how to best navigate sales and the harvest cycle.  Our team is running the largest hemp biomass auction in June to ensure fair market price is earned by our farm partners.

Total USA CBD Demand

What is total consumer demand?  With 328M people in the USA, if we assume that 3% of the population consumes CBD at a rate of 10mg / day, that is 35B mg of cbd / year, or 35,000 kilos.  This is near our current CBD production rate! In order for the industry to sustainable scale, we need federal legalization which will increase the quality and quantity of distribution channels.  We also need import export to continue to thrive, thanks for showing us the path way forward Canada.

 

Sincerely,
Michael Gordon
CEO
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