|But demand did not materialize. Consumer packaged-goods giants like PepsiCo and big retailers like Walmart did not commit to CBD products due to FDA concerns regarding the ingredient’s safety in food and beverages. Since much of last year’s crop remained unsold, the market became oversaturated with hemp biomass and prices collapsed.
The CBD market forecasts remain promising. Canaccord Genuity expects the U.S. CBD market to pass $18 billion by 2024, up from $1.9 billion in 2018. While there was a 9% decrease in licensed hemp acreage in 2020, grower numbers increased by almost 30%.
The cultivation of hemp is a complex endeavour involving a laborious process. A healthy crop depends on a painstaking spraying schedule to keep pests away, the harvest is by hand, and it needs to be carefully dried out before being sold. Hemp farmers also need to deal with suspicious law enforcement agents with a legal mandate to burn crops that exceed the permitted THC limit. About 50% of last year’s crop was not harvested due to crop failure, non-compliant crops, and other factors. Even if all is well, farmers need protection from thieves wanting to steal the crop to flip it back into the market as cannabis.