The international Hemp import / export business while young, is poised to BOOM in the United States. In this article, we address what is currently happening in hemp import / export, and how we expect the market to mature over time.
At the present date, importation of Hemp products consists mostly of CBD isolate for two important reasons. The first reason is CBD isolate is a price dense product. When considering the S&H costs of moving a product, something of substantial size like biomass comes with logistical challenges. While biomass is generally is worth .10 – .20 cents per gram, CBD isolate market price is around $7.5/ gram, 50x more price dense per volume.
The second reason why CBD isolate is a popular import is because CBD derived from Hemp in the United States exists in a legal grey area. According to the 2014 Farm Bill, Hemp is only legal for educational and research purposes through state pilot programs. CBD derived from Hemp and Marijuana is still schedule 1 in the United States, so operating with in the state’s laws is important to be legally compliant. Companies who follow the rules to a point will only use hemp derived CBD if it originates through a licensed grower and it is produced in state, and their product is only distributed in state. The only true way to have a national CBD product is to purchase CBD internationally, where the CBD beings it’s life cycle as CBD in the United States, and not as Hemp or Cannabis. Most people who are extremely diligent in their operating procedures buy European CBD Isolate, with kilos ranging in price from $7500 – $9500. We would like to regonize the difference between policy and law, and there seems to be a relaxed political attitude towards hemp derived CBD – especially with the impending passage of the 2018 Farm Bill.
Currently the Exportation of CBD is mostly in the form of flower quality Hemp, aka smokable hemp. Markets like Switzerland, where they have legalized low THC Cannabis, Hemp is being used as an alternative to smoking tobacco based cigarettes. Great work Switzerland! Trade routes to get flower quality hemp out of the USA are tricky because not all ports are friendly to the material. Earlier in the hemp season we did see the export of CBD Isolate into other countries, but due to the shortage of raw materials in the USA, we have seen CBD isolate exportation fall.
In the future, I believe that there will be two main markets for exportation, CBD isolate and CBD distillate due to the high value density of CBD. This is because the USA is poised to become an agricultural power in Hemp, and industrialization will create an opportunity for the USA to become a world wide hub for CBD. While flower quality Hemp will still be a export, the size of this market will be substantially smaller.
When looking at future imports, we will still see low price point CBD isolate entering our market, likely from China. I think the European markets importing CBD isolate into the states will start to fade due to price competition. The crude CBD oil importation business will continue to develop, and thrive, originating from countries who have a lower cost of labor can manufacture hemp at prices that cannot be matched by first world countries.
Import / export of Hemp and CBD is a complicated process that should not be taken lightly. Before engaging in this business, be sure to get legal advice to navigate national and international law. With Hemp and CBD not being legal in all countries, your trade routes can impact the legality of your product. Be diligent in your ventures, we need all of you to lead the future of this industry.
Thanks for reading,