Hemp Market Reports with PanXchangeRJ Hopp, Director of Hemp Markets at PanXchange discusses the state of the industry.
RJ Hopp, Director of Hemp Markets at PanXchange, spoke with Kristina Etter, editor of Cannabis Tech, in the first episode of a new, joint-monthly podcast, "A Tech Moment: PanXchange Hemp Market Report."
PanXchange delivers insights into the commodities markets, and following the 2018 US Farm Bill, they now cover hemp. The monthly hemp report provides reporting on hemp pricing in five key markets: Oregon, Colorado, Kentucky, and the recently added Great Plains and Northeast. The platform tracks several key commodities, including biomass, winterized crude oil, full-spectrum distillate, broad-spectrum distillate, and cannabidiol (CBD) isolate.
Each monthly report includes updates to regulations, both across the US and abroad, and notable hemp headlines. In the last few months, the report has also included a detailed examination of some of the industrial applications of hemp, which tend to get overlooked in today's CBD-focused world.
PanXChange Hemp Insights for March
In March's podcast, Hopp noted that he had witnessed the commodity prices for hemp slip over the last few months in specific markets, like Colorado and Oregon. Prices are operating at a discount in the Great Plains, while the Northeast is selling at a premium.
Prices tend to fluctuate, even within the US, due to the ever-evolving regulatory situation. In some respects, hemp still operates within an administrative gray area, where not every federal department nor state governor is on board with the new pro-hemp developments in the US. As only one example, transportation issues continue to plague certain markets, both in the producing areas as well as in the exporting regions.
Notable Global Legislative Developments
Hopp told Cannabis Tech, "I view legislation as a huge topic for this industry," especially with the constant developments and direct impacts for both producers and exporters.
One of these developments includes the Federal Food, Drug, and Cosmetics Act (Bill 5587), which was introduced to the House by Rep. Collin Peterson from Montana. Bill 5587 seeks "to amend the Federal Food, Drug, and Cosmetic Act with respect to the regulation of hemp-derived cannabidiol and hemp-derived cannabidiol containing substances."
Hopp believes "this is a response by the government in terms of how long the industry has waiting regulations from the FDA." To date, the country is still waiting to see what consumer products can legally use CBD and who will be responsible for policing the CBD consumer market. On January 23, 2020, legislators referred the bill to the Subcommittee on Biotechnology, Horticulture, and Research.
Another exciting development, which essentially mirrors the regulatory discussion in the US, comes from the European Union (EU). The EU is currently reviewing hemp, including CBD, under the EU Novel Food rules. Since 1997, the Novel Food protocols have been in place to regulate new-to-the-EU foods meant for human consumption. The rules control which foods are safe for use, labeling requirements, and more. Each EU member state has the ability to accept or reject CBD as a Novel Food, and this will have significant global repercussions.
There is a suggestion that some states, namely Germany, may reject CBD as food and instead label it as a pharmaceutical. But, Hopp believes that with a general EU acceptance, "this is the precursor to hemp becoming a global commodity."
An American Development: Crop Insurance For Hemp
Another problematic ripple effect stemming from hemp's introduction into American agriculture is the lack of traditional crop insurance coverage. Once again, the legal gray area has impacted the ability of hemp to operate as a conventional crop like soy, wheat, or corn.
In the first few years of hemp cultivation in the US, some farmers experienced extensive damage from weather events like hail storms in Oregon and out-of-season snowstorms across Montana. Until recently, these farmers have not been allowed to file insurance claims for financial losses. Thankfully, crop insurance now extends to hemp for the 2020 season.
But, Hopp details how even with insurance coverage, hemp is still a unique crop. Coverage does not apply should environmental conditions tip the level of THC over the legally mandated 0.3 percent. According to Hopp, this is not an insurable loss. Farmers must also have contracts in place before planting to qualify. This requirement will likely benefit vertically integrated growers but leave many other farmers high and dry should they fail to secure a contract before planting.
Timely and Evolving PanXchange Hemp Reports
Hopp confirms that as the global hemp market expands and changes, so too will the PanXchange monthly commodities report. In the future, they plan on adding high-demand cannabinoids such as cannabigerol (CBG) as well as new location tracking for refined products. At the moment, PanXchange tracks distillates and isolates within Colorado.
Considering there are hundreds of industrial products coming from hemp, Hopp also expects to add insights into the industrial side of the crop. He highlights hemp seed and fiber as just two of many examples of what will likely be included as the market develops and matures.