The Economics of Hemp OilJanuary 21, 2020
Being in the business from seed to shelf I am always interested in the price of our product as it goes from one stage to the next. I thought I might share my findings with you.
First off, the farmers get around $1.00 to $1.50 dollars per % of CBD in a deal. This can average out to 10$-15$ a pound or 3 cents per gram. They will plant the seed or clone, provide the water and nutrients, protect it from insects and blights, and harvest and cure it. They bear a lot of the expense and risk and between you and me, this is NOT fair.
The processors are now getting $1,000-$1,500 per kilo crude or $2,400-$3,500 for distillate this comes out to per $3 gram. They will take the flowers and extract the CBD using expensive equipment and materials and often winterize (freeze) and distill and filter it.
The bottler brander might charge $30-$40/1000mg or $30-$40 a gram.
The retailer sells the final product at around 60$-70$/1000mg which is 60-70 per gram.
A chart of this below shows the disparity of economics. It should be noted that these numbers can significantly change on an annual basis. For example, a farmer’s price per pound fell from $35/pound in January 2019 to $10/pound in November 2019.