After six brutal years of price decline, high CBD biomass prices have been making steady climbs in recent months. Growers are finally seeing prices surpass the break-even point for the first time since a glut of material flooded the market in 2019.
As seed breeders—and among the few still producing high CBD biomass genetics—the last few years have been just as challenging for us as they have been for growers. We have innovated, pivoted, downsized, and peddled seeds well below our production costs just to keep a few lights on.
With material prices on the rebound and fresh seed stock produced, its time for the market realizes the real cost of quality genetics. Seed prices will rise, and we expect the trend to continue.
Why? For the last five years, seed pricing has been based off of those looking to liquidate instead of innovate - and everywhere along the supply chain has been in a similar situation.
Lets take a look at where we are and how we got here.
Bulk Seed Prices vs Gross Sales Revenue
Seed costs for farmers in consumable crops typically range from 8% to 25% of gross revenue, depending on the crop and its associated value. This applies across dozens of food commodities. For example:
- Corn: Farmers allocate 10-15% of gross revenue for high-yield hybrid seeds.
- Basic Food Crops: Onions, Carrots, Lettuce, Spinach, Broccoli, Cauliflower, Peppers, Cucumbers, Pumpkins, Watermelons, Cantaloupe, Cabbage, Kale, Eggplant, Zucchini, Garlic seed costs come in around 17% of gross revenue - on the lowest end with hybrids fetching far more.
- Specialty Crops: Crops such as tomatoes or strawberries often require 20-25% due to the critical importance of seed quality in achieving premium market prices.
Currently, we are seeing prices reach above $0.30 per percentage point of CBD extracted from CBD biomass material. This means biomass at 10% CBD can earn over $3.00 per pound.
With this in mind, F1 hybrid, certified organic, high yielding, high content, feminized CBD seeds in bulk should cost a minimum of $0.30 per seed, assuming only a one pound per plant average with 10% CBD returns. This number is relatively easily attainable for biomass growers, with varieties like our Lifter seeds, that consistently produce 1.5 pounds or more of material per plant with often over 12% crude oil returns.
Yet, if we charged the appropriate $0.30-$0.50 a seed to bulk seed buying biomass growers—who have grown accustomed to paying a small fraction of that—they would be shocked.
Why is hemp different from other agricultural sectors? The answer is history.
The Rise and Fall of the US Hemp Industry
In 2017 and 2018, growing hemp for high CBD biomass was highly profitable and limited to a handful of farmers in a handful of states. The new industry saw entrepreneurs setting up extraction facilities across the country, and there wasn’t nearly enough hemp grown to keep things rolling. With extremely profitable biomass prices, the masses came looking for the next cash crop. Add to it that tiny amounts of CBD was being put in every kind of product imaginable from dog treats to deodorant. The industry seemed unstoppable.
By mid-2019, 47 states had passed legislation to allow hemp production. Planted acreage reported to the USDA surged from 32,464 acres in 2018 to 146,065 acres in 2019. Unfortunately, the CBD craze just didn't catch on as well as anyone had hoped. The cannabinoid doesn’t get you high, and the small doses added to products were hard for most people to notice. Meanwhile, the FDA outright refused to recognize the cannabinoid as even mildly beneficial, leaving major retailers and producers hesitant to make and sell products that were still technically illegal.
Massive over-production fueled nothing short of a great collapse. Biomass prices plummeted from almost $20 a pound for material to around $1.50. Desperate farmers sold material at whatever price they could get just for some return on their investments. Many had no outlets and all and lost their farms.
Then came the Delta craze.
Enter Delta 8, Delta 9, Delta 10, THC-O, etc.
The 2018 Farm Bill states that hemp products must contain less than 0.3% Delta-9 THC by weight. With loads of material to play with, savvy chemists began converting CBD into intoxicating cannabinoids, such as Delta-8 and Delta-10, which aren't theoretically covered by the Farm Bill.
These lab-derived cannabinoids are either sprayed onto low THC flower or added into products like vaporizers, drinks, edibles, etc. The craze caught on quickly, and vendors across the country jumped on board. People everywhere started getting high—and liking it.
Fortunately for extractors, with the massive amount of material produced in 2019, there were stashes available for pennies on the dollar. Not only are these new cannabinoids quasi-legal, but they are relatively cheap to produce from hemp. Even Delta-9 crept into piles of products with labels stating they contain only 0.3% by weight. The beverage market has opened up in a big way, as even a small amount of THC in a can can pack a punch.
As labs continued to gobble up material at bargain basement prices, few farmers remained in the game. With production costs nearing above market prices for biomass, producers were forced to cut every corner possible just to try and eke out a few cents per pound. Seed were one of the first corners to cut.
2020-2023: The Seed Breeders Demise
Farmers weren’t the only ones who saw dollar signs in 2018. Aspiring seed breeders jumped into the market just as quickly, producing huge stockpiles. Some were decent, but the majority were garbage. Many fly-by-night vendors popped up, burned countless seed buyers with poor germination rates, un-feminized seed, or extremely low content/low yielders and were never seen again. Farmers didn't even realize they’d been burned half the time for months after buying.
With the drop in acreage that followed the 2019 seed buying frenzy, breeders were caught with big inventories. There were few farmers left to grow them and fierce competition between vendors.
Naturally, seed companies began going out of business and liquidating stock. Farmers grew accustomed to picking up seed well below production cost - though arguably most were bad beans. Brands like High Grade Hemp, IHempX, Beacon, Arcadia, Phytonyx, and Phylos Biosciences, which once seemed unstoppable, slowly faded into the shadows. There was no money in breeding hemp seeds, let alone good ones.
In 2022, it was estimated that around 7,000 acres were cultivated for floral hemp—and at $0.10 per seed (a common seed cost in this era), that would have yielded around $1.75 million to be split among all the big names. This number is hardly enough to keep any one seed company afloat, let alone over half a dozen. Not to mention the small independent breeders who also had a piece of the pie. Add to it that good seeds cost significantly more than $0.10 a seed to breed. Even at break even point, no seed company has any encouragement to make seeds for the following year.
As biomass supplies slowly began to fade in 2023, a few more farmers crept back into the game, planting higher densities or even direct sowing upwards of 20,000 seeds an acre - reaping the rewards of defunct suppliers just trying to sell out. While the majority who went this route failed, they helped clear vast quantities of old seed stock that belonged in a bag of bird-seed over a farmers field.
2024: The CBD Supply Chain Meets It's End
Then, in early 2024, the realization hit extractors that the large quantities of cheap material were finally gone. Weary buyers had exhausted every resource, scoured every forgotten barn and every last moldy super sack from Washington to South Carolina. But the appetite for CBD, Delta-8, Delta-9, Delta-10, THC-O, and others had only grown. Processors needed more material, and they were starting noticing the effects of inflation on their inputs. It no longer made financial sense to run low content material - even if it was basically free.
Biomass prices slowly rose. Farmers were encouraged to jump back into it with the promise of mediocre payouts. Labs and middlemen set up contracts, and farmers signed away—unprepared for the costs of inflation. The “juice” was just enough to keep some growers coming back, but the normal repercussions of low supply and high demand didn’t effect hemp the way they do in other industries. Downstream buyers simply didn’t want to pay more for what they'd been getting for below production costs.
The Great Lab Disconnect
With a lack of supply, and a growing demand, most commodity markets would see prices shoot up rapidly. For hemp it's a very slow process. A portion of this can be attributed to the complicated web that is the hemp for intoxicating cannabinoid industry’s supply chain.
There are many stages in the process of turning CBD flower into consumer-ready products like Delta-8 vaporizers or Delta-9 drinkables.
Farmers start seeds, plant fields, tend to them for months, and finally harvest and mulch material for several more. For large acreage its a massive undertaking.
Eventually the material is shipped off to a processor to be extracted into crude CBD oil, or distillate in the case of CO2 extractions. Labs either buy the material outright, charge the grower to extract it, or take a portion of the oil/distillate as their extraction fee. Then, in the case of intoxicating cannabinoid production, the crude oil is turned into CBD isolate—a crystallized version that’s often above 98% CBD.
From there, it is shipped off to other lesser known labs for conversion into Delta-8, Delta-9, Delta-10, etc. These labs generally like to stay fairly quiet as they hold stock piles of technically federally illegal substances.
From there, it heads wholesalers who’ve created formulations for products to be packaged - or to consumer brands. Often products are broken down and packaged again before they make it to the consumer. Sometimes there’s more vertical integration along the way, but in general, it’s a long journey from the field to the gas station in Texas that sells it.
With such a long and complicated supply chain, and still a few bottle necks from years of over supply, prices have been slow to rise down the chain for products such as isolate and the Delta's. Those who've been able corner large swaths of the market fight to keep them, and a hefty price increase can take down a monopoly. But the writing is on the wall, everything is getting more expensive and the actual costs of doing business are becoming real.
Today: The Rebound of High CBD Biomass
CBD biomass prices have finally gone up, and for the first time in years, some farmers are even excited about it. While it may never be the cash cow it once was, it’s another crop for those with large acreage, a steady workforce, and fancy equipment. With only a limited few still in the game, we’re hopeful for a market that can continue to grow without bottoming out again anytime soon.
After liquidating most of our old seed stock, produced from the revenues we made in 2019, it’s been go-time around the farm. We’ve filled up as many greenhouses as our small crew could manage and made it happen. After a few years of hiatus from producing in bulk, it’s been brutal seeing how much it actually costs to churn out a few million seeds compared to what we were charging just to get rid of them. A mistake we hope never to make in the future. We’ve raised our prices to match our increased costs—and we hope they will cover next year’s seed runs. They certainly aren’t anywhere near the 10% of gross revenue we should be charging.
How Have We Survived?
Innovation. While most other seed companies poured money into advertising, PR firms, fancy conventions, and non-plant-related expenses, we took a plant-first approach. We focused on creating field-ready, high-cannabinoid, early-finishing, feminized F1 hybrids that worked across the nation. Farmers can grow huge yields and harvest them before they rot. And consistency. We’ve never allowed any of our seeds to be bred outside our facilities, and we maintain very high-quality control standards.
In 2019, when we saw record profits, we spent virtually every dime on building out facilities and a workforce capable of creating new, innovative products. From the industry’s first high-CBG seeds, compliant at harvest, to low-THC, high-CBDV varieties, and the first commercial triploids. More recently THCV and triploid THC seeds.
The amount funds required to build facilities that can produce seeds effectively at scale is mind-blowing, not to mention the millions the company spent on scientific research. At one point the company had 48 full-time employees -- from brilliant scientists to a massive production team. While we innovated, demand spiraled downward.
Fortunately, smokable hemp flower genetics and our ultra low-THC offerings helped supplement the few remaining bulk biomass seed buyers. But by 2023, the writing was on the wall, and we were forced to downsize drastically. We pivoted to working with more home growers than 1,000-acre farms and fine-tuned our high-THC content varieties, but our principles remain the same. Consistency, reliability, and excellence.
We are thankful to have farmers across the nation who rely on our genetics year after year for their success. That said, the significant downturn has not left a lot of money for innovation. Hopefully that changes.
Industry Stabilization
The most important thing that can happen to the hemp industry is stabilization, which will only occur when the true costs across every sector are realized—from seed prices to high-cannabinoid biomass to crude oil, distillate, isolate, Delta-8, and gas station vaporizers. They can no longer be based on desperate times of liquidation. The traditional rules of supply and demand will hopefully bring the industry back to where it should be.
If you are interested in growing biomass for CBD, CBG, CBDV, THC, or THCV, reach out to us, we can help.
For a list of our best high cannabinoid producing, most economical CBD, CBG, and CBDV seeds, visit here. We offer great bulk pricing and the most reliable genetics in the industry.
