Coming together to talk business trends and make predictions for the future of hemp, the executive team at Arbor Vita8 kicked off their first podcast. All the key players were there, sharing their insights, experiences, and feelings about what the hemp industry needs to overcome and what it has to look forward to.
To share what’s happening now in hemp, and where it’s ging in the future were Jason Sirotin – CEO, Justin Jeffries – President, Galen Kelly – Chief Growth Officer, Scott Patterson – Chief Operation Officer, and eventually Sundeep Dhaliwal – Chief Financial Officer.
Decreasing the bloat of inventory
A key feature of the hemp industry today is inventory. Over the past two years a huge build up of biomass occurred. This left a bloat of product in need of selling to meet demand. The excess is decreasing though thanks to the demand for D8. This cannabinoid isn’t extracted from hemp in the same way as others. Instead it’s made by “crashing” crude oil. For this reason, demand in biomass and/or crude oil, which comes from biomass, is rising.
This puts the state of things into a promising light. The release of the inventory bloat should have a significant impact on pricing as supply and demand level out. It’s also good news for farmers, since any influx of activity, in the long run, keeps hemp growers in business.
Deciding what product consumers want
What propels demand, though, is understanding the market. You have to make what consumers want, and with hemp that often changes based on the next ‘big’ thing. Currently, that’s D8. Delta-8 is gaining traction because it has the potential to produce effects similar to marijuana. But, it won’t get you high. Additionally, D8 comes from hemp, so it’s currently legal in most states. Large levels of THC, like what you find in marijuana, are not.
The potential of D8 is pushing processors and manufacturers toward developing efficient methods to make products that feature this cannabinoid. They want to profit at every level. However, D8 has its own controversy to consider. Naturalists aren’t big fans since D8 doesn’t exist without a little help. Those working in cannabis don’t like it because it competes in areas where marijuana is legal. There’s also confusion about the legality of the cannabinoid since not all states allow you to sell it.
As things become clearer, and regulations get established, D8 has huge potential on the medicinal side of the market. It certainly fits into the cannabinoid lineup, but there’s a waiting period to get through as the FDA looks at the compound and more studies come out about its benefits.
Gaining more guidance
What’s currently holding up the growth of the hemp industry is the existence of specific regulations. Without them, there’s a permanent gray area with too much up the air to make it clear the right way to behave.
A lack of guidance, a consistent framework, and all the states being on the same page causes confusion. Even within the specific issue of whether D8 is legal, things are cloudy. When you can’t see your process clearly, it can upset the success of the industry.
A legal framework in regards to the hemp industry is much needed, but its development is slow since it’s such a complex issue. As it moves forward, everyone should be ready to deal with compliance confusion.
Combatting pricing vs product popularity
In addition to waiting for better and more consistent regulations, pricing is another hurdle leading to confusion. We all learned about supply and demand – that when demand is high so is price — yet this standard formula isn’t working right now when it comes to products like hemp crude oil. Although it’s in high demand, and has been since 2019, there’s still an expectation to pay prices that align more with a lower demand.
This could be a result of there being too much product out there right now. Buyers know supply isn’t going to run out, so they’re not wanting to pay a higher price. Some of the lesser cannabinoids aren’t taking off as fast as everyone had hoped either which means the products that require more processing, netting a higher price, aren’t requested as often.
This can all change with the help of the consumer. It’s the consumer who really dictates price and establishes a product’s popularity. Yet, many hemp-derived products come with costly price tags. The solution is to make these items more cost accessible to draw in more people interested in trying them. This gives them an opportunity to see how CBD and other cannabinoids can impact their quality of life. Arbor Vita8 is trying its best to remedy this disconnect with competitive pricing for all products sold online. We’re at least 25% lower than other retailers.
What all this will do is allow for different hemp-derived products to hit the market and have an opportunity to gain traction. These are the products that require more processing and can net profits for each member of the supply chain. The team at AV8 sees a future where the minor cannabinoids will find their place. As the FDA takes a more aggressive stance on products, expect to see things like THC-free products and those that are water soluble make a splash.
Seeing the future potential of hemp
Staying focused on the present is important to rise to meet any challenge, but it’s also necessary to look ahead and prepare for the future. At AV8, we’ve got our eyes on industrial hemp and the plant’s tri-crop potential. The plant could do so much for industry in general, but hemp fiber is positioned to really blow up. And, while it works for textiles, where it could hit big is in the construction industry.
The hemp plant is so much more than the flower. Growing the plant as a tri-crop lets you harvest the flower, while also using the rest of the plant for things like grain. The stalk even makes a woody material that has huge potential within building materials and insulation. Hemp fiber is poised to become a big innovator in this construction industry as soon as building codes allow the incorporation of hemp into approved materials.
At Arbor Vita8, we’re ready for the next boom in hemp. We’ve felt confident from the start that this little plant has massive potential in a variety of sectors. Staying on top of developments is essential to our business model. We’re constantly working to modify and improve our facility to handle new demands. We also stay on top of the latest research and developments through the products we offer in our online store. You won’t find better products at such affordable prices. Check us out today to learn more.