- The
fast-growing hemp market is driving intense competition, with innovative
cultivation practices serving as a major factor of differentiation
- Hemptown’s
cultivation methodology, paired with a genetic modification advantage, is
expected to lead to increased yields and lower costs
- The
company is scaling up operations to meet rising demand; it anticipates up
to $200 million in revenue by 2020
Legislative changes in the U.S. and other parts of the
world, as well as changing consumer attitudes, are contributing to the rapid
expansion of the hemp products market. The industrial hemp market is
anticipated to grow at a CAGR of 18.3 percent through 2027 (http://ibn.fm/Hstkn). Market
research indicates that the CBD segment is the one that will grow the most,
with some forecasts suggesting that that the CBD product market could reach $20
billion by 2024 (http://ibn.fm/4xDh6).
Combined with THC products, this market is on course to reach more than $45
billion by 2024.
Such lucrative forecasts are contributing to the
establishment of numerous producers and CBD companies. To be successful,
however, these enterprises need some competitive advantage.
One of the biggest strengths in the future will come from an
ability to maximize hemp yields and bring down production costs. Companies
like Hemptown USA are changing hemp cultivation through
technology to keep production costs low and optimize yields.
Hemp Production Cost: A Numbers Game
Yields from hemp are highly variable and dependent on
numerous factors. Soil type, irrigation effectiveness, control of pests and
seed genetics all play a role in determining the effectiveness of agricultural
processes.
Since many companies currently compete to establish leading
positions within the lucrative market, maintaining optimal prices is one of the
key essentials. The goal cannot be accomplished whenever yields are
insufficient or the agricultural process is too expensive. Apart from
cultivation and agricultural factors, economic principles also have to be taken
into account for the determination of hemp price trends in the future.
Reports suggest that the price of hemp went up after the
passing of the federal Farm Bill (http://ibn.fm/CG8NG). Some forecasters suggest that it will
remain elevated due to the high demand and growers’ current inability to meet
it.
Main Factors Impacting Hemp Production Prices
Hemp doesn’t grow well on wet soils or in those featuring a
heavy clay content. Right from the start, the number of plots available for
effective cultivation is limited.
Additionally, hemp is a short-day plant. It starts to mature
only when the day length falls under 12 hours of sunlight. This means that
growers have a limited amount of time to produce the crop, if they plan to do
outdoor cultivation.
Currently, there are no herbicides in the U.S. labeled for
use on hemp (http://ibn.fm/K0EHN).
This means that weed control has to happen mechanically – the old-fashioned
way, by hand. Furthermore, hemp can be affected by diseases, pests and insects.
All of these factors need to be controlled for the yield to be optimal and the
cost of production to remain reasonable.
Growers also need to focus on characteristics of the hemp
seed, one of the most important parts of the plant (http://ibn.fm/fNqf2). They have
to work on increasing the size, the CBD content and improving the seed’s
shattering resistance. Such goals can be accomplished through technology and
genetic modifications.
Modern Technology to the Rescue
Innovative hemp cultivation practices allow for the
optimization of plant yield and the reduction of costs. Companies like Hemptown
have established themselves as low cost producers, because they control all of
the variables that may reduce effectiveness.
One of the easiest ways to increase yields and eliminate
waste involves controlling environmental factors (http://ibn.fm/Eetxk).
State-of-the-art hemp facilities can accomplish the goal in several distinctive
ways.
Hemptown employs a “soil to oil” methodology that involves
experienced professionals working in a few selected agricultural microclimates
across Oregon’s Emerald Triangle, Kentucky and Colorado. In 2018, Hemptown
harvested 110,000 pounds of full-spectrum biomass with CBD content of
approximately 17 percent from the Oregon hemp farm.
In 2019, the company is scaling up operations to meet the
growing market demand for affordable hemp and CBD oil. As per initial
estimates, it will cultivate over one million pounds of hemp. By 2020, the
company’s projected revenue will reach $100 million to $200 million as the additional
farming operations reach full capacity.
Genetic modifications and control over the seeds provide
additional opportunities for reducing the cost of hemp production. In addition,
such innovative practices allow for the cultivation of hemp plants that have
highly desirable characteristics.
Hemptown has the rights to one million rare cannabigerol
(CBG) seeds that are genetically modified to yield anywhere between 15 and 20
percent full-spectrum cannabinoids. This fact positions Hemptown as one of the
future leaders in the CBG oil production market, a fast-growing segment of the
cannabinoid market due to the multiple uses and benefits associated with CBG.
For more information, visit the company’s website at www.HemptownUSA.com
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Editor@QualityStocks.com
Scottsdale, Arizona
www.QualityStocks.com
480.374.1336 Office
Editor@QualityStocks.com
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