Over the last year we have been investing heavily into Hemp. Below is a breakdown of the market size.
2019 Acres Planted: 200,000 (Cowen research, hemp benchmarking studies)
Expected Yield: 50%
Acres Harvested: 50% * 200,000 = 100,000
Plants per Acre: 1,500
Biomass Lbs/plant: 1
CBD: 8%
Biomass $ per % CBD: $3.00
Total Biomass: 150 Million Lbs
Biomass Value: 100,000 * 1,500 * 1 * 8 * 3 = $3.6 Billion
Convert Biomass to Kg Crude Oil: Divide by 28 (this is what processors have told us)
Total Crude Oil: 5.4 million kg
Convert Crude Oil to Kg Distillate: Multiply by 60%
Total Distillate: 3.2 million kg
Total Distillate value @ $5,000/kg: $16 Billion
I’ve seen estimates for the total end-user (not wholesale) CBD market being $6-8 Billion in 2019 and as high as $22 Billion in a few years. So how can the WHOLESALE values be $3.6B for just biomass and $16B for distillate??
The discrepancy is even bigger when trying to convert the distillate to retail/end user values:
3.2 million kg of distillate = 3.2 trillion mg of CBD (1kg = 1,000,000 mg)
A good value tincture bottle might have 1,000mg of CBD in it for $50.
3.2 trillion mg / 1,000 = 3.2 billion tincture bottles. At $50/bottle that is a market of $160 Billion.