Sky-high hemp prices are expected to fall back to Earth this fall, but that doesn’t mean the green rush is headed for a crash landing.
“We’re looking at around $18,000 an acre — last year we were four times that amount,” predicted “Pioneer” Pete Gendron, president of Oregon SunGrown Growers’ Guild.
Despite the steep drop, he said it’s still not so low that most farmers won’t make a profit, and he said seed producers are ready to pivot to the next big thing derived from this cousin of cannabis.
Other industry leaders don’t think prices will fall as low as Gendron estimates, but most think they will go down.
Hemp, the biggest agricultural crop in the Rogue Valley, is grown for CBD, or cannabidiol, but Gendron said cultivators are hard at work perfecting other strains that read like an alphabet soup of cannibinoid molecules. Cannabis plants contain more than 100 cannabinoids, which some studies suggest result in various health benefits as they react with the human body’s endocannabinioid system.
Jackson County has the most hemp grows of the 36 counties in Oregon at 8,578.9 acres. Josephine County is a distant second at 4,328 acres, followed by Harney County at 4,200 acres, based on statistics from the Oregon Department of Agriculture. Acreage in hemp has surpassed pears and vineyards combined in the county.
Jackson County also has the most hemp growers in the state at 337. In total, 55,911 acres of hemp are planted in the state, with Cannabigerol, or CBG, is the chemical parent of THC and CBD, according to Leafly.com, and it seems to be the next big thing in the hemp world. Some research suggest CBG helps with glaucoma, inflammatory bowel disease, Huntington’s disease and cancer. Many of the studies of CBG are from Europe.
While CBG is coming into focus on the hemp horizon, Gendron said he’s told producers to get ready for plummeting pricing and to make sure they’ve got buyers lined up before they get their plants in the ground.
Hemp has hit a high note for the last few years, but the crazy pricing is about to end.
“It’s an unrealistic spread,” Gendron said. “I’ve been telling people, 2018 will never happen again, 2019 will never happen again, but you’ll be thankful in 2020.’” He expects the market to stabilize by then.
Even though there are 56,000 acres of hemp in the state, Gendron said it’s likely only 60 percent of it will make it to market, as some growers stumble to get crops ready or don’t line up buyers.
“A lot of growers are not prepared for the harvest market,” he said.
Gendron doesn’t expect seed producers to devise a strain of hemp that doesn’t have the distinctive odor that some find objectionable, because the terpenes are a prized component of the final product.
Outdoor grows will continue to dominate the local hemp scene because simple economics dictate the need to take advantage of the abundant and free sunshine in the valley, he said.
Greenhouses will still be important for research and development, because multiple crops can by cycled through in a year to develop better strains. Greenhouses will also continue to be important for more finicky strains.
Peter DeLong with Cannabreeder Associates in Talent said high-quality smokable hemp is running about $800 to $1,000 a pound at the end of August, but after discussing it with Jefferson Hemp Exchange and www.hempexchange.com, he said it looks like prices will drop anywhere from $350 to $600 a pound after the harvest comes in.
For lower-grade hemp that is used to extract CBDs, the price is currently about $35 a pound, but will likely drop to $10 to $20 a pound this fall.
The pricing for hemp is based on two things generally, the percentage of THC in the flower and the weight. For $35 a pound, the percent, known in the industry as the point, of CBD is 10%.
DeLong, who is at a research and development facility near Talent that is part of the Cascade Collective, said the 900,000 feminized seed starts this year from Southern Oregon went to local growers and throughout the United States.
The research facility is also trying to produce plants with high CBG content for growers.
“We really see the strong potential to be a leader in genetics and seeds for hemp,” he said.
Feminized hemp seeds generally produce 99.5% female plants, so DeLong says growers still have to carefully monitor their fields to weed out unwanted males.
He said he urges growers to know their breeders to make sure they get strong genetics out of the final plant.
Even though the number of hemp grows has exploded over the past year, DeLong said he expects the climate in Southern Oregon, the local expertise and the facilities will sustain a strong industry for the foreseeable future.
“For Southern Oregon, the high-quality smokable flower is the market we should be aiming for,” he said. “When we talk to other states, what do you think they want? Oregon flower.”
Oregon State University has also partnered with hemp seed producers to help with the certification process.
Jamie Syken, owner of Dirty Arm Farm, said there’s been a tenfold increase in the amount of hemp being grown this year, so he expects prices to drop dramatically.
He said he’s not sure how much it will drop, and he’s not sure how much of the acreage will actually produce marketable hemp.
“There’s a lot of guys out there with big hats and no cattle,” he said. “There’s going to be a lot of desperate people who don’t know how to dry it.” Without proper drying techniques, the plants could be ruined.
This year hemp growers have been hit with insect infestations, so a lot of the fields are being sprayed with organic products, Syken said.
Also, some growers have seen their plants flowering too early, possibly a result of bad seeds.
“Basically, the plants are autoflowering right away, so you see all these fields with very small plants,” Syken said.
CBG products are still relatively new, and Syken has heard reports of stratospheric prices.
A liter of CBD goes for about $2,400, he said, but he’s heard of a liter of CBG for $22,000.
Skyken’s company, which has a processing plant in White City, has just released a tincture containing THCA, or tetrahydrocannabinolic acid, a close molecular relative of THC, the active ingredient in cannabis.
Syken said the THCA is good for people who want pain relief but don’t want to feel stoned.
He said the THCA molecule is almost identical to THC, but the molecule is slightly larger so it doesn’t pass the blood-brain barrier. Most flower purchased at a store has THCA in it, but it converts to THC when heated. The fresher the flower, the higher the THCA levels.
Under the Dirty Arm Farm label, a THCA tincture known as “Restorative” costs $78 for 120 servings and is available at Rogue Valley Cannabis, which has three locations in Jackson County.
“THCA gives you the body high, but not the head high,” he said.
Reach reporter Damian Mann at 541-776-4476 or firstname.lastname@example.org. Follow him on www.twitter.com/reporterdm.