With the price of hemp seed going anywhere from 80 cents a pound to $3 per seed, opportunists in Colorado looking to capture a fast profit in the hemp sector jumped all in, putting more than 31,000 acres in the ground. They believed the demand for the product was there, and it is. CBD sales were estimated at $1.2 billion dollars for 2019, according to the State of the Hemp 2018 Industry Outlook report.
They believe now is the time — not six months from now, not three months from now, not next week. Now! However, it seems no one put any thought in how to take hemp from its raw plant form to the valued end product (in this case CBD oil). They’ve got the raw product in hand and are now tasked with turning it into that “liquid gold.” They’re searching for answers and they’re willing to pay. It’s almost unfathomable to think that one five-gallon bucket of hemp seed could pay for a complete cleaning line.
So what’s the caveat? They want the solution now. Everyone believes now is the time to capture the biggest profit margin, while seeds and the crop are in short supply. Everyone wants in now.
I’ve been doing research and running hemp seed through various equipment lines, and we’ve got a line that meets the needs of the market better than anything else out there. Literally, when we show how it works and run a sample, you can see dollar signs in their eyes. The problem: they want it now, but currently there is a 24-week lead time due to the volume of orders. That means even if an order is placed today, it will be a minimum of five to six months before we can have anything in their facility. I predict that by November or December that lead time will be reduced and the equipment can be ready much sooner.
I’ve been to a few conferences — where I’ve had to drive for an hour looking for a parking spot — to connect with people and show our equipment. All I can say is, it really is the “Wild West.” You see a bit of everything from the traditional agronomist to the hippie, and from “backyard” breeders to investors.
In all honesty, I thought this hemp thing was going to be a fad and people were just cashing in while the market was hot. I’m not sure what the picture will look like three to five years from now. There’s still plenty of people looking to invest in the market and you can bet that there will be a number of buyouts as the market gets some legs and starts to mature.
Obviously, I wasn’t there for the Gold Rush back in the 1850s, but if this is anything like it, it’s sure to have a ripple effect and change the landscape of agriculture and other commodities.