Latest developments in the CBD Isolate Bulk marketplace as it relates to supply, demand, pricing and more.
What is bulk CBD isolate?
First we need to define CBD isolate. Isolate is CBD in it’s purest form when extracted from the hemp plant. It is in the form of crystals or powder typically 99%+ CBD. The word “bulk” is open to interpretation depending who the user/buyer is. For a single user who is consuming CBD isolate in edibles, vaping or whatever, 5 grams could be considered a bulk purchase. For a new edibles company testing formulas for their new products, 1-10 kilograms would be considered bulk quantity. For more established CBD products companies 100-10,000+ kg can be a bulk purchase. For NewVista Hemp, a leading supplier of CBD isolate in bulk, they have a minimum order size of 100kg to cater to these established CBD companies.
Supply of CBD Isolate in Bulk
The hemp plant is being bred for high CBD content in order to produce the highest yield. When the hemp plant has a higher percentage of CBD content, it requires less hemp biomass to extract the same amount of CBD isolate. This means there is less time, effort and equipment use in order to produce higher yields of CBD Isolate. In short, the production of isolate is becoming more efficient and providing a larger supply which is typically is a driver of lower prices in the marketplace. But is this more efficient and greater supply actually bringing bulk CBD prices lower? We’ll see later in this article.
Another driver of production efficiency and thus yield is the extraction technology itself. The extraction and distillation of CBD isolate into its purest form is a lengthy process. In the beginning it had many manual labor steps that have become more automated over time. In addition, newer technologies including steam and sonic extraction are promising even greater efficiencies, production and rapid scalability of CBD isolate.
Demand for Bulk CBD Isolate
The demand for CBD isolate in bulk is experiencing explosive growth. This growth is catalyzed by both grass roots consumer love and demand for CBD as well as the consumer enticement produced by manufacturers who are creating new and valuable products for consumers to benefit from. The products are expanding from CBD oils and vapes to topical pain and skin creams to edibles including a plethora of food and beverage items. Here is a chart from statistica showing overall consumer demand of CBD.
Is Demand Outpacing Supply?
This is challenging to know for sure because there are no formal data based on statistical validity that we are aware of. We can only surmise by looking at the pricing trends of bulk CBD isolate. As I write this article on October 28, 2018, we are starting to see the harvest of this year’s hemp crop thereby increasing the raw material biomass supply used to produce CBD isolate. This increase in raw material has naturally increased the amount of bulk CBD isolate as well.
Many in the industry believed that this increase in supply of raw material would lower prices however we are seeing prices increase. If we use the informal metric of price as a determinant of demand vs. supply, we can say that the demand for CBD isolate is outpacing supply because the prices are increasing. Could this demand be pent up from buyers who have not been able to get a reliable supply of bulk isolate due to the limitations of biomass supply? Or buyers who have been guessing that prices would come down with this fall’s harvest and thus held off from buying?
It’s a fascinating market and it still may take a good 6 months from now to tell more definitively about supply, demand and correlated pricing. Regardless, it is an interesting ride indeed.
What is your opinion? We would love to hear your thoughts so feel free and comment below.