So much of the cannabis sector in Canada has formed around the THC market. Starting with medical, moving into recreational and now towards the plethora of opportunities that are Cannabis 2.0.
What we don’t hear much about is the opportunity that is CBD and more specifically CBD from hemp. Both CBD and THC can be extracted from marijuana, but only CBD can be extracted from hemp – at least in Canada hemp plants are cannabis plants that contain less than 0.3 percent THC. Let’s look at a few opportunities that can be uniquely met by CBD from hemp.
Cost: Let’s do a little math
- Indoor cannabis producers are aiming for $0.30/gram COGS ($300/kg). They aren’t there yet but that’s the end goal. From that gram you will likely have both THC and CBD.
- Outdoor hemp producers are aiming for $30/kg COGS. Most aren’t there yet but some of us are close.
Volumes: Let’s do a little math
- Indoor cannabis producers are producing massive quantities of bud that contain both THC and CBD – by massive quantities we mean 40,000 to 100,000 kgs/year of flower biomass over a 12 month period by turning their horticulture crop over 5 to 6 times a year.
- Outdoor hemp producers may only have 4 months to produce their crops but within that 4 months they can produce 50,000 to 150,000 kgs/year of flower biomass. 4 months to produce the same quantity as most indoor producers and in a fraction of the time. These types of volumes open up markets outside of the human cannabis consumer – consider companion animals products, poultry market (CBD eggs?) and other animal health markets. These may eventually become commodity markets but they are still markets.
Mass Merchandising & Product Development Opportunities:
- If your product produces CBD only components that opens the market to product development for a much larger consumer market. It also opens up the mass merchandising markets associated with beverages, beauty products, NHPs, foods (Weston and Loblaws, potatoes, InBev/Pepsi/Coca-Cola, etc.) and much more.
With a better sense of the opportunities, the next market play becomes a little clearer and although we are in the middle of a cluster storm there is light at the end of the tunnel and the light is bright and will shine for decades to come.