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July 5, 2022

Half Way Through 2022 Hempnomics

Half Way Through 2022 Hempnomics
Half Way Through 2022 Hempnomics
Half Way Through 2022 Hempnomics

Hi everyone,

I hope you had a happy and healthy 2021 and first half of 2022. With all the craziness of the pandemic, starting another business, and admittedly falling down the crypto hole for a sec, I strayed away from what I think is a very important part of my life and business.

Educating about the hemp and cannabinoid space, specifically sharing data and economic trends our business is accumulating.

It seems that every year we have a different conversation at Amota during our end of the year meetings. A testament to the ever evolving industry. This year was no different. Alt-cannabinoids (D8, THC-O, D10, HHC, etc.) took center stage as the industry continues to pump out understudied cannabinoids that have a bigger effect on people from a psychoactive standpoint. It doesn't look like this trend is stopping anytime soon (enter THC-C, THC-H, THC-B, etc.)

Whether reluctantly, or not, a vast majority of industry players have decided to throw their hats into the circle and play ball with their customer's demands for these novel cannabinoids. Pretty much every farm or farmer/business I have talked to over the last year has implemented some kind of alt-cannabinoid product into their line up.

Remember when Delta-8 first hit the scene and everyone was claiming it was non-psychoactive? Oh how far we have come.

Now it seems that most of what is on the mind of buyers nationwide is how psychoactive is it?

CBDa and CBGa recently made the news as potential COVID killers/deflectors. Would have been nice to have it announced a bit sooner as COVID although still very serious, seems to be a lesser version of itself and trickling off a bit (thank goodness).

A lot to talk about as always in this space, but I am going to cover what everyone wants to hear about most.

Money and trends.

Who is spending, what are they spending it on, what products are the hottest, and where I think the market is headed.

As always these are my opinions derived from the analysis of aggregated data from sales within the Amota Group family of hemp businesses (,,,, conversations with other major distributors in the space, news/media articles that many of you in the space also have access to, and possibly most important of all, the users and customers that keep the wheel turning in this space.

I can be reached at where I welcome all feedback, constructive criticisms, open opinions, and disagreements with an open heart and an open mind. I enjoy nothing more than conversing with others in this sector, call our office line anytime to connect. Together we are stronger in this space.

Current Market Prices


I want to start with biomass, as I continue to get calls from farmers to discuss this area. The discussions center around the very low bid price ($.10 per % point seems to be where extractors want to be). I've spoken to multiple extractors at this point and conversations suggest that demand for biomass is rising and supply is becoming more scarce.

However, I've visited many farms that have thrown in the towel as far as even making an effort to market their products anymore. This is creating a slightly artificial scarcity of biomass. In other words, I believe there is a lot of biomass still out there, you just have to find it. I do believe that biomass will become much more scarce in mid to late 2023.

I've been a hardline believer that the biomass sector will never see a recovery above $3 - $5 ($.30 - $.50 per %) per pound ever again, the height of biomass' recovery price will be when legislation opens the doors for the major CPG companies to enter the space. Even then it will last less than a few months as farms will become contracted to grow for these companies or the extractors they are working with. They will rely on Big Ag to become their suppliers at rock bottom prices in America's farming heartland, the Midwest.

Currently, I am hearing biomass is fetching anywhere between $.80 and $5.00 per pound depending on the quality. This is specifically for CBD and CBG biomass. As we creep towards a decade of this space's development (using 2014 as year 1), it is clear that one must have a mostly automated system to harvest, dry, clean, separate, and mill their biomass for buyers. Otherwise making it a profitable endeavor becomes difficult. The disconnection between these types of processing centers and farmers is what puts a lot of strain on the supply chain causing biomass lots to never be found.

The biggest problem around the biomass supply chain is the absence of a centralized location to act as a clearing house for materials.

Buyers want to be able to visit, touch, see, smell, and test biomass lots in a centralized easily accessible location. Biomass lots holed up at farms way off the beaten path don't do them any good. It's 2022, people want things in the most convenient way possible. Until we can unite as an industry and create a hemp elevator type of scenario for biomass, the supply chain will struggle. Unfortunately there is no trust between players in the space, so this is a very tough task.

Any CPG company in the space will likely require that the biomass has been run through food grade standards of processing throughout its path to becoming an ingredient. This will hold true within the extraction space for sure. If an extractor doesn't have the proper certs, licenses, and safety protocols in place, their chances of winning these types of contracts will be extremely low. We have yet to see any benefits to growing certified organic material, although I do feel it will reap rewards eventually for those of you that go that route.

Smokeable Flower

The smokeable flower market seems to be reaching a point of stability, which many should be excited about. As a distributor my conversations around how the supply chain for smokeable flower products should operate have become much more reasonable and pleasant.

Everyone's realization as to where they fit best within the supply chain is the most important part of the stabilization of this sector. Too often I hear a farmer upset about the retail prices of their buyers. I'd like to break this down a bit as Amota entered the retail space in 2021.

First, anyone who has a consumer facing brand knows how much work it is just to keep their products in stock and properly packaged for distributors. Perfect COAs, barcodes, child safety packaging, merchandizing, etc.

Once that is figured out take into account how quickly customer sentiment changes in this industry. Every time something new comes out (which is pretty much every month), customers want that. Into the production line we go with ANOTHER SKU that may not have a ton of longevity. My point is that the retail side is riddled with obstacles, much more so than wholesale. It's crazy expensive to keep up, and your marketing strategy (which is also very expensive) has to work 24/7.

Competition on the retail side is ruthless & fierce. If you thought there was a lot of competition in the growing space in 2019, the retail space faces far more than that. It feels like a completely unregulated playing field. You can get away with throwing anything in very trendy packaging that resembles Cookies or Stiiizy, and hope it resonates with customers. Just attend a "CBD" trade show (which have pretty much become alt-cannabinoid shows), and see for yourself. It's a tough sight to behold.

Does anyone know what the font Cookies uses is called? Many people must at this point.

Retail brands deserve a lot of respect in this space as they require an immense amount of flexibility and cleverness to eat market share, trust me we are still figuring it all out on our end. It takes an immense amount of capital to scale quickly with several SKUs and keep back stock. They've also spent a lot of time and energy on their marketing strategies, accumulating massive amounts of content across social media, and building SEO.

My point is that everyone from top to bottom is working very hard to keep the industry flowing, even if you don't agree how they may be doing it. Let your peers within the space have their margins, we all lift each other together, you need to operate within your means to understand where your margins should lie.

If you ask anyone in the flower space to whom and for how much they were selling their flower for in 2019 or prior, they'd say $300+ a pound and who cares who bought it!

Well, right now, everyone cares who bought it because that pool has shrunk tremendously, and price is 50% of where it was. Competition is becoming more abundant is a market that is trying to reach a perfect competition atmosphere. Those prices were inflated big time, and everyone should have seen the price crash coming. Farmers, y'all got spoiled a bit during those years. You reaped fat margins during that period and now many are upset about retailers getting them today. Your attention should be on how to adjust to the market, not on what retailers are making.

It could be argued that people were producing their pounds for a much higher price at that time, because it was new to most. Probably between $100 - $125 a pound, maybe slightly more for the people who had no idea what they were doing. Either way, you're still looking at a 50%+ margin back then.

We must remind ourselves that we are in a business that not only is an expiring commodity, but has almost no diversity in product (comparatively), and is mass produced every year. The name of the the game is MOVE VOLUME FAST.

How do we do this together?

By having a better grip on the reality of the current supply chain, not the supply chain in 2016 or 2018.

Farms without sales teams NEED brokers and distributors, period, end of story. Sales never hurt any business, no matter how they are achieved. Think back to who sold a lot of your product in the "golden age" of $300+ lbs, you're in denial or in a rare pool if the answer isn't some kind of network or involvement of brokers.

There has always been a guy who knows a guy from day one, that is cannabis, welcome.

Large buyers and brands know the costs of producing many of the products in the space by now, they come to the table ready to negotiate off of those prices. You should be between sub $100 on hand finished flower if you're doing it right, if not you should talk to your labor about the realties of the market, figure out better SOPs, or exit the space. The supply pyramid should look as follows for us all to prosper.

Producer/Wholesale Farms

  • Produce for $60 - $85 tight machine/hand touched

  • Sell For $100 - $175 to distributors/brokers, Sell for $200+

  • Small buds cleaned and sorted sell for $30 - $60

You are looking at a minimum 30% margin and a maximum of 70%+ in some instances. Average that out over the volume and you probably fall between 35%-50%. If you get stuck with product it is because you passed on some offers before, you need read the market and execute trades/sales at the right time. I am still not quite sure how people just sit on an expiring agricultural product. Unless it was heavily seeded, moldy, or has pesticides (it should be destroyed by the way) there is no reason to.

MIDDLE: Brokers/Distributors

  • Buy for $100 - $175 tight machine/hand touched

  • Sell for $140 - $300, depending on quality, volume, or retailers demand

  • Sell small buds for $50 - $90

Minimum margin 10%, maximum ~60%. Average those out and you're falling somewhere between a 30% - 40% margin. Brokers and distributors jobs is to move volume, as a participant in this sector communication is the key element that keeps the wheel turning. No need to leave money on the table if all information is properly relayed to all parties.

TOP: Retail Product Manufacturers, Brands

  • Buy for $150 - $300

  • Sell for $20/eighth which pencils out to nearly $2500/lb for a whopping 80% - 90% margin! But wait...

Let's dissect that number a little further. MOQs on packaging & labels, supply chain issues and delays, manufacturing the products, marketing, web design, and customer service staff add several elements that a producer, broker, distributor may not have to deal with. All of those aspects cut into those margins pretty deeply, not to mention that distribution is extremely competitive and in many instances take as much as 30% and they want the product on net terms.

At the end of the day, yes, retailers are probably coming away slightly better profits. However it isn't by as much as one would think, and this is simply how most industries naturally function, it's the norm. It is rare for retail products to just fly off the shelves in volume as well, especially in this space.


We have seen a nice increase in sales of extracts since the onset of alt-cannabinoids into the space. Whether you love them or hate them, alt-cannabinoids have been a major factor in the outflow of biomass, crude, distillate, and isolate.

With the increase in volume comes the feeling of temporary price stabilization. My conversations with extractors have mentioned large crude contracts coming in as low as $75 - $85 per kg for 60% oil. Non contract will be slightly higher, $100 - $135 range.

Full spectrum distillate has been used for conversion to alt-cannabinoids and settles in at a price range around $175-$250, although you may be able to find product being liquidated for less.

Isolate has been available for as low as $270, less in some instances of liquidation. That inexpensive of product gets gobbled up very fast, it has been in high demand so most will find it to be priced somewhere between $400 - $700 per kilo. It is a large range, but producers are able to toggle between these prices because of demand.

Delta 8 distillate ranges from $400 - $850 depending on what market you are buying in and its potency/color.

THC-O is $700 - $1200

HHC is $1400 - $2000

Delta 10 is $1400 - $2200

The list goes on and on. I will stop there as those are the most highly sought after and realistically priced alt-cannabinoids.


Where is the industry headed and what are the trending products?

This industry is tough no doubt. To know exactly what will happen is nearly impossible. It has changed every year since we have entered. I'll give it a crack and let you decide.

I believe that in the THC and CBD space, flower will become a commodity much like wheat, corn, and soy. Sungrown cannabis will by and large become a raw material mostly used for the processing of oils. Both sungrown THC and CBD will become "biomass" only, with a very very small market for smokeable. That smokeable market will mostly be in the pre-roll sector. The new generation of users have no interest in extra steps in their smoking experience. This is most notable in the meteoric rise in vape oil and vape devices. People no longer want to grind, roll, or pack their cannabis. They want the shortest path to consumption. This is the trend in the 21st century.

This means that whoever can produce for the lowest price is going to win big contracts, this also means that Central and South America will enter the space and be enormous players in the biomass and oil space. Another looming challenge for American farmers.

The smokeable flower market will continue to shrink and ultimately become a niche market for aficionados and die-hard flower lovers. Indoor will dominate this space, and only a few large players will dominate the brands like P&G, Kellogg, Johnson & Johnson, and General Mills dominate the grocery store shelves with thousands of brands of the same products. They will create budget brands that crush COGS so low that you'll see them dominating the bargain or exit racks at stores and dispensaries (if alt-cannabinoids continue to be allowed in smokeshops and gas stations/c-stores).

Smaller boutique operations with excellent branding and marketing will have an impact in this space as well, but they will need to build a very loyal customer base, and keep them engaged with innovative products.

Budget brands are going to see an enormous growth spurt as the war on price continues between everyone in the space. We will see thousands more pre-roll and vape companies emerge to try and gobble up market share, and the already successful ones will create more brands to get more space.

My hope is that hemp as a resource to replace many of the products that pollute and destroy the planet will gain traction. This will likely be fought by big corporations until they can figure out how to profit from it themselves, but as long as it makes headway we should all be excited for the possibilities.

There are many more cannabinoids to be isolated and used in formulation so realistically the trends we are seeing in product creation could last for decades.

As always please reach out to me if you'd like to have a conversation about the space. I can be reached at and am always looking to meet and discussion issues with people within the space!

Supply chain solutions specialists in the hemp/CBD space since 2018. We are the industries most trusted contract manufacturer and wholesale distributor with customers in over 40 states and 7 countries.

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Supply chain solutions specialists in the hemp/CBD space since 2018. We are the industries most trusted contract manufacturer and wholesale distributor with customers in over 40 states and 7 countries.

Get in contact!

Subscribe to our newsletter and we’ll keep you up-to-date with template news and special deals. We don't do spam. Ever.

Supply chain solutions specialists in the hemp/CBD space since 2018. We are the industries most trusted contract manufacturer and wholesale distributor with customers in over 40 states and 7 countries.

Get in contact!

Subscribe to our newsletter and we’ll keep you up-to-date with template news and special deals. We don't do spam. Ever.