Hemp processing bottleneck could mean losses for farmers, setback for industry

The hemp industry is lacking the processing infrastructure it needs to turn raw hemp plants into extracts and other products, a bottleneck that could cost farmers and hopeful hemp businesses millions this year.

California-based extraction machine manufacturer Delta Separations estimates the industry could see $7.5 billion worth of hemp rot in the fields because of supply chain issues ranging from banks that are reluctant to finance hemp and CBD businesses to farmers who have not secured contracts from buyers, reported Crain’s Chicago Business.

“There hasn’t been the ability to install the infrastructure to support” the fledgling cash crop,” said Roger Cockroft, chief executive officer of Delta Separations. “Farmers are scrambling.”

Licensed hemp production acreage increased more than 554% in 2019, the first growing season after the plant was federally legalized, according to advocacy group Vote Hemp.

The current challenges are being reflected in slumping prices for CBD, reports PanXchange, a Denver-based hemp commodity exchange platform.

“We’re definitely seeing some downward pressure on refined products over the last few months,” noted RJ Hopp, the director of hemp markets at PanXchange.

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