Since March’s onset of shelter-in-place orders, an uptick in consumption may be supporting CBD prices. In a Brightfield Group survey of 5,000 CBD consumers, nearly 40 percent reported increased use during the pandemic.
However, higher consumption seems unable to keep up with the growing supply of hemp. Average CBD isolate pricing has fallen by roughly $3,000 per kg in the last two years to some $750 per kg as of July 2020.
This drastic drop in values is attributed to increasing supply and a highly competitive market environment. As Bethany Gomez of Brightfield Group noted, “If you have a market with 3,000 brands vying for CVS, [the brands will] do anything they need [to secure retail presence],” per CNN.
Accelerated market growth still hinges largely on GRAS (generally regarded as safe) status from FDA, which may not come for some time. Such approval would encourage established snack and drink brands, now waiting on the sidelines, to bring CBD into their product portfolios.