Hemp production slows due to oversaturation

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Colorado’s hemp industry is undergoing a market correction, with decreased production following an oversupply in recent years, The Grand Junction Daily Sentinel reports.

“There’s hundreds of thousands if not millions of pounds of hemp flower that has not sold from last year. We created a huge, huge oversupply and you’ll have that in agriculture,” Wacey Clarke, the owner of Colorado Hemp Solutions, told the paper. “We’ve seen that over and over again when you have new opportunities and all of a sudden leave it to the American farmer to really oversupply those new opportunities.”

According to one farmer, prices are as low as $2 per pound, down from $50 in years past. In 2019, there were approximately 87,000 acres of hemp in Colorado, but that number is reportedly cut in half for 2020.

A U.S. Department of Agriculture official warned two years ago that loosening hemp production rules could be detrimental to the industry.

“We need to be careful so that we don’t kill the market for hemp by overburdening the market with supply before there is demand for it,” said Greg Ibach, a USDA undersecretary, at a forum in Denver. The 2018 Farm Bill legalized hemp production, and the USDA issued a rule last year that governs production — although some provisions related to testing and crop destruction are on hold.

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