Now that the hemp cultivation program in Texas is issuing permits for farmers, this is a great time for local farmers to join this very potentially lucrative industry. In addition to learning all the different cultivation requirements, legal regulations, and current market overview, farmers will also need to think about how to sell their hemp biomass ahead of time. When planting CBD seed for CBD production, biomass must be purchased immediately after harvest and can actually pose one of the largest obstacles that hemp farmers face. Here are our leading tips for ensuring your hemp biomass is sold for the best price possible.
Understanding the Term “Hemp Biomass”
In the hemp industry, hemp biomass can actually refer to two different things. Some individuals in our industry use this term to characterize everything other than the flower of buds in the plant. In this case, it’s used to refer to the stalks and leaves. Farmers that are cultivating hemp for CBD purposes can usually also sell their leftover biomass to buyers for converting to textiles, building products, and more.
When it comes to hemp for CBD production, hemp biomass refers to the flower and buds of the hemp plant where cannabinoids, terpenes, and plant resins are more abundant. In terms of this article, we will be using the term hemp biomass to refer to this part of the plant.
How to Set the Price for Your Hemp Biomass
It’s always important to do your own market research prior to setting any prices. Having a good understanding of the current market value and local trends can help you determine the price for your hemp biomass. While there are many factors that can go into pricing, the most significant one is the amount of CBD your hemp biomass has. If you’re producing low-quality biomass with less than 10% CBD, you won’t be able to ask for higher prices per pound. If you do have considerable CBD content in your biomass, you’ll be able to achieve higher prices. Investing in high-quality CBD seed is crucial for producing as much CBD as possible in your biomass. Having your biomass tested is also highly recommended so that you can show potential buyers what you have to offer.
Ways to Sell Your CBD Hemp Biomass In Texas
There are many ways you can sell your CBD hemp biomass. Here are some of our recommendations:
- Preselling your hemp biomass: Preselling is always ideal since it can give you a stress-free harvest and also give you an opportunity to set up a contract beforehand. Taking this step gives you the competitive advantage of negotiating fair prices, finding potential buyers, and reviewing a contract. Waiting to sell gives you a short window and puts you up against other local farmers that weren’t able to presell. Finding a buyer before you plant your CBD seed can also help you determine which strains to grow. Always read through contracts to understand your obligations and percentage standards that you need to meet.
- Work with a hemp broker: Working with a hemp broker is one of the easiest options available. However, finding a good hemp broker may prove to be a challenge. You’ll want to find someone who is very knowledgeable and experienced so they have numerous existing contacts. The broker will act as a middle man for connecting you with a hemp biomass buyer. Hemp brokers should find you a buyer, negotiate the right price for your hemp, and will also take a commission that’s generally around 10%. Hemp brokers can be a great choice for first-time hemp farmers with no or limited contacts and may offer better negotiation skills. Please be aware that working with a so-so or poor hemp broker can drastically impact your profits so always ask for references and check their track record.
- Sell directly to a buyer: If you already have contacts, skipping the middle man can help optimize your profit return. Finding a processor or extractor to sell directly to may require more work but can be beneficial. Certain buyers are not willing to work with first-time farmers with no proven record or limited biomass to sell. If you decide to sell directly to a buyer, it may be a good idea to work with a lawyer to create a contract.
- Join a profit-sharing agreement: First-time Texas hemp farmers can have a difficult time with the initial investment costs of switching over to hemp. Since CBD seed is a significant investment and farmers often have to invest in labor, equipment, and irrigation system, one way to help balance the costs is with a profit-sharing agreement. This agreement works by farmers working with a biomass purchaser who covers all upfront costs of the farming operation. The profit recoups these initial costs and the remaining additional profits are split between the purchaser and farmer. While it can take time to find someone willing to enter this agreement with you, it can be a great option if you’re limited on funds.
- Hemp futures contracts: In order to minimize some of the risks tied with farming, a futures contract may be ideal for you. This contract is signed before CBD seeds are even planted and determines the price per pound to which your purchaser agrees to. Since this is done beforehand, the price per pound is usually less than the value offered in the open market. The benefit of this option is that it offers predictability and stability since hemp prices fluctuate and could protect you from unforeseen price drops. Always read through contracts carefully and only work with reputable companies.
- Other options: Hemp farmers can get creative to find the right buyer. From social media outreach to attending hemp tradeshows, there are many other options available.
Work with Texas’ Trusted CBD Seed Provider
CBD Seed Co. is honored to be the trusted CBD seed provider serving Texas. Our team is available to help answer any questions you have regarding selling biomass and is always happy to provide recommendations. For more information regarding hemp biomass selling tips, please contact us!