We have in previous reports emphasized the current glut of biomass on the market, which has led to farmers being unable to move their harvests. Such market conditions continued in January, with numerous members of our Price Contributor Network reporting that relatively little buying and selling of biomass was taking place. Transactions that were reported showed high-CBD biomass prices continuing to sink, with the assessed rate for transactions of over 1 million pounds down 53% from last month. Even the assessed price for high-CBG biomass experienced a 27% downturn. Reports from our network indicate that large volumes of biomass remain unsold, suggesting that further price erosion is possible.
Additionally this month, numerous price contributors stated that sales of extracts, specifically distillate, have been sluggish. Very few spot cash purchases are being made and inventories held by producers and processors who are taking splits or tolling fees are growing. THC Free and Broad Spectrum Distillate retained value better than other hemp-CBD extracts, but still saw month-overmonth declines of 15% and 7%, respectively, in their assessed rates. Meanwhile, reports indicate that existing processing capacity is being taken offline and anticipated new capacity will not be realized in some cases, as several major extractors face financial pressure for various reasons.