The U.S. hemp market continues to heat up for a variety of reasons, mainly because the general populace is finally starting to understand the difference between cannabis as marijuana and cannabis as hemp (and the benefits of CBD and other cannabinoids derived from cannabis). In this post I’ll discuss why China’s pain can be U.S. hemp producers’ gain.
Basic principles of economics dictate that in the U.S. hemp market where demand stays constant (or increases) and supply decreases due to something like a coronavirus in China, the price of that good increases (sometimes substantially), enriching existing suppliers and drawing more suppliers into the market.
And it is also true that where there is available supply (U.S.) with the same or better good that can make up for the decreased market supply without substantially increasing the cost of that good, those suppliers will fill the void, equalizing supply and demand. China’s export-led hemp industry, with its normally outsized international presence, is no exception.
U.S. hemp producers happen to be 7,000 miles closer to the U.S. market than Chinese hemp producers. And do not forget that China’s hemp industry is only now starting to diversify from its industrial hemp products into