CBD flower vs. THC flower: why are the prices different?

CBD and THC are popular globally now. The two are on the rise, the purchases skyrocketing much like the prices. But if they come from the same source, most users are still unsure of the big difference.

Sourced from the same plant- and the same Sativa, yet you can not afford to mistake CBD and THC. You must be thinking, what is the difference between CBD flower and THC flower?

Learn the differences

CBD and THC are the most known cannabinoids found in hemp and cannabis. Cannabis has a higher THC concentration. Hemp, on the other, has a higher CBD concentration. The chemical composition of the two is the same. They consist of thirty hydrogen atoms, twenty-one carbon atoms, and two oxygen atoms.

Despite the same chemical makeup, the two are worlds apart. So, the primary difference is that the chemical arrangement is different. This slight difference alters how our bodies receive these compounds. The compounds bind to neurotransmitters once consumed. These receptors then influence things like our sleep, pain, and our memory.

The sudden rise in demand for CBD products in the past year has driven markets and sellers to devote large parts of production towards growing it. They wish to optimize the market while it is at this peak. The costs required to generate these dried and trimmed hemp are higher than those that produce cannabidiol to help biomass for causes like extraction. Published last July, Hemp Benchmarks’ latest data reflects that even a single pound smokable CBD hemp flower sold for 20x the price compared to biomass for extraction. These statistics stand true with a cannabidiol potency of ten percent for the latter.

Moreover, wholesale costs incurred for smokable CBD hemp are drastically lower than others for outside and greenhouse cannabis with a high amount of tetrahydrocannabinol (THC). Even though the procedure to grow the two is similar, in development and processing stages as well. The only difference between the two is the dominant cannabinoids.

What makes the costs differ?

Below are some factors that mark the drastic difference between the costs of THC and CBD flowers, despite their similarities.

  • Things that legal cannabis marketers and businesses have to consider are various regulatory burdens. These burdens hinder or expand this process. These include security requirements, package tracking, waste disposal regulations, expensive licensing fees (costing five or six figures per year in some states). Given these hassles, most producers pass these costs in the product pricing, inconveniencing the user.
  • Although THC has been established for centuries now, CBD has garnered attention in markets and many states. Consumers can now purchase CBD legally. Amidst the pandemic, more users are shifting to convenient purchases. CBD is even legal in most states now, adding to the ease of costs mentioned above. This promised efficiency could perhaps cause such a shift and a cause for record-breaking sales figures in many of these states.
  • Lastly, as a Schedule I, federally illegal, controlled substance, there are supply and sale caps and limits for individual businesses. Even if retailers wish to make their presence in the market, they fail to do so. This difference is because CBD wins due to a lack of these caps and restrictions. THC markets in these states have continued to strive despite these high amounts of regulations. Given that the farm bill of 2018 legalized hemp, it is no doubt that the CBD market continues to peak in most states. It pulled out hemp from the list of controlled substances administered by the Drug Enforcement Agency. Every state with a hemp production program allows producers to grow CBD, including almost every state in the U.S.  

Steps going forward

Given these many differences, one may ask what we expect going forward? Where do we think pricing will change and how?

Due to the changes in state rules for particular states, there are heavy regulations over smokable CBD hemp. These regulations begin to pose a challenge for CBD markets in specific states. They blur our hope in the CBD market’s rise for the upcoming decades. If not for the regulations, we would be in a better place to understand individual and market behaviors. With changes in consumer behavior, the hope for changes from the FDA – U.S Food and Drug Administration is also high.

Current regulations on smokable CBD also limit those markets today. This restriction inhibits most insights on understanding market sizes with comparative certainty.

The market interest and engagement may gradually come down or may stabilize over time. In states where cannabis is legal, producers have observed gradual stability in user behavior and purchases. These insights can help new retailers and sellers to make decisions accordingly. These include decisions on investment, marketing, sales, and other costs incurred. It is always advisable to start slow and with a sense of the market at that moment. States like Oregon, Colorado, and California have experienced wholesale stability in prices as the markets have grown.

Additionally, a resolution of the regulation and legal issues could highly impact both THC and CBD markets. The prices for smokable CBD hemp flowers may rise. Currently, cultivators have tried to balance the lapses or losses incurred from CBD hemp flower sales with high THC prices. This discrepancy can also explain how the two markets are inevitably interlinked and influence each other greatly. In an ideal scenario, if the two are legal and perhaps with lesser restrictions on growth and distribution, we may be in a better state to capture market impact and success. Such a change could also give us a chance to get an in-depth study of consumer behavior.

Bottom Line

With the current regulations in states and countries, it appears highly unlikely that the prices of the two- CBD and THC flowers will be similar. CBD prices are significantly lower and may remain so for a while.

In established markets, it is not unlikely to see wholesale costs incline towards marginal expenses incurred. That could ease the process for a lot of retailers. With efficient cultivation systems and better crops, the system gets streamlined as markets mature. The THC prices are still highly dependent on the legal hassles it has to get past. The illegal market takes a different turn, but one filled with prohibition risks despite the prices.

Many factors mediate price differences between THC and CBD. The market or the processes are hardly the beginning of the struggles. Yet, we continue to hope for better times and stable markets.

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