Why is CBD so expensive?

Those who have been looking to buy CBD may have thought to themselves: why is CBD so expensive?

This fact might even push some people to buy some low-grade cheaper options, especially if they don’t understand the reasoning behind the high prices of CBD.

Below, we’ll dive deeper into 5 of the reasons why CBD is expensive. Hopefully, by the end of this article, you’ll be capable of making more informed decisions when purchasing these products.

1. Hemp is difficult to grow

The first aspect that drives CBD prices up is the farming of hemp itself. While many experienced farmers are now changing their crops to hemp farming, the reality is that this change isn’t easy nor cheap.

There is a lot of manual work involved in the farming of hemp. Moreover, because there are limits to the amount of THC allowed, it also requires a great deal of inspection. For instance, in case the hemp plants demonstrate to have higher contents of THC, the whole crop must be destroyed.

But the expenses of hemp farming don’t stop there:

• Farmers require specific tools for the harvesting of hemp, and if they were farming other crops before they might not have these machines
• Some farmers can’t afford such machinery, which in turn increases the time of harvesting as it must be done manually
• Before being ready for the next steps in the production, the hemp plants must be dried as well, which requires large and sheltered conditions
  

2. The extraction and refinement of cannabinoids isn’t easy

Another big reason why CBD prices are high is related to the extraction of CBD itself. 

These processes require advanced technology and expensive machinery. The most common extraction method used for industrial CBD requires supercritical carbon dioxide. Although this is the most precise, safe, and environmentally friendly option available, it also requires:

• Very expensive equipment
• Highly skilled workers

Once this extraction is processed, producers have full-spectrum CBD extract. As you may know, there are also broad-spectrum and CBD isolate products, which means that further refinery is necessary. All these steps cost money, which quickly adds up.

3. It requires major investment

While we already mentioned the initial investment needed for the adaptation of crop farming to hemp farming, as well as the money required for extraction processes, there are even more hidden costs.

It’s important to understand premium companies don’t just extract the CBD and sell it as it is. Many reputable companies have their own research centers where they test and experiment with new formulas. They also follow the current high standards of production, quality control, and testing.

Just like it happens with the extraction and refinery, all the processes mentioned above require:

• Highly educated and experienced laboratory technicians
• Sophisticated equipment
• Renowned third-party partners for testing

Although not all companies perform these activities in-house, they must hire reputable partners to complete these steps. At the end of the day, both options are highly costly.

4. There is currently more demand than supply

CBD products are at an all-time high in terms of popularity. Not only because the information about this compound is becoming more widespread, but also because many countries are changing their legislation on the topic.

Over the past years, several countries legalized in one form or another the production and retail of CBD products. This means that not only can producers sell these products legally, but people are also able to have access to a wider number of safe options.

As such, with this surge in the demand for more CBD products, the prices went up. This happens with any type of product, it’s just the law of supply and demand.

Paired with the difficulty of hemp farming and the lengthy extraction and production processes, it will still take some time for this aspect to start becoming less noticeable.

5. Many financial institutions don’t cater to CBD producers

We know that you probably had some idea about the aspects mentioned above, however, one factor that drives up the prices that is often forgotten is the challenges CBD producers face with financial institutions.

It’s a known fact that banks have been more careful than usual since the past economic crisis we all faced, but CBD manufacturers are still some of the most refused entities by financial institutions.

While in some countries banks are more lenient in accepting payments related to the cannabis industry, in many others it’s still seen as an unsafe and risky business. More often than not, CBD producers are put on the same list as gambling and pornography.

Due to this, CBD companies have to spend extra time and resources searching for banking and financial options. Over time, it all contributes to the high costs of the final products.

Conclusion: When will CBD be cheaper?

The 5 reasons mentioned above are just a small part of the difficulties CBD farmers and producers face. Although these are the main financial hurdles they have to go through, there are plenty more.

We believe that within a few years, the overall prices of CBD will be lower. Not because there will be less demand from the public, but because more and more countries will legalize these products and there will consequently be an increase in supply.

Nevertheless, the basic costs with operations will remain the same. Because of this, we expect that although prices might become a bit more affordable, they won’t be much lower than we are experiencing now.