If you’re going to spend so much time and effort on your hemp crop, you’ll want to make sure you sell your biomass for the highest price possible. But when you’re just starting out, you might not know how to find buyers, negotiate deals, or handle the legal details of a sale. Do you sell directly to a buyer, or will you need the services of a hemp broker? We’ll answer that and all your other burning questions in this article.
Just so we’re on the same page, we’re going to discuss ways to sell CBD-containing biomass rather than hemp for industrial purposes. We’re talking about the terpene and cannabinoid-rich material traditional cannabis growers call “trim.”
Pricing Your Hemp Biomass
Before we get into the best ways to sell your hemp biomass, you’ll need to understand how to determine what it’s worth on the market. Several factors affect the price of CBD biomass, such as:
- Potency: Your buyer will want to know how much CBD and other cannabinoids your biomass contains. Hemp biomass with less than 10% CBD will fetch a much lower price than more concentrated material.
- Makeup: Biomass with more flower trim is worth more than leafy material.
- Dryness: Since prices are based on dry weight, buyers will expect your biomass to be at least 80% dry.
- Market Value: Average hemp biomass prices fluctuate considerably, so you need to keep an eye on the current market values to determine your pricing.
- Genetics: Investing in high-quality seeds and popular strains can significantly increase the value of your hemp biomass.
- Harvesting Methods: Hand-harvested plants usually contain up to 5% more CBD and will command higher prices than their machine-harvested counterparts.
- Lab-testing: Contaminants like mold, pesticides, and heavy metals will lower the value of your hemp biomass or render your material completely unsellable. USDA regulations require farmers to test their hemp at least 15 days before harvest. If your hemp contains greater than .3% delta-9 THC, you will be forced to destroy your entire crop. Finding a buyer for non-compliant hemp is both difficult and illegal.
Now that you have a better idea of what your material is worth, let’s take a look at the 5 ways to sell your hemp biomass for the best price.
Deal Directly with the Buyer.
More experienced farmers with business savvy often choose to deal with companies that buy CBD-rich hemp biomass to make extractions. Dealing directly with the buyer can get you the highest price per pound, but you’ll need to know where to find them and how to negotiate and close a deal. New farmers can begin making hemp industry connections through social media sites like LinkedIn and Instagram. Another way to meet potential buyers is through attending hemp expos and other industry events.
Pros for Dealing Directly with a Buyer:
- You won’t have to pay a broker’s commission.
- You’ll make more connections in the industry.
- You’ll learn more about the business side of hemp farming.
Cons of Selling Hemp Biomass Directly:
- Selling directly to buyers requires connections in the hemp industry.
- Buyers may be hesitant to purchase hemp biomass from new farmers.
- You’ll need excellent negotiating skills to get the best price for your hemp biomass.
- Tasks like finding the right buyer, negotiating, closing the deal, and handling paperwork are time-consuming and potentially stressful.
Sell Your Hemp Biomass Through a Broker.
Selling through a broker makes sense for new farmers who may not have many connections in the hemp industry. Additionally, brokers will take the pressure off of you by handling negotiations. Before you hire a broker, you’ll need to do a background check to make sure they have a proven track record with satisfied parties on both sides of the deals they make.
Let’s examine the advantages and drawbacks of selling hemp biomass through a broker.
Pros for Hiring a Broker:
- Reputable brokers have reliable connections in the industry.
- Experienced brokers will help you determine the value of your hemp biomass.
- Seasoned brokers are expert negotiators who may get a better price than you could.
- Brokers will handle the paperwork and most of the legal details for you.
- Hiring a broker will leave you with more free time to work on your farm.
Cons of Selling Hemp Biomass Through a Broker:
- A broker will take at least a 10% commission for each sale.
- Some brokers may be in a hurry to earn a commission and may not fight to get you the best price possible.
- A new broker may not have much more experience or many more contacts than you do.
- A broker may have a bad reputation in the hemp industry.
- Novice brokers may promise more than they can deliver.
Negotiate a Futures Contract.
Futures contracts are agreements that allow you to sell your hemp biomass before it’s been harvested or even planted in some cases. The buyer will agree to pay a set price per pound of hemp biomass when your crop has been harvested.
Pros of Futures Contracts:
- You’ll be able to concentrate on your farm since your biomass is already sold.
- You won’t be competing with other farmers during harvest time.
- You can lock in a better deal before prices fall when the market is saturated.
Futures Contracts Cons:
- Unforeseen circumstances may leave you unable to fulfill your contract.
- Disreputable buyers may not honor the agreement, and you won’t get paid.
- You may have to pay for the services of a lawyer to handle the details of the contract and ensure payment.
Create a Profit-Sharing Agreement.
Signing a profit-sharing agreement with a biomass buyer can help new farmers manage start-up costs. In this type of arrangement, an investor pays upfront for seeds, equipment, and other expenses in exchange for a percentage of the final profit from your harvest.
Pros of Profit-Sharing Agreements:
- Profit-sharing agreements will provide you with quick cash to get your hemp farm rolling.
- Enlisting an outside investor will allow you to establish a more extensive operation than using your own money would.
Cons of Profit-Sharing Deals:
- It may be challenging to find an investor willing to sign a profit-sharing contract.
- You may need to pay for legal counsel when drafting the agreement.
Sell Your Biomass Through an Online Hemp Exchange.
Companies like the Hemp CBD Exchange give hemp farmers the best of both worlds. Exchanges allow you to connect with pre-vetted hemp biomass buyers and reputable brokers from the comfort of your own home.
Pros of Selling Through an Online Exchange:
- Hemp exchanges verify each participant on their sites, lowering your risk.
- Hemp exchanges simplify the process of making valuable contacts in the industry.
- Online exchanges like Hemp CBD Exchange offer free classified listings for qualified hemp farmers.
- Some hemp exchanges provide FDIC-insured banking solutions.
- Hemp exchanges reduce or eliminate your chances of getting scammed by one of the many charlatans infiltering today’s hemp industry.
- Some hemp exchanges offer perks like shipment insurance and white-glove service.
- Hemp exchanges simplify negotiations and ensure that you get paid for your hard-earned crop.
- Many exchanges will handle the pickup and delivery of your biomass.
Cons of Using a Hemp Exchange:
- There aren’t many drawbacks to selling through an exchange.
In a market where new players emerge every day, you need to be careful when you sell your hemp biomass. Vetted online services like Hemp CBD Exchange help make the process easier and reduce your risk. If you have any questions about creating a free listing in our classified section, please contact us at firstname.lastname@example.org.
Zach is the founder of HempCBDExchange.com. Amateur writer. Social media ninja. Travelaholic. Passionate about all things cannabis & hemp.