The hemp market is broken, we want to fix it, ethically.

hemp supply chain

Table of Contents

Let’s start from the end:

From today, our price policy is going to change, radically. We are going to lower all prices on our premium extracts.

Now, you may wonder why we have taken such a stance on pricing?

There are 3 main reasons, let’s delve into them one at a time.

hemp supply chain

The hemp and CBD market in 2022

The time frame spanning from late 2019 to early 2020 was ripe with promise for the CBD and industrial hemp industry. Companies were popping up like mushrooms (non-psychoactive ones, of course), and you could count like 10 new start-ups showing up on LinkedIn every day, with their super-enthusiastic CEOs posting motivational hemp quotes etc.

Then Covid-19 struck the world, and just when things started to look a bit brighter (just a bit, as inflation is rising almost everywhere) the Russo-Ukrainian war broke out, and here we are, in the midst of tough times.

Of course, the hemp industry is far from immune to these events, as they definitely took a toll on the industry growth.

However, these are, so to speak, exogenous factors that don’t depend on internal mechanisms, of course we all have to cope with these factors, but they were, at large, unforeseen.

Let’s break down the endogenous mechanisms then, as these are the ones that are slowing the progress of an industry that is still poised to double its market volume in the next few years. No reason to be overly pessimistic, but there are things that need to change.

The extra-EU raw materials problem

Overall, free trade areas are a great thing, they allow the creation of an integrated market while also spurring the growth of countries that just entered a free trade agreement.

However, these considerations lose all value when new players start to play dirty. In the hemp industry, this boils down to some areas, like the EU and the US, that have strict regulations on the whole hemp supply chain.

In these countries, hemp companies need to comply with a lot of laws, rules, while also undergoing massive controls. 

On the other hand, there are other countries, extra-EU, where hemp raw materials, the building blocks of products such as CBD extracts, cosmetics, and other processed goods, are manufactured in a more “relaxed” regulatory framework.

This means that these extra-EU producers will flood the market with low-quality products, at predatory prices. On paper, this couldn’t happen, as the EU is quite strict on hemp raw materials. We know that particularly well, as we worked really hard to certify our hemp strains.

However, these strict regulations are easily circumvented by lax extra-EU regulators that label local products as compliant even if they aren’t. The other issue is back-alley agreements, where EU buyers say they are paying for a product, when in fact they are getting another one, un-regulated.

This poses a huge problem for EU hemp companies, like us. On the one hand, we are doing our best to comply with the, quite strict, EU regulations, trying to keep prices healthy to boost hemp adoption and growth, and it’s not an easy task (even though we actually found a solution, integrated supply chain, see below). 

On the other hand, there are EU companies that play dirty and source their raw materials from the above-said extra-EU producers, disrupting the industry in an unfair fashion.

This is causing much trouble in the EU hemp industry. We think we have found a solution though, it is still possible to offer healthy prices, without compromising on compliance and quality.

Let’s see how.

hemp supply chain

Integrating our supply chain while becoming more sustainable, the healthy path towards a lower price policy

 

Integrated supply chain might sound like a fancy formula yet, is much more than that. 

It means that all departments are coordinated and work in synergy. Here is a break down of the advantages of integrating our supply chain:

  • Streamline all processes in a flexible and cost-efficient way. We’re 360° inclusive, from the people we employ, up to our production model. From our hemp strain to our extracts, everything is carefully fine-tuned. An example: we use no artificial lights to grow our certified genetics, which also requires less water compared to average hemp plants.

  • The market did not have what we needed, so we made it ourselves. In the last 5 years, our breeders created 20 high-performing hemp strains. 2 of them, Enectaliana and Enectarol, are now EU certified while a third, Carmaenecta, is on its way. Extracting from proprietary strains allows us to both raise the end product quality while also trimming production costs.
  • Dramatically reduce production waste, as each part of the plant is used, transformed, and up-cycled at another stage of the manufacturing process.

  • Enforce our high quality standards in all departments. Having full control over every link in our supply chain means that we are always sure of the quality of our raw and processed materials. As no middleman is involved, production is sped up and less expensive.
  • Better comply with regulations. Because we manage all production processes, we can also monitor that they all comply with local and international regulations.

All these advantages combine to offer us yet another edge: an ethical price correction.

Enecta Farm supply chain is now more cost-efficient, thus each product is cheaper to manufacture. This means that we can now lower the prices of our premium hemp extracts, right when the market is facing hard times.

Why is our price revolution ethical?

For many reasons. As we have said above, we enhanced our production processes. But there is more.

Enecta Farm is backed by an ever-growing number of certifications, and our close partners are taking the same path. This is because we want to encourage the EU hemp industry to fight, united, against those players that are spoiling the market.

Adoption and growth can only be achieved through transparency.

In turn, transparency can only be achieved by third party certifications,

We are EIHA members for a reason. We are campaigning for hemp, daily.

Our ethical price revolution is yet another way to help the industry and have more people entering the world of cannabis.

Let’s grow together!
Want to become an Enecta Farm reseller?
Get in touch at info@enecta.farm
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