Why is CBD oil expensive?

For anyone thinking about using CBD oil, it quickly becomes clear that it is generally an expensive product to buy. There are several reasons for this, ranging 

from insufficient production levels to the cost of raw materials such as hemp seeds and the intrinsic production costs. Testing and regulatory costs will also increase the product’s final price. We will take a look at all the points and will hopefully go some way to explaining the current pricing of CBD oil. 

How is CBD produced, and how does this affect its price?

Hemp is the base element for the production of CBD. Around 400 different types of hemp seed are then categorized based on quality. A further differentiation to take into account is whether the seed is certified organic or not. At this stage, the producer’s choice of seed is directly linked to its final retail price. 

Regulation and testing

The country of origin of the seeds and the amount of regulation affecting the growth of seeds in that country also weigh heavily on retail prices. Countries such as the US and UK place heavy responsibilities on producers to ensure the product is safe for consumption. Those farmers wanting to produce organic seeds and organic hemp are subjected to testing by professional laboratories, which can be very costly, with costs being passed on to consumers. In terms of regulation, the farming of hemp for CBD production is not legal in all countries. In those countries where it is legal, there is often a requirement to obtain a license (ex. UK). The licensing acts as a significant barrier to producing greater volumes of CBD, and the raw hemp is not available in higher enough quantities. This scarcity then contributes to higher prices. 

Cost of hemp seeds

At the time of writing this post, we are seeing wide fluctuations in the price of Hemp seeds. Some of this variation is due to changes to legislation relating to the farming of hemp at the state level in the United States but Covid 19 has also seen some farmers pull out or postpone their plans to increase the cultivation of hemp. An example, the cost of seeds in the US reached 1$ a seed in 2019 but then fell and increased again by 25%. The quality of seeds, such as those certified by labs, will also command higher prices. 

The farming and harvesting of the hemp will incur additional costs dependent on local labor and maintenance costs which again can vary locally. 

Once the hemp has been harvested, the CBD can then be extracted. There are several different techniques to extract CBD from hemp, and the choice of extraction method has a direct effect on the quality of the CBD but also the price.

Carbon Dioxide extraction and potency 

This method produces some of the purest CBD on the market but is also the most expensive. These higher costs are due to the sophisticated equipment and expertise required to carry out the process successfully. The tanks, pumps, and separators that make up this equipment can cost anywhere between tens and hundreds of thousands of dollars depending on how much hemp is going to be processed.  Other extraction methods using Ethanol, Hydrocarbon, or vegetable also come with associated costs, but these are lower than those involved with the Carbon Dioxide method. CBD products with higher potency will almost always be more expensive because they obviously need more CBD. 

The type of CBD affects the price

As we have seen in previous articles, there are various types of CBD, such as Full Spectrum, Isolate, or broad spectrum. The type of CBD can also influence the price. For example, CBD that has undergone additional stages of filtering or purification, such as CBD Isolate, will normally be more expensive due to the extra purification cost. 

Market volatility

The CBD market is still young and extremely volatile regarding the cost of seeds, general growing capacity, and, therefore, the volume of hemp that can be sold to CBD producers. Prices have varied enormously, up and down, and are likely to continue to be vulnerable to the conditions mentioned above for some time to come. Our advice is always to look for quality in your choice of product, please see the guide on choosing the right CBD for you.