The Hemp Supply Chain: 5 Key Elements You Need to Master

The Hemp Supply Chain: 5 Key Elements You Need to Master 

Behind every industry is an intricate network or supply chain that’s ultimately responsible for its success – or failure. Despite being fairly new, the hemp industry is quickly working out its kinks to become a smooth operating and profitable market.  One factor that’s supporting its overall growth? The hemp supply...

Behind every industry is an intricate network or supply chain that’s ultimately responsible for its success – or failure. Despite being fairly new, the hemp industry is quickly working out its kinks to become a smooth operating and profitable market. 

One factor that’s supporting its overall growth? The hemp supply chain and the leading players who are keeping it on track. 

So, if you’re just trying to figure out the hemp supply chain for your new business or looking to improve an already existing business – you’re in the right place.  In this guide, we’ll cover 5 key elements to master for optimal success, the current state of industry, and the overall benefits of establishing a reliable hemp supply chain.

Table of Contents

The Current Hemp Industry: Business is Booming

The hemp supply chain industry is booming

Since the 2018 Farm Bill legalized the production and sale of hemp, business has been booming. In 2023, the global industrial hemp market size was estimated at $5.49 billion and forecasted to grow at a compound annual growth rate (CAGR) of 17.5% from 2024 to 2030.

Now, when it comes to the consumer side of hemp and its highest-selling product, the hemp CBD industry is booming, too. In 2020, total U.S. consumer spending reached $3.83 billion and is projected to grow at a CAGR of 12.16%, reaching $6.26 billion by 2025.  

But hemp isn’t just responsible for fueling the CBD market; it is also responsible for the emerging markets of other minor cannabinoids produced naturally by the plant, including – 

  • Delta-9 THC
  • Delta-8 THC
  • THCA
  • Amongst others

These hemp commodities are now widely available in-stores, and online, posing a plethora of opportunities. As for challenges, hemp is highly labor intensive, and quality can vary greatly from source to source, complicating wholesale capabilities. 

The Hemp Supply Chain: Why it Matters to Your Business

The hemp supply chain importance to your business

First and foremost, a supply chain is defined as “the sequence of processes involved in the production and distribution of a commodity.” 

As you may know, the history of legal hemp in the United States is complicated and ever-evolving. Due to the complex legalities and regulations surrounding hemp, the processes involved in its production and distribution are that much more important. 

In addition to trusting each partner involved in every step of your hemp supply chain, it’s equally important to understand each step of the process yourself. That means knowing the ins and outs of growing and processing it legally and ensuring its credentialed testing for consumer safety. 

Last but not least, the hemp supply chain matters to your hemp business’ due to its affect on its profitability. Sourcing quality hemp and distributing and selling it legally is crucial for your bottom line. 

5 Key Elements of the Hemp Supply Chain to Master

Now that you have a better understanding of the current state of hemp and the importance of the hemp supply chain, let’s get into how to cultivate your own success. If you want to join the ranks of hemp industry leaders, here are 5 key elements to master for your own hemp supply chain.

the hemp supply chain key elements
  1. Cultivation 

Your end-product can only be as good as your source product when it comes to hemp (quality in, quality out). The most important element of your hemp supply chain is sourcing quality flower that’s cultivated with rigorous regulations and processes. 

  1. Storage 

Due to the delicate nature of precious cannabinoids and hemp extracts, the storage of the flower pre- and post- processing is of utmost importance. Cannabinoids, that provide hemp’s effects, and terpenes, that add to effects and aroma, both degrade with heat, light, and air, affecting overall quality for the end-consumer. 

  1. Logistics 

Again, with storage and the delicate nature of hemp extracts, your hemp supply chain must consider logistics. Schedules must be adhered to closely to ensure harvesting, storing, transporting, and processing are all done in an optimal and timely manner. 

  1. Processing 

The extraction of the hemp plant’s most precious oils can be executed with various methods and varying pieces of equipment. Not only do the types of extraction methods matter, but those operating and overseeing the extraction do, too. That means finding a qualified and experienced processor is crucial to the quality and retail price of the end-product. 

  1. Variety of Customers 

Due to hemp’s versatility, there’s a wide variety of B2C and B2B customers your hemp business can reach. By streamlining your hemp supply chain and partnering with quality vendors, you can do so more effectively and cost-efficiently. 

Hemp Processing : The Secret Sauce to Success

A common phrase in the industry is quality in, quality out. However, it’s not just the quality of the hemp flower you’ll be extracting that matters. It’s the quality of processing and extraction that’ll make a difference, too. 

To boost the success of your hemp supply chain, it’s crucial to find a highly qualified and credentialed extractor. The more skilled your extractor is, the higher the quality of your product can be. The higher the quality of your product, the higher the price point it will capture. 

More importantly, qualified extractors offer hemp businesses peace of mind when it comes to legalities. That includes strict facility guidelines, compliance with regulations, accurate dosing, and trusted third-party testing. 

Last but not least, skilled extractors are often ahead of consumer trends with their techniques, giving your business the advantage of launching cutting edge products. 

Industrial Hemp vs. Hemp CBD – What’s the Difference?

Infographic with the difference between industrial hemp and hemp CBD

Two terms that are prominent in the hemp supply chain are industrial hemp and hemp CBD. To understand them both, here are some of the biggest differences you need to know – 

Basically, because hemp CBD is being consumed for medicinal purposes and industrial hemp is being cultivated for its fibers, they’re subject to varying regulations and processes for quality. 

Hemp CBD’s supply chain and processes are much more intensive, hence its higher cost to execute. Since industrial hemp isn’t being consumed by humans, it’s supply chain and processes are less extensive and less expensive to execute. 

Understanding The Hemp Supply Chain: 5 Benefits

Now that you understand the hemp supply chain, you can put your knowledge to good use for your hemp business. Keep in mind that the more you know, the more you can improve your business in regards to: 

  • Legal compliance
  • Quality control, 
  • Efficient operations
  • Risk management
  • Market positioning

Fine-tuning your hemp supply chain to serve customers with reliable strain consistency, quality products, and safe consumption is of utmost importance for overall success. 

We know this at Elevated Trading because we’re a wholesale business built by wholesalers. That’s why it’s our mission to eliminate common frustrations among hemp business owners and breathe professionalism back into the industry. 
Elevate your hemp supply chain by partnering with Elevated Trading. Browse our specially curated catalog of premium hemp products that are designed to bring a significant profit margin to your bottom line.

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