July 21, 2022 PAO-01-22-CL-05
For example, the industrial cultivation of hemp was federally legalized in the 2018 Farm Bill. Thus, a new market was born with the stroke of a pen in Washington D.C. The booming CBD products market, made possible by hemp legalization, offers an incredible assortment of items, from specialty shops to local drug stores.
Given the aggressive current and future market growth, the sale of new growing and extraction equipment will continue its upward trajectory. However, five key trends have created the conditions for used hemp processing equipment to play an essential role in the industry’s growth.
As hemp, CBD, and related products become mainstream, the market will see a barrage of new product formats. Oils, beauty and skincare products, beverages, gummies, chocolates, pet products, capsules, and many other product formats are either on the market or in development. For example, infused hard seltzers might appeal to more trend-conscious consumers, whereas capsules and tablets formed from CBD powderized oil might appeal to more conservative consumers.
The market will increasingly resemble the fashion industry, where trends come and go, sometimes rapidly. These opportunities require processors to be agile to capitalize on market opportunities. Different processing equipment is typically needed to manufacture these new products as trends emerge and dissipate.
Used hemp processing equipment, as well as used food, beverage, and consumer product processing equipment, are well suited to helping manufacturers meet the moment. Used industrial equipment can be online in days rather than months and typically cost half to a third of the cost of new equipment. As a result, manufacturers can rapidly and cost-effectively respond to market trends while reducing their exposure if the market changes direction.
The COVID-19 pandemic has disrupted and will continue to disrupt supply chains. Equipment manufactured in the U.S. includes components from China and other global markets. Although there is an inventory of new growing and extraction equipment, that inventory is often not suitable to meet market demands.
Rather than the 6–18 month or longer lead time for new equipment, used manufacturing equipment can be online in days. So, for processors looking to expand capacity, increase capabilities, or face the sudden need to replace a piece of equipment for operational continuity, used equipment is an excellent option.
However, specific types of used equipment are sometimes challenging to find. As a result, hemp, CBD, and other processors turn to Federal Equipment Company’s extensive knowledge, experience, and connections for help with sourcing the growing and extraction equipment they need.
Large and small processors alike have realized that they need to control their entire value chains—growing, extraction, processing, and packaging — to succeed in today’s market.
The move toward vertical integration has created the need for processors to develop a strategic procurement strategy to acquire ranging types of growing and extraction equipment. Used equipment plays an increasingly important role because it can be available immediately at costs much lower than new equipment.
Many entrepreneurs in the space have launched their businesses without a comprehensive strategy or thorough knowledge of appropriate manufacturing processes. In addition, some entrepreneurs buy growing and extraction equipment without fully understanding their needs, such as required ancillary equipment like filtration systems.
Additionally, all too many entrepreneurs buy equipment before realizing that their manufacturing plant is not even zoned to have a given piece of equipment or processing line in the building.
The hemp, CBD, and related markets are still very young, and many are still learning. As a result, new equipment commonly enters the used equipment market.
Numerous small craft processors have taken off. However, while growth is exciting, it comes with its own challenges. Often, processes that worked well for small-batch operations do not work well or at all for large-batch operations.
Transforming process operations to support growth nearly always requires new processing equipment. Periods of rapid growth are incredible but also typically strain resources. Including used equipment in their procurement strategy allows hemp, CBD, and related processors to secure the equipment they need at a substantially lower price, freeing budgets to fund other aspects of their growth journey.
The growth, change, and maturation of CBD, hemp, and related processing operations nearly always require additional or different processing equipment. Disrupted supply chains, increasing lead times for new equipment, and the need to capitalize on opportunities within a rapidly changing market have led many processors to incorporate used equipment into their equipment procurement strategies.
Given its dedication to honesty, transparency, and putting its customers’ needs first, processors frequently turn to the experts at Federal Equipment Company.
To learn more about how Federal Equipment Company can help, visit our used growing and extraction equipment page.
Additionally, please contact us if you want to sell used industrial equipment. Finally, for additional preowned growing and extraction equipment currently available, visit Green Sky Equipment—the growing and extraction equipment marketplace.
Jim Coyne started his role in Business Development at Federal Equipment Company in 2013 and is involved with the buying and selling of surplus equipment. Before joining the team at Federal Equipment Company, Jim handled the sale of surplus assets for Fortune 500 companies. Mr. Coyne has earned bachelor degrees in Political Science and History with honors from the University of Dayton.