A recent annual trend report published in The Economist depicts 2019 as the year of eye catching rises of new exciting trends, and one of the trends predicted to take off this year will be the legal cannabis market that is expected to grow by 40% to nearly $20 Billion, thanks to the changing laws in Canada and parts of America.
Prospects for the CBD market continue to look bright as calculated approximates, according to Forbes, are projecting the cannabidiol market to grow by a whopping 700% by the year 2020, which is a sky-high jump in value compared to the CBD market in 2018 of merely $202 million.
As the market continues to expand, it is anticipated the CBD industry will achieve the billion-dollar status as product diversification and consumer demand boost the revenue levels.
One of the major driving forces behind the cannabidiol market is the ever-increasing number of health benefits found in CBD oil. CBD oils, tinctures and ointments are believed to hold many benefits and are said to provide effective cure for treating various ailments of the human body.
In just over a few years, the demand for CBD oil has increased exponentially in different parts of the world due to the growing understanding of the health benefits alone.
In contrast to the 89 Million acres of soybean in the U.S., the CBD industry seems quite skimpy at 25,000 acres, but analysts are expecting all that to change very quickly now that the 2018 farm bill has been signed by President Donald Trump.
This is because after many decades of significant restrictions at state and federal level, cannabis has now been removed from the list of controlled substance and reclassified as an agricultural product, which a budding industry has its eyes on.
More than half the states in the U.S have allowed farmers to grow marijuana, such as Indiana, Missouri and Illinois. And the total acreage nationwide has increased more than 500% between in just 2 years by 2017.
36-year-old Kristen Kunau grows an acre with her husband in Colorado where hemp was legalized in 2013. A noticeable thing to see here in December is the jar of dark and thick oil that sits in the refrigerator.
This is cannabidiol or CBD oil that is derived from hemp plants. This is a close relative of marijuana, but contains very little THC, less than 0.3% according to the recent federal guidelines, which basically means consuming hemp CBD won’t give the sensation of being high.
CBD has become progressively trendier for its supposed benefits to overall health of a person. Manas, a mother of two teenagers, said that she has discovered at least a dozen home remedies. “I make everything using CBD including coconut butter, CBD sunblock, lotion, diaper rash cream, etc.” she said.
Hemp is often touted for its numerous practical applications, such as livestock feed, car parts and plastics. Despite the vast ranging resourcefulness, some analysts estimate that around 70% of the hemp crop in the U.S is produced for CBD.
Until now, CBD represented a modest market of $600 Million, but the landscape is about to change very soon now that it’s legal in all 50 states. Jamie Schau, who is a Brightfield Group senior research analyst, predicts the market to grow tenfold in 2019.
According to her, as the federal approval gives the industry a big boost, consumers are already clamoring for CBD, drawn in by its purported healing powers. And the remarkable fact about CBD market is that it has grown entirely from a grassroots level since there has been no formal advertising in this aspect.
CBD is being utilized in possibly everything; from ointments to beverages, edibles, makeup and dog treats. Its applications are only limited by the imagination. But since these items surrounded a legal loophole (permitted under the 2014 farm bill while still banned in the eyes of the Drug Enforcement Administration), most retailers felt hesitant in selling such products.
Now, companies like Coca-Cola are expressing bubbling interest in CBD, while many suspect that Marlboro may decide to make a shift towards CBD products in the near future. And while different estimates vary on how big the hemp CBD market will grow in the coming years, Brightfield believes it to reach $22 Billion by the year 2022.
Keeping Up With the Times
A quick Google search will show dozens of ailments and health conditions that manufacturers and sellers claim CBD can offer an effective treatment. Chronic pain, arthritis, anxiety, depression and insomnia are among such.
Esther Blessing is a psychiatry professor at New York University, and she admits such medical assertions make her cringe. “We don’t know that. We don’t have the clinical research to claim that,” she said.
Blessing is presently involved in a research aimed at examining the effects of CBD over the symptoms of alcohol use and PTSD. The FDA has lately approved a medication that utilizes CBD for treating a form of epilepsy. But this is it so far.
Being a scientist, she believes that CBD offers the most promising medication that has come along in the last 5 decades or so, but she said all the hype seems to have gotten a bit ahead of the clinical testing.
“The reason for my enthusiasm comes from other forms of evidence, such as studies conducted on animal models, or brief clinical trials that offer us a peek at how CBD actually works,” she said.
She said it’s mighty possible that CBD may actually effectively treat many health issues and conditions such as substance abuse and schizophrenia. And until this happens, she hopes the new law will result in more funding for the needed research.
Other Growth Drivers
The federal legalization of cannabis is not the only aspect driving such remarkable growth in the hemp CBD industry. According to Brightfield, additional growth drivers would involve:
- Bigger investment opportunities.
- Overall popularity of hemp CBD as compared to the pharmaceutical items as health trends continue.
- The development and progression of distribution system.
- Further expansion driven by diversifying product types and continued innovation.
“New consumers are being welcomed by a blast of new items and innovations that can be bought from many different types of retailers,” said Gomez. “When we studied the market a year ago, it was mostly tinctures being sold online or via smoke shops. Now there is noticeably such a wide range of new products from CBD soaps and face masks to CBD joints, pet treats, bug repellents, lemon water and fruit roll-ups.
“Organic food stores can’t keep it on the shelves and CBD is now found at gyms, massage spas, and is available via a network of direct sellers. But the real growth on a larger scale will come in the next five years through mass market sellers.”
Gomez said that so far, big retailers such as Walmart, 7-Eleven, Target and Whole Foods have been patiently waiting for the federal approval to carry CBD products. “But once the law is passed and CBD products become fair game, then this will open up the market and change the industry virtually overnight.”