CBD, or cannabinol, is one of the non-psychoactive compounds (meaning it won’t get you ‘high’ or leave you feeling intoxicated) found in both marijuana and hemp plants.
CBD has been credited with many therapeutic properties, including pain relief, the ability to mitigate the symptoms of anxiety disorders and depression, and even anti-ageing properties. Most importantly, because CBD is not psychoactive, it is not subject to the same stigma as other cannabis-related ‘medicines’, and its sale is quickly being legalized in many countries across the world. Currently, most CBD business sell CBD products in oil/tincture form, although it’s also increasingly being infused into household products like coffee, lipstick, and dog treats, as well as bootleg cartridges for e-cigarettes.
Most of the statistical forecasts for the CBD industry come from the US. Although notoriously ‘tough on drugs’ (with many citizens being jailed for life for multiple small offences related to marijuana). The US seems to be embracing CBD with little hesitation; A 2018 Farm Bill removed hemp from the list of controlled substances at a federal level, and later that year investment research firm Cowen estimated retail sales of CBD consumer products in the US at between $600 million and $2 billion. Cowen expects the US industry to grow to be worth more than $16 billion by 2024; the even more bullish Brightfield and Hemp Business Journal expect the US industry to be worth $22 billion by 2022, predicting that more than 10% of US citizens will be regularly using CBD products in just a few years.
If that seems hard to believe, remember that health and wellness products are only part of the picture; CBD is also quickly making its way into food, beverage, beauty, pet care and vaping products.
BDS Analytics and Arcview Market Research are a little more conservative than Brightfield and the Hemp Business Journal, predicting the US CBD industry won’t break the $20 billion mark until 2024; but their detailed research suggests the CBD industry has real lasting potential, and won’t just be a trendy flash-in-a-pan. Like Brightfield, they expect the vast majority of CBD products to be soon sold through general retail stores, not licensed dispensaries; this points to the growing acceptance of CBD products in the US among people who might have previously considered CBD products ‘illicit drugs’.
The BDS Analytics report also showed that CBD product sales in dispensaries since 2014 have grown at a faster rate than overall sales in dispensaries, suggesting more consumers are seeking out just CBD products with no THC; it also found that CBD customers, on average, are 40 years old, have completed higher education, and are more likely than non-CBD users to be employed full time. These aren’t teenagers or college students seeking a ‘buzz’ – most of the market for CBD products is coming from older, educated customers seeking natural alternatives to conventional prescription drugs.
What does that mean the future of the industry? For one thing, it makes it hard to stigmatise users as ‘stoners’ or vulnerable young people taking advantage of loopholes to get their hands on ‘legal weed’ – the typical user is actually a quiet middle-aged person who may already have tried several conventional medicines for their chronic pain, anxiety or depression with limited success. It also means the wealthiest Americans – not cash-starved millennials, but successful Gen-Xers and baby boomers with plenty of money to spend on their health – are the main market demographic attracted to CBD products.
If this holds true outside of the US, you can expect the industry in countries where CBD products are legal – in Europe and the UK, for example, where CBD products containing less than 0.2% THC are allowed for retail sale – to see the same ‘gold rush’ mentality US producers are currently experiencing, with more and more companies trying to get into the hugely profitable game (Marijuana Company of America, a relative newcomer to the US CBD market, reported first-quarter 2019 results with gross profit margins of 63.4%, just one example of the money to be made from CBD).
What can stop the CBD boom? A shortage of plants is one of the most worrying threats for established companies; with hemp only recently made legal across the US and many parts of Europe, it’s difficult to grow enough plants to satisfy the current boom in demand. Another problem is the public health crisis affecting even healthy, young people who ‘vape’ in the USA, with the death toll rising steadily through August and September 2019 and no solution in sight; the only thing health officials can agree on is that the hundreds of people sick (and dying) with mysterious vaping-related lung illnesses almost all used unlicensed, ‘bootleg’ custom vape cartridges, filled with various ingredients (THC, CBD, nicotine and various oils) which were not regulated whatsoever – and if the deaths continue, it’s not outlandish to suggest that the US will issue a crackdown on all possible causes of the epidemic while they search for answers.
Such an action could have a chilling effect on potential consumers of CBD both in the US and abroad; the main selling point of CBD-related products so far has been their relative safety compared to other options. If CBD turns out to be even tangentially related to the spate of severe lung injuries and vaping-related deaths in the US, its reputation as a mostly harmless heath product could be damaged irreparably.
Overall, there’s no denying that the future of the CBD business looks extremely bright – so long as regulatory measures stay relatively loose, and wider use of CBD doesn’t result in more case reports of illness, injury or death caused by CBD products. For now, the outlook on CBD companies remains bullish, and hundreds of new entrepreneurs are trying to enter the industry each month; the humble hemp plant could be the equivalent of a gold mine for today’s smart investors and business owners.