Whilst the cannabis industry has exploded over recent years, so too has the market for cannabidiol (CBD), the non-psychoactive cannabinoid that is prevalent in hemp.
Proving that the demand for cannabis products is not just centred on the mind-altering effects of THC, the rapidly growing CBD industry is going from strength-to-strength thanks to CBD’s wide range of medical benefits and the fact that hemp-derived CBD is legal across much of the world, including the U.S. This has seen industry parallel the larger cannabis market, with considerable growth forecast for the coming years.
From almost nothing, in 2015, the market for consumer sales of hemp-derived CBD products grew to a cool $90 million. Add to that another $112 million in marijuana-derived CBD products, which were sold legally through dispensaries, and you have a total CBD market of $202 million in 2015.
In 2016, the total retail value of hemp products sold in the U.S. reached $688 million. Hemp-derived CBD products are estimated to contribute up to $130 million of that figure.
Now, a recent report by the Hemp Business Journal predicts that the CBD consumer market will grow to $2.1 billion by 2020, with $450 million of those sales coming from hemp-based sources. Some experts have even higher expectations the CBD market, such as Matt Karnes of Greenwave Advisors, who predicts the CBD market size to reach almost $3 billion by 2021.
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One of the market leaders in the CBD field is Medical Marijuana Inc., who has revealed said that their retail hemp-derived CBD sales jumped from $3.4 million in 2013 to $65 million in 2015. Due to an influx of competition and price drops during 2015 and 2016, sales dropped to nearly $10 million last year. However, with monthly sales more than $800,000, as reported by Forbes last year, and growth pretty much a certainty, the company is still prospering.
HempMeds is another one of the big players in the industry, with sales in excess of $14 million in 2014, its first full year of operations. Again, an increase in competition hurt sales the following year, but nearly $8 million was still achieved in 2015 and 2016.
Founded in 2014, Elixinol, has quickly become one of the most well-known brands in the industry. In 2015, their first full year of operations, Elixinol had about $2 million in sales, with that figure doubling to almost $4 million the following year.
And demand is not limited to the U.S., with a number of companies reporting huge demand from overseas. HempMeds, mentioned above, has even gone so far as to launch subsidiaries in Brazil and Mexico, with Paraguay soon to follow.
U.S law prohibiting the growing of hemp means that many American suppliers have to source their raw material from abroad, largely from Europe – where industrial hemp is legal to grow provided it is from EU-certified seeds and does not exceed 0.2% THC levels – as well as Canada and China.
The global medical cannabis market
According to a report published by Grand View Research, the global medical cannabis market is expected to grow from $11.4 billion in 2015 to a staggering $55.8 billion by 2025. The report goes on to claim that the huge growth will be a result of the relaxation and outright abolishment of cannabis laws around the world. If the CBD market flourishes as many expect it to, CBD will play a very important part in this overall market expansion.
While there have been many stumbling blocks for the CBD market to overcome, an increase in mainstream attention and the relaxation of laws around the world are seeing research on CBD being stepped up. This will lead to more knowledge of its uses and benefits, with consumers benefitting from an overall clearer understanding.
Along with scientific exploration into CBD, a boom in popularity and use of other cannabinoids is expected by many within the industry. There are currently 144 cannabinoids known to science, with many showing therapeutic promise. This means the scope of the cannabinoid market in general – not just the CBD market – is vast.
Expect the furore around CBD to be extended to numerous other cannabinoids such as CBN and CBG in the near future. Who knows what direction the market will take, or what research will uncover, but there is little doubt that many more innovative cannabinoid products are set to explode onto the scene.[Image credit- Wikimedia.Commons]