CBD is one of the compounds found within the Cannabis plant that everyone's talking about.
INC. called CBD the "next gold rush." Biotech firms are using it to develop treatments for numerous illnesses, including skin conditions, epilepsy, anxiety, pain, Crohn's disease, and arthritis.
CBD is turning up in chocolate, beer, and gummies; in skincare creams and soothing sports balms; in oils, tinctures, and supplements. Even Walmart and Target are beginning to investigate incorporating it into their existing product ranges.
And Brightfield bets the market for hemp-derived CBD will grow to $22 billion by 2022.
If you've got your wits about you, chances are you've probably got your eye on the CBD market too.
What is CBD?
Derived from both the Hemp and Marijuana plants, CBD or Cannabidiol is one of the 104 compounds found within the cannabis family.
Containing only minuscule amounts of Tetrahydrocannabinol (THC) the psychoactive property found within cannabis, CBD has no effect on one's consciousness or lucidity.
Instead, CBD is extracted from the hemp plant, through CO2 or Ethanol extraction into hemp oil, which can then be made into different products.
Though this isn't any old oil; CBD has been found to assist nearly everything from PTSD, Epilepsy and Insomnia just to name a few, and the list is getting longer each day.
Thanks to the Farm Bill of 2018, cultivating and farming hemp is now legal on a federal level in the US, which has opened the floodgates for the CBD Market.
CBD can now be harvested from legal hemp plants granted its THC levels are below 0.3%.
In 2018 Brightfield estimated that the total CBD market sat at around $591 million, and is set to grow 40 times to $22 billion by 2022.
This makes CBD one of the fastest growing industries on the planet – with Baby Boomers being the primary consumers.
Reuters estimates that the US dominates with 78% of the global CBD market, while studies show that 7% of the US population reports using CBD frequently.
After the US, Europe occupies 11% of the global CBD market followed by the APAC region making up 9 percent.
As more countries jump aboard the CBD train, it's important to know the reasons why. In order to best understand the global CBD industry, we've split it up into pharmaceutical use, the wellness market, and edible CBD products.
Pharmaceutical Grade CBD
Given the infancy of the CBD market, there are many differing preconceptions as to just how useful CBD actually is.
Some see CBD as nothing more than an over-hyped fad, while others believe CBD is the magic pill.
When it comes to dispelling these myths, no industry is better positioned than pharmaceutical companies. With FDA approval comes increased consumer confidence that the validated product actually works – which is currently rare in the burgeoning cannabis industry.
So far only one CBD product has undergone the necessary clinical trials and yielded the required results to receive FDA approval.
That product is GW Pharmaceuticals 'Epidiolex' – a CBD-based medicine used treat two rare forms of epilepsy, Dravet syndrome and Lennox-Gestaut syndrome. And with the FDA recently warning companies who over-exaggerate the benefits of CBD, FDA validation could mean the difference between a business thriving and being shut down.
This is a fear GW Pharma does not have. GW sits very comfortably at the top of the pharma industry with a $3.1bn market cap, but that doesn't mean others aren't vying for the top spot.
In fact there are several companies making splashes in the CBD-Pharma pool.
CV Sciences also has an upcoming CBD product in their pipeline – a CBD-based nicotine gum which aims to assist people who wish to quit smoking.
And in terms of market size, INSYS Therapeutics Inc—a producer of pharmaceutical CBD sprays—currently sits at number two, with a market cap of $461 million, followed by Terra Tech Corp at $259 million.
Pharmaceutical grade CBD leaves little room for doubt in the minds of consumers, though it comes at a cost.
With a price tag of $32,000 on Epidiolex, many companies inevitably wonder if the same results can be achieved without undergoing years of research and trials.
This has led to the growing prevalence of the CBD wellness industry – a grey area where companies tout the benefits of the product without making any concrete claims.
CBD in Wellness
People are becoming more health-conscious than ever and are constantly looking for ways to improve their well-being. In fact, the global Wellness Market is estimated to be worth $4.2 Trillion annually.
But, there's a new face that's entering the wellness game: CBD.
Set to be a massively disruptive force in the wellness space, CBD is quickly embedding itself into creams, oils, gummies, tinctures and even tampons. The compound is said to have soothing, anti-inflammatory and anti-anxiety effects, which explains why so many companies are taking it on board.
However, it is unlikely your local wellness store has FDA approval, which means that wellness companies who espouse CBD use for therapeutic benefits must be careful about their marketing.
FDA approval can take years and billions of dollars, which is something few companies are willing to fork out. Instead, these companies are simply becoming more careful about how they portray the effects of the cannabidiol compound.
Because of the lower barrier to entry, the CBD wellness industry is growing at a staggering rate. CV Sciences' PlusCBD Oil is now being sold in 1300 health food retailers, and Cannabis company Tilray recently signed a $100 million deal with Authentic Brands Group to develop and distribute cannabis products.
Charlotte's Web is quickly becoming a household name in the CBD game with its line of CBD oils, capsules and animal products.
Marijuana Company of America has also cashed in on the power of CBD through its products under the hempSMART brand, which focuses on general health and well-being through hemp-based CBD.
"It's evident that hemp-derived CBD products are doing better and growing faster than almost every other category in the supplement industry, and it's been a long time since we've seen a supplement trend truly demonstrate demand in such an immense fashion,"
– Stuart Tomc, CV Sciences' VP of Human Nutrition.
CBD has found its way into gummies, beverages, chocolates and even in pizza as a way to ingest the compound.
While the taste of CBD is rather inconspicuous, the benefits are said to be plentiful. In fact, CBD has become so popular in food that 77% of US chefs believe CBD-infused food will be huge in 2019.
However, edible forms of CBD have raised some controversy.
Eating or drinking CBD places the compound under the category of 'Food', which opens it up to FDA regulations more strenuous than any topical cream or bath bomb.
In New York, certain stores have been asked to stop selling CBD-infused foods, and as of June 1st restaurants in New York will be fined if they are found to have CBD products for sale.
Though this hasn't stopped CBD-infused products from sweeping the market, with CBD beverages set to become a $260m industry in the US alone over the next 4 years.
Corona and Constellation Brands are increasing their buy-in to Canopy Growth, and even Coca Cola wants in on the CBD action.
Because there are such big players already operating in the CBD beverage space, Canaccord Genuity projects that CBD beverages will comprise 20% of all marijuana edibles sold in the next 3 years.
And it's not just human food either. Advocates such as Martha Stewart have joined the rush by partnering with Canopy Growth Corp to bring about a range of CBD pet treats.
CBD is appearing in clinical trials for an almost endless list of ailments as well as being taken by a growing portion of the wellness community as a preventative measure.
And when it comes to food, CB may soon sit alongside salt and pepper as a staple in any meal.
And let's not forget all this is happening despite the FDA labeling CBD in food as an "illegal food ingredient."
One can only imagine how prevalent CBD will be once legislation eases up.
In fact, the uncertain legal status of CBD seems to be the only factor slowing the compound down.
In almost any industry it enters, CBD is making huge waves – and we don't think this is just a passing phase.
CBD is here to say, and we're very excited for what the next few years have in store.
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