Ask Our Experts 07/15/2018
Q: What are the implications and big-picture potential of the emerging CBD market in the hemp and cannabis space? And where do you see the biggest/best potential for CBD companies to flourish?
A: The emerging CBD market holds major implications — valued at billions of dollars — on a wide range of industries, including hemp, cannabis, pharmaceutical, natural products, and conventional retail. We see the hemp-derived CBD market flourishing in states like Colorado and Kentucky, and the trend will continue as more states ease their restrictions on hemp cultivation. California is the leading producer of cannabis-derived CBD, while Oregon is a battleground state between hemp and cannabis.Based on the latest estimates from the Hemp Business Journal (a division of New Frontier Data), the CBD market will grow from $534 million in 2018 to nearly $2 billion by 2022, with strong growth expected in each the hemp-derived, cannabis-derived, and pharmaceutical sectors.
An increasing number of medical and public-health organizations, including the World Health Organization, have found CBD to have positive health effects with minimal risks of harm, news which helps drive greater interest in CBD among consumers while lowering concerns of social harm among lawmakers. As more governments decouple hemp from cannabis in their regulations, the amount of hemp being cultivated is increasing, providing more feedstock for CBD product manufacturers.
Looking ahead, where the CBD market expands from today will depend on how well consumers embrace CBD products, and the ways in which such products are regulated. If CBD is ultimately treated as any other nutritional supplement, it has the potential to become as ubiquitous as the vitamins and minerals commonly added to many processed foods and beverages. Under that scenario, the potential size of the CBD market cannot be overstated. However, if governments take a more restrictive view of CBD, treating it more like other tightly regulated products (e.g., drugs and alcohol), the total market would necessarily be constrained in a smaller market slower to mature, though pharmaceutical sales will nevertheless flourish.
You can find more of New Frontier Data and the Hemp Business Journal’s analysis of the CBD market in The CBD Report (available for preorder), including reviews of different CBD sources, regulatory developments, top-selling CBD brands, and the sector’s leading companies as analyzed through our exclusive Power Rankings.