CBD as a Growing Market

Today, the CBD sector of the cannabis and hemp industry is a major market trend worldwide. There is huge momentum surrounding this topic which is strongly reflected in annual statistics.

The global CBD market increased from approximately $4.6 billion in 2018 to $7.1 billion in 2019. What’s more, by the end of 2020, the market size was predicted to reach $9.3 billion. The rate of this exponential growth doesn’t seem to be slowing down – it’s expected to continue through to 2024. By this time, some forecasts, such as industry analyst BDS Analytics, predict that this billion-dollar industry will expand to over $20 billion in sales!

In addition, according to a recent research report of this year, the global Industrial Hemp Market is anticipated to reach $36 billion by 2026. This would suggest a compound annual growth rate (CAGR) of roughly 34% from 2019 to 2026.

These facts and figures propose steady signs of hope and success for the CBD industry. Let’s take a look at where the market began to see just how far it’s come, covering the legality of CBD, factors influencing its growth and who’s currently taking the lead as the CBD market leader.

The Origin of CBD

CBD, known as cannabidiol, was discovered back in 1940 as a phytocannabinoid. It’s one of 113 different cannabinoids that have been found in cannabis plants and represents up to 40% of the plant’s extract. Clinical research studies have linked CBD to conditions concerning anxiety, cognition, movement disorders and pain; however, more high-quality scientific evidence is needed to support the efficacy of CBD.

CBD Legalisation

Plant medicines are now becoming more available due to a shift in legal standings. Numerous independent states in the United States have had cannabis laws in place for years for both recreational and/or medical use. In 2018, CBD from the hemp plant was officially legalized in the US, Canada and other countries following the signing of the Farm Bill, which removed hemp and hemp extracts from the Controlled Substances Act.

Laws in the US state that plants cannot contain more than 0.3% THC (tetrahydrocannabinol), which is the principal psychoactive constituent of cannabis. At the same time, this amount is limited to 0.2% in the EU. In November 2020, the Court of Justice of the European Union (CJEU) ruled that CBD doesn’t have any psychotropic effects on human health as it is not a narcotic. Hemp-derived CBD is therefore largely permitted in Europe.

This legalization of CBD is significant when it comes to boosting the market. International manufacturers of hemp-based products, particularly distributed from China, can further augment growth and open a window of new opportunities for the industry.

Factors Influencing CBD Growth

Increasing demand for CBD products

Consumers are becoming progressively aware of the potential therapeutic and wellness benefits that CBD has to offer, therefore creating a greater demand for CBD products. As reported by the World Health Organization (WHO), the demand specifically comes from CBD’s potential healing properties, good safety profile and low risk of severe side effects.

CBD-based products include oils, CBD softgels, edibles like gummies, liquids and dried cannabis. They can be consumed in several ways, such as inhaling smoke or vapour, eating edibles or drinking beverages. The healing properties of CBD can potentially be used to treat a variety of health conditions and medical disorders, including heart diseases, depression and inflammation. However, it’s always advised to consult a healthcare provider before use, who can also recommend the most suitable form of product for you.

 The CBD community is expanding

The demand for CBD products shows a clear correlation with how many consumers find CBD appealing. Society is now viewing CBD with more of an open mind, and there’s a willingness or necessity to try them. As the acceptance of cannabis-related products continues to grow, so does the CBD community.

Different segments of the market, such as medical, personal use and cosmetics, are supplying a range of CBD in varying strengths through a network of hospital pharmacies and other online and retail stores in response to the rising public demand of CBD, assisting the progression of the B2C (business-to-consumer) and B2B (business-to-business) sectors.

 Support from government regulations

Whether you prefer to take CBD oil for anxiety, pain or inflammation, overall, government regulations deem CBD to be safe and effective. This is the case for the US Food and Drug Administration (FDA) who has approved some of the purified forms of CBD products. However, the FDA is still formulating regulations for the marketing and sale of CBD for medical use or as a dietary supplement or manufactured food ingredient. There are also some stringent regulations for CBD-infused products. This, together with lockdowns being enforced during the pandemic, is likely to have slightly hindered the market growth of CBD.

Who’s The Market Leader for CBD?

The global cannabidiol market is divided into North America, Europe, Asia Pacific, the Middle East and Africa, and South America. As of 2018, the largest market share of CBD was North America, which includes the United States and Canada. This could be due to the number of Americans who are seeking relief for chronic disorders; the National Health Council implied that 40% of Americans were suffering from a chronic illness in 2014, and this number was predicted to rise to 46% by the end of 2020.

Research analysts indicate that the North American region is most likely to remain as the frontrunner to dominate the CBD market. However, Europe is quickly following behind with a 31% market share. At the moment, though, products are mostly marketed in the US. There’s a growing number of start-ups, research institutes and collaborations between companies, as well as the development of clinical trials.  

Final Thoughts

CBD has entered the marketplace in full swing. People are tapping into the potential of CBD and its exciting range of innovative products, from CBD gummies to topicals and capsules. Continuing down the path of an ever-evolving legal landscape with ongoing research in emerging industries, we’re hoping to see a surge of more regulated CBD on the market over the upcoming years.

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