The cannabidiol (CBD) market could potentially reach $2 billion by 2020. Estimations of the size of the market are continuously increasing as optimistic views are growing. With new technology, innovation, and business activity, the CBD market has the opportunity to reach outstanding numbers in the near future. Opportunities should be seized, businesses should be created, and further investment is a smart move for people looking to increase their input in the CBD market.
Cannabidiol (CBD) is the part of the cannabis plant that doesn’t get you “high” like the THC side of the plant. It is typically used for health reasons instead of for recreational purposes. The CBD products are either derived from industrial hemp plants or marijuana plants.
The Hemp Business Journal estimated that the CBD market will grow to a $2.1 billion market in consumer sales by 2020 with $450 million of those sales coming from hemp-based sources. That’s a 700% increase from 2016. In 2015, the market for consumer sales of hemp-derived CBD products was $90 million, plus another $112 million in marijuana-derived CBD products which were sold through dispensaries – bringing a total CBD market to $202 million last year.
Matt Karnes of Greenwave Advisors is even more optimistic about the growth of the CBD market saying, “In terms of the CBD market size, I estimate an almost $3 billion market by 2021. Right now there are 15 states that allow CBD only – this is in addition to the 28 states plus DC that have legalized medical marijuana.”
There is also evidence that traditional marijuana users are willing to give CBD a try. Outco, the largest licensed cultivator in Southern California learned that 38% of users and non-users said they wanted to learn more about CBD oil. They too believe that the market is poised for growth.
Not only is the market projected to grow by leaps and bounds, but it has already been targeted by industry insiders. According to Headset Research data, in Washington state alone there are over 800 CBD products in the marketplace. This makes it difficult for consumers to know what is what when they are trying to buy CBD products. In addition, CBD products, although suggested to improve a variety of health problems, can’t actually make those claims. So most labels on these products are intentionally light on details and this can make it pretty difficult for a shopper to know what to buy.
The government’s approach towards CBD is equally confusing. The Federal government is unclear as to oversight of these products. CBD isn’t specifically defined under the Controlled Substances Act, however the Drug Enforcement Agency (DEA) believes it is a Schedule 1 controlled substance and took The Hemp Association to court over that designation, but they lost in 2003. The Industrial Hemp Farming Act of 2015 would amend the Controlled Substance Act or CSA to exclude hemp and thus hemp-based CBD. Still some hemp-based CBD products are sold in every state believing they aren’t subject to the law.
Medical Marijuana Inc. said that there were $65 million in hemp-based CBD sales in 2015 and that they are the current market leader with over $800,000 in retail CBD sales per month. Their CBD sales have grown from $3.4 million in 2013 and are expected to be $9 million in 2016.
The market has already changed dramatically in the short time that Medical Marijuana started selling their products in 2013. Four years ago, customers were paying $1.25 for a mg., but buying less. Now the prices have plunged to 2.5-4 cents per mg. and the volumes have increased. They were basically the only game in town in 2014 when their sales were $14.5 million. However, increased competition and the drop in prices has halved their sales figures even though their customer count has increased.
It is critical for consumers to educate themselves. Medical Marijuana says its products are derived from hemp grown in Austria. Their products include Dixie Botanicals and Real Scientific CBD oils. They also own the Kannaway company, which makes the Revive line of products including the Pro-X, a 1,000 mg of CBD that is marketed towards athletes that need to avoid THC products. The company believes everyone should have 50 mg’s of CBD every day.
Another industry leader, the venture capital firm General Hemp, which owns a majority interest in Medical Marijuana, Inc. made $34 million in CBD sales in the last three years (2014-2016), excluding Medical Marijuana, Inc. companies. There is also CBD producer Axim Biotechnologies, which holds the license for CanChew, a CBD chewing gum. Axim received a patent for CanChew last month. Medical Marijuana owns 47% of Axim stock.
There are a few publicly traded companies looking to take advantage of the potentially massive CBD market. With some strong business activity in the CBD market, optimism on growth is justified. Some existing companies are working on large investments, increasing operations, and furthering the development of the industry itself.
After November’s US elections, 28 states plus the District of Columbia allowed the usage of medical marijuana even as federal law prohibits it. Since then, there has been a rapid acceptance of cannabis by consumers for both medicinal and recreational purposes and the global legal marijuana market is poised to grow to $140.5 billion in 2020 from $28.8 billion in 2015, according to global marketing firm Technavio. Medicine Man Technologies Inc. (OTC: MDCL), Medical Marijuana Inc., GW Pharmaceuticals (NASDAQ: GWPH), Cara Therapeutics Inc. (NASDAQ: CARA), Zynerba Pharmaceuticals Inc. (NASDAQ: ZYNE), Cannabis Sativa Inc. (OTC: CBDS)
Matt Karnes of Greenwave Advisors, a research and financial analysis company of the emerging legalized marijuana industry, is very optimistic about the growth of the cannabidiol market, which is used for medical purposes. “In terms of the cannabidiol market size, I estimate an almost $3 billion market by 2021. Right now there are 15 states that allow cannabidiol only – this is in addition to the 28 states plus District of Columbia that have legalized medical marijuana,” he added.
Provider of consulting services that covers all aspects of cannabis cultivations, Medicine Man Technologies Inc. (OTCQB: MDCL) implements a risk averse growing environment, applying high-tech indoor cannabis cultivation equipment and engages in medical and adult use dispensaries. The company is moving ahead to bring the benefits of mutual experience and technologies to a market engaged by marijuana growers in need of augmented productivity. During the month of August, Medicine Man had acquired Pono Publications Inc. and Success Nutrients Inc. in order to include the Three A Light™ cultivation publication that sold more than 800 copies.
Three A Light™ has made plans to release its ‘Professional Grade’ guide that will be sold to Medicine Man Technologies licensed grade clients, by the end of the year. Recently, Medicine Man has negotiated with Pono Publications and Success Nutrients to enter into an Interim Products and Services Support that would have both business to better engage with one another while the final details of the acquisition are worked out. The Company also announced that they are working on acquiring Capital G (Funk Sack and Odor No), having to build out its brand warehouse concept.