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Already Raking in Billions, the CBD Economy is Just Getting Started
Nearly unheard of a few years ago, CBD has quickly become the hottest trend in retail products. From gummy candies to help people sleep to pet treats that calm hyper dogs’ frazzled nerves, CBD is popping up in more and more products as the potential and purported benefits of what many are treating as a miracle elixir seems to continuously expand.
Once found exclusively in holistic health stores and medical cannabis dispensaries, CBD has become so mainstream that it’s now found nationwide in national retailers like Walgreens and CVS.
What’s more, experts say we may just be seeing the tip of the iceberg when it comes to potential for growth in the CBD market. A product that barely topped $200 million in sales a few years ago is poised to be worth billions in just a few years.
One of the biggest drivers of growth in the CBD space is the the 2018 Farm Bill, in which Congress greatly expanded authorization for the cultivation of hemp, a member of the cannabis family that lacks the psychoactive compound THC that’s found in hemp’s sister plant marijuana.
There is a bit of murkiness in the law, however. Marijuana and products that contain significant amounts of THC are still considered a Schedule 1 drug by the federal government. That is, the Drug Enforcement Administration does not recognize any legal use for these products, and believes they have a high potential for abuse. Despite congressional action that seems to deregulate hemp products like non-psychoactive CBD, the DEA continues to classify most CBD under Schedule 1. It’s notable, however, that the only CBD-based medicine to have completed clinical trials, a treatment for certain forms of epileptic seizures, is classified under Schedule 5, the DEA’s list of least-concerning substances.
While ongoing research may eventually persuade the DEA and other federal regulators like the Food and Drug Administration to loosen restrictions, many states have accelerated their own processes. Colorado, for example, has legalized any part of the hemp plant for use in food products and supplements.
Still, without FDA approval, CBD products can’t make any specific claims about health or wellness benefits. That hasn’t stopped major players, like the drug store chains mentioned above or national supplement supplier GNC, from jumping on the CBD bandwagon. Big box retailers like Target and Walmart are even reportedly exploring adding CBD products to their shelves in the months to come.
CBD-infused products cover a wide range of applications and uses. While scientific evidence is currently lacking, dozens of clinical investigations into the potential benefits of CBD use are ongoing as you read this, and millions of happy consumers are already weighing in with anecdotes about its effectiveness.
Applications include edible CBD products and oral CBD oil tinctures for promoting relaxation and assisting healthy sleep cycles, CBD balms and lotions many users say soothe sore muscles and joints, CBD creams, bath bombs, and other beauty products to promote healthy skin, and CBD pet treats to help hyper or nervous pets relax. CBD is available in pill form and even as a liquid for vaping as well, and new uses and methods of consumption are still being introduced.
All of these products, combined with the increased availability of THC-free hemp from which to harvest CBD has led to explosive market growth. From $367 million in 2017, CBD-related sales are projected to top $500 million by the end of 2019. And the party is only just getting started.
Conservative estimates peg the value of the CBD industry as reaching $2 billion annually by next year, a fourfold increase in one year alone! More aggressive numbers say the market could reach $16 billion in sales over the next five years.
Recent studies show that roughly seven percent of the population is already using CBD in one form or another. Among consumers aged 35 and under, a group just coming into their own with regard to spending power, the percentage of users leaps to nine - and it’s only growing.
Thirty-three states currently allow cannabis (even the psychoactive variety) in some forms of medical treatment, ten have fully legalized the plant and its derivatives. As the national attitude toward cannabis use shifts, with the federal government relaxing some of its hemp regulations and states continuing to tackle the even thornier issue of marijuana, there’s a strong possibility the CBD market will continue to expand. If clinical trials affirm the anecdotal evidence about the efficacy of CBD in even some of the instances where it’s currently being used, it’ll provide an even bigger boost in terms of legitimacy.
Sure, CBD has quickly morphed from a niche industry into legitimate big business in recent years. But the market for CBD products is still far from mature, and all signs point to even bigger growth in the years to come.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes.