Given the heightened popularity of cannabidiol (CBD) and a strong demand for the cannabinoid over the recent past, it should come as no surprise that sales of this cannabis compound are expected to continue on their upward trend. In fact, sales of CBD are expected to be so strong that they are forecasted to reach the $20 billion mark by 2024.
According to a new report from BDS Analytics entitled “The Global Cannabinoids Market: Will CBD Overtake THC?” sales of CBD are expected to comprise approximately 44% of the entire $45 billion forecasted cannabinoid market, which also includes tetrahydrocannabinol (THC) and legal cannabis.
Explosion in CBD Popularity
CBD is one of dozens of cannabinoids found in the cannabis plant, and along with its THC
counterpart, it’s among the most abundant. CBD has been linked to the alleviation of a number of
ailments, including pain, inflammation, anxiety, and seizures, among others. While it was initially
identified in the mid-1940s as a potential alternative treatment for epilepsy, CBD has since been
studied in much more detail and depth and is now associated with the treatment of far more
In fact, the FDA has recently approved the use of a CBD-based medication, Epidiolex, to treat
Dravet Syndrome (DS) and Lennox-Gastaut Syndrome (LGS), which are rare forms of epilepsy.
The 2018 Farm Bill was also recently passed by Congress, which legalized hemp and is expected
to create a CBD market boom over the next few years.
CBD sales reached $1.9 billion by 2018, and these sales are expected to grow exponentially
every year through the next few years. More specifically, sales of hemp-based CBD (rather than
marijuana-based CBD) are expected to comprise over $12 billion of the $20 billion that has been
forecasted for 2024.
Since 2014, CBD product sales in dispensaries in particular have increased at a faster rate than
overall sales in these outlets. CBD sales from dispensaries provide a strong indication of where
the overall hemp-derived CBD market is going. The share of high-CBD product sales in
dispensaries has been growing rapidly compared to high-THC product sales, accounting for 11%
of total sales in 2018 from just 5% the year before.
Top Selling CBD Products
As already noted, CBD can be consumed and applied as a medical and wellness product to help achieve better health and alleviate the symptoms that come with a number of different ailments. According to CBD, consumers – who are relatively balanced between males and females and are an average age of 43 years of age – tend to focus more of their CBD purchases on the following top-selling CBD product types:
- Pet Products
Thanks to the variety of CBD product types available to the public, consumers can choose how they prefer to apply CBD to their regimen based on their comfort level, experience with CBD, and specific ailment they are targeting.
For instance, CBD topicals may be better suited for those who seek relief for localized pain as a result of arthritis and other similar ailments, while inhalables may be better suited for consumers who are looking for near-immediate relief of anxiety, thanks to the higher bioavailability of the CBD and faster effect it tends to have compared to other modes of consumption.
How Will the FDA Respond to Potential CBD Regulation?
While hemp is no longer considered illegal under federal law, the FDA still regulates cannabis products. Before a product can be lawfully marketed to the public as having therapeutic effects, it must first be approved by the FDA, which is where things become a little cloudy stem. Right now, the only FDA-approved CBD-based product in the medical field is Epidiolex, as mentioned earlier.
But with the anticipated massive growth of the CBD market, how the FDA plans to regulate CBD in foods and beverages is still being hashed out. The agency still takes into account the fact that the cannabinoid is an active ingredient, and its addition to food and dietary supplements is still technically unlawful under the Federal Food, Drug, and Cosmetic Act (FD&C) Act. There currently is no timeline regarding the regulatory body’s release of a guideline when it comes to the sale of CBD products.
That said, the FDA also recognizes channels to legally introduce cannabis and cannabis-derived products into commerce, and one such route is for the federal agency to approve pharmaceuticals that contain CBD, as the agency has recently done with Epidiolex.
Overall Hemp Sales Also Expected to See Big Gains
According to the US Department of Agriculture (USDA), hemp sales could increase by over $100 million by 2022. In 2020 alone, they could increase by $25 million. Again, the signing of the 2018 Farm Bill will play a key role in these dramatic increases, which is opening the doors for scores of hemp farmers across the nation to grow the crop. This will both help the hemp farmers themselves as well as boost local economies where hemp is being grown.
The rate of growth of hemp acreage has already increased recently and will continue along this path thanks to hemp pilot programs that have already taken off and led to the production of hemp crops in recent years. Hemp farmers may soon be eligible for Farm Service Agency (FSA) farm loans to start, operate, and grow their farming business, as well as to expand farm storage facilities.
The total number of hemp production licenses is expected to grow through 2022, as are gross revenue estimates for hemp flower, fiber, and grain. The USDA estimates the following per-acre gross revenues:
- Hemp flower varieties: From $2,333 to $24,000 per acre.
- Hemp fiber varieties: From $23 to $1,228 per acre.
- Hemp grain varieties: Forms $87 to $453 per acre.
Farmers who produce hemp for flower, fiber, or grain will be also able to buy federal crop insurance through the Whole Farm Revenue Protection (WFRP) program which provides coverage for agricultural commodities. What’s even more? Just before the new year, the Risk Management Agency (RMA) of the U.S. Department of Agriculture (USDA) announced they are offering insurance on hemp in the following states for the new 2020 production season:
- New Mexico
- New York
- North Carolina
- North Dakota
Despite the USDA’s final interim rule in October, hemp producers have continued to face challenges, including limited insurance coverage options. But thankfully, this special protection will provide Actual Production History (APH) coverage for those who are eligible to grow fiber, grain and flower — so long as they adhere to state, tribal and federal regulations.
CBD has certainly made its mark in the health, wellness, and medical industries as a natural alternative to common medications and supplements without the psychoactivity normally associated THC — which can be seen with the growing popularity for the cannabinoid.
Based on the way things have been going thus far in the demand for CBD, it should come as no surprise that sales are expected to explode over the next few years, potentially reaching huge heights that will benefit many who play a role in this relatively new (and extremely lucrative) industry.
– Mell Green NHA Volunteer