The global Cannabidiol (CBD) market is projected to grow at a compound annual growth rate of 125% from 2019 to 2026. The robust growth stems from growing awareness of CBD health benefits as well as the opening up of the market around the world. An increase in the number of countries that have legalized the use of CBD for its health claims has helped foster further growth, making CBD a buzzing market phenomenon.
CBD Insights
CBD is a compound extracted from hemp and marijuana for its medicinal and therapeutic properties. The compound has emerged as a remedy for addressing various medical conditions such as inflammation, pain as well as sleep disorders. CBD infused products such as cannabis oil, beauty and skincare products, gummies, and dog treats have since cropped up as manufactures continue to explore ways of leveraging CBD properties. In recent years, there has been a spike in demand for cannabidiol in pharmaceutical formulations, by virtue of the compound’s comforting properties. Likewise, hemp production has continued to edge higher as growers and producers look to take advantage of the growing market appeal. Strong demand for CBD skincare products made up of moisturizers creams, cleaners, oils and sun creams continued to trigger strong demand for CBD. The use of CBD in beauty products has gathered momentum in recent years owing to the compound’s anti-inflammatory and antioxidant properties.
Distribution Channels
Considering the fact that cannabidiol is still a controlled substance in many jurisdictions around the world, wholesalers and retailers must have a license from relevant authorities to distribute it. In countries where CBD is legal for medicinal purposes, hospitals and pharmacies have a leeway to prescribe CBD products without too many restrictions. Likewise, hospitals and pharmacies account for the biggest share when it comes to CBD distribution around the world. Retail Pharmacies come a distant second specializing mainly in offering CBD infused personal care products, food items, and medicines. Online stores such as Pure CBD Vapors, CBD Outlet Online, and Discover CBD offer multiple CBD-infused branded products and edibles as well as wax forms. CBD Regional Insights The U.S and Canada continue to lead the way, given the size of their CBD market. North America stands out in part because of friendly regulatory frameworks. A number of states in the U.S have already legalized the recreational and medicinal use of cannabis; Canada having legalized cannabis at the federal level. The Americas accounted for 78% of the global CBD market in 2018 at $2.4 billion, with Europe coming a distant second with a market value of $358 million. The beverage segment of the CBD market remains the biggest accounting for 51% of the total market valued at about $1.6 billion. This segment is projected to soar 127% by 2026.
While cannabis has remained a banned substance in most countries, some country’s attitudes are slowly changing. Asia for instance, presents an enormous untapped market opportunity. The country is considered an attractive region for laboratory proficiency owning to the territories’ large base of manufacturers as well as research laboratories.
Growing CBD Investments
Sensing a window of opportunity, a number of companies have jumped on the CBD bandwagon, creating a vast assortment of products around Cannabidiol and its byproducts. Veritas Farms, Inc. (OTCQB: VFRM), a vertically integrated agribusiness, has invested vast sums of money on the production of a full-spectrum of CBD products. The company has recently unveiled a line of natural hemp oil products that contain CBD and intend to continue to add to their assortment in the near future. Dubbed as the leader in hemp extraction products, Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) has expanded its research initiative with The Center for Discovery in New York as it seeks to develop hemp genetics. The company’s breeding program is spearheading the development of superior CBD varieties to support the efforts of local farmers. Medical cannabis firm EXMceuticals Inc. (CNSX: EXM) is another company that has set sights on the CBD landscape focusing on North America as well as Europe. The company has already secured a cannabis research and development license from the Portuguese National Authority of Medicines and Health products to lead the way in European CBD circulation and, ultimately, worldwide distribution.
Bottom line
Increased hemp production fueling the rising demand for cannabidiol rich hemp biomass should continue to bolster CBD market growth. Likewise, increased adoption of refined CBD products coupled with the legalization of medical marijuana should drive demand for CBD products worldwide. Furthermore, companies are beginning to adopt new strategies and plunging into strategic mergers and acquisitions to strengthen their CBD production capacities. As progressive CBD companies move to expand their presence in the industry, the global CBD market size should continue to clock new heights globally.
Ruchi Gupta is financial journalist, specializing in small-cap companies mainly in the cannabis space. Disclosure: Ruchi Gupta works for Momentum PR, which represents EXMceuticals on the public relations front.