The cannabidiol (CBD) market is estimated to grow by 700% by 2020, according to Forbes. A new report by market intelligence firm Hemp Business Journal projects that the CBD market will grow to $2.1 billion by 2020, an astronomical jump in value compared to last year’s CBD market of $202 million.
CBD is one of the more than 85 cannabinoids so far identified in marijuana and hemp. Unlike the better-known compound tetrahydrocannabinol (THC), CBD is not psychoactive, meaning it won’t cause a high. Thousands of studies have shown that CBD possesses an array of therapeutic benefits, including antioxidant and neuroprotective properties.
“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,” Matt Karnes of Greenwave Advisors told Forbes, believing the growing CBD market will exceed the estimations by Hemp Business Journal.
The Hemp Business Journal report estimates that $450 million of the projected $2.1 billion in sales by 2020 will come from hemp-based sources. The hemp-derived CBD market was $90 million in 2015.
CBD that is derived from hemp is legal to import and purchase in all 50 U.S. states, without a prescription. Cannabidiol itself isn’t listed in the Controlled Substances Act like THC and marijuana.
Current market leader Medical Marijuana, Inc. told Forbes that it pulls in over $800,000 in retail hemp-based CBD sales per month. The company’s sales are expected to be $9 million in 2016, up from $3.4 million in 2013.
Being the only CBD company on the market at the time, Medical Marijuana, Inc. reached $14.5 million in sales in 2014, and while their customer count has increased since then, an increase in competition and a drop in prices has affected sales figures. Its investment company, Axim Biotechnologies, holds a patent and license for a CBD chewing gum called CanChew.
Venture capital firm General Hemp, which has controlling interest in Medical Marijuana, Inc., made $34 million in CBD sales between 2014 and 2016, not including Medical Marijuana, Inc. companies.
With the recent influx in competition and a lack of regulation, consumers must educate themselves to ensure they buy high-quality CBD. Medical Marijuana, Inc. says that the CBD oil used in its Real Scientific Hemp Oil and Dixie Botanicals products is derived from hemp grown in Austria and that it’s tested several times for purity and cannabinoid content.
According to Forbes, data from Headset Research says that it’s difficult for consumers to know what they’re getting when they purchase CBD products. The information offered on most product labels is limited.
“Many order large vats of CBD oil that is produced from Chinese industrial hemp and cut that into their products. This makes it difficult for those who grow and extract CBD locally to compete and consumers aren’t currently educated enough to have a preference for ‘homegrown’ CBD products.”
The best play for consumers is “to do their homework,” Forbes suggests, by looking into where a company acquires its CBD. Finding out which products are best will likely include trial and error, the publication says.
Read the full report from Forbes here.