CBD, or Cannabidiol is the part of the cannabis plant that does not produce a psychotropic effect. According to marijuana market analyzers Greenwave Advisors, CBD products are also set to grow.
“In terms of the CBD market size, I estimate an almost $3 billion market by 2021,” said founder Matt Karnes. “Right now there are 15 states that allow CBD only — in addition to the 28 states plus DC that have legalized medical marijuana.”
The Hemp Business Journal estimates a $2.1 billion in consumer sales by 2020, with only $450 million of those sales coming from hemp-based sources. Compared with 2016 sales estimates, that’s a 700 percent increase. Last year, $90 million in hemp-derived CBD products were sold, compared to $112 million in cannabis-derived CBD products.
Further signs of potential market growth include market research by one of the largest cultivators in Southern California, Outco, which states that 38 percent of users and non-users expressed interest in learning more about CBD oil. A research firm in Washington state found more than 800 CBD products in the marketplace.
CBD may also have to contend with fewer government strictures. The DEA considers CBD a Schedule 1 substance, and took the Hemp Association to court over that designation, but lost their case in 2003. The Industrial Hemp Farming Act, if passed, would exclude hemp from the Controlled Substances Act, and hemp-based CBD products as well.
In addition to American hemp farmers, cannabis cultivators looking to sell CBD oil face competition from overseas, according to a Headset Research report. “Many [local companies]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 legally to compete and consumers aren’t educated enough to have a preference for ‘homegrown’ CBD products.”