The Current State of the CBD Market
The Cannabis industry is slowly taking over as a high valued market. It's continues to expand and is predicted to reach $20 billion by 2020 as an American market. This market created a buzz and popularity that is comparable to the gold rush. Some people even call it the next big thing.
Within the Cannabis industry lies a more rapidly expanding market, the hemp-CBD. According to Brightfield Group, the hemp-CBD industry alone (this doesn't include THC) is projected to be a $22 billion mega-industry by year 2022.
CBD, is a cannabis compound that has shown profound medical potential in various studies and research. It's popularity has risen over the past years and is now set to become a leading market in America. What made CBD popular is not only its medical breakthrough. Because THC also has the same medical potential. Because CBD does not exhibit psychoactive effects (commonly called getting "high")which is why it's popular. And preferred by consumers compared to THC. It also does not have major side effects as compared to THC which makes CBD an ideal medicinal resource.
In the past CBD products were only offered on selected shops, with few doctors recommending it for medical purposes. But in 2017 to 2018, CBD products are not only limited to medicinal products but also as a natural food, beauty & skincare, and drinks. The hemp-CBD is on its way to reaching $591 million total sales in 2018 and that is in USA alone.
In the past, the CBD industry was very limited to its growth. Although it had great potential, various factors such as lack of research, confusing legislations, and limited legality was what held the hemp-CBD industry back. Pioneers of the industry examined and saw a loophole in the U.S legislation which they used to their advantage to kickstart the CBD industry. The industry slowly began to rise and have made waves of popularity. It slowly gained the attention it needed. Studies and research were put in place to explore Cannabis, more specifically hemp-derived CBD medical potential and other applications. A few states began easing up its legislation as they saw the industries potential and how it can help their state. But now, with the breakthrough in U.S legislation with the Farm Bill, it will be made easier to start up your own hemp-CBD business. With license and permits easy to acquire and clearing up confusion in current laws, the CBD Market could increase 40 times more than it is in the next four years.
When Farm Bill is passed and put into law, expect a huge margin of increase in all CBD related industry. This will only grow more when large companies of retailers and national chains joins in. Large companies have long been wanting to get in the CBD industry but were hesitant because of the vague laws and regulation.
Expect also that major Pharmaceutical companies will be investing in the CBD industry, and some have even begun their move. For example, GW Pharma have developed an epilepsy drug but it would cost the patient an estimated $32,000 a year. This is really not an ideal way that companies would want to follow. It doesn't entice the majority of the consumers.
Major Companies in the CBD Market
You won't believe this but the world's largest private employer with over 2.2 million workers, Walmart is now thinking of setting up selling cannabidiol (CBD)-based products in Canada (With Farm Bill passed maybe the U.S.A too). You could seriously envision hemp-based CBD products like oils, capsules, skincares in the shelves of Walmart Canada.
Although investment ideas are in place, Walmart Canada spokeswoman Anika Malik have said that " As we would for any new industry, Walmart Canada has done some preliminary fact-finding on this issue. But we do not have plans to carry CBD products at this time.". Walmart Canada is taking a cautious approach in investing in the CBD market industry. But it can change when regulations and prohibitions are lifted over in Canada. Canada's demand for cannabis based products have been a constant increase. They mainly use it for medical products and recreation. If restrictions are to be lifted, Wall Street predicts that the legalization could net Canada up to $5 billion in added annual sales in the CBD industry.
Walmart isn't the only large company keen on venturing the CBD market. Coca-Cola, a well-known beverage company, have engaged on discussions with Aurora Cannabis. The discussion is about a possible investment or product partnership. Both parties have coinciding interest. Aurora Cannabis wants to venture into CBD-infused beverages while Coca-Cola have shown interests in CBD-based products. This could be a great joint venture with Coca-Cola's branding and marketing paired up with Aurora Cannabis' production potential (over 570,000kg per year).
Even before Coca-Cola, there was another company who ventured in CBD-infused beverages. Modelo and Corona beer maker Constellation Brands announced a $3.8 billion equity stakes in Canopy Growth Corp. This investment was announced on August 15, 2019. This investment isn't the only time Constellation invested in Canopy Growth. In October 2017, Constellation acquired a 9.9% equity stake for about $190 million. They also bought a third of a $600 million Canadian dollar convertible note in June. This makes Constellation Brand a 38% stakeholder of Canopy Growth if the deal is finalized.
Molson Coors Brewing Co. and HEXO Corp. formerly known as Hydropothecary also announced a joint venture on August 1, 2018. The joint venture will make Molson Coors Canada a 57.5% stakeholder and a collaboration to create CBD-infused beverages when they become legal.
CBD isn't also limited to beverage companies. Other companies in various industries have also began to venture in the CBD market.
NutraNomics, Inc. formerly known as DBA Health Education Corp. have announced recently that their company is planning to begin developing a new line of CBD products to their already successful existing products. This is after the company's success in laboratory and research results. They are now looking for strategic partners to supply their raw materials and start on manufacturing high quality CBD products to the market.
HempAmericana, Inc. has also announced the initial launch of their CBD oil production with its new state-of-the-art extraction and production facility in Augusta, Maine. The company will start processing in-house inventory stock that consists of 4,000 lbs of premium-grade hemp flower. The company boasts of its Vitalis RL-245, a high capacity CO2 CBD oil extraction machine. The facility itself is said to be the first in leading cutting-edge technology on the CBD Market.
Cannabis and the Stock Market
With a rapidly growing industry, the cannabis market is bound to get in the stock market. You can now participate and buy stocks from various CBD companies. Although it is still in its initial stages, the CBD market has already made huge progress.
Cronos Group, a medical marijuana company based in Toronto is the first Canadian cannabis company to trade stock on a U.S exchange. The company's stock has a ticker symbol CRON and is trading on NASDAQ. Cronos is part of the first marijuana ETF to trade on a U.S Exchange. Cronos also previously traded under OTC markets as an American Depository Receipt (ADR). It had a ticker symbol, PRMCF.
Cronos is the owner of two cannabis oil brands, Peace Naturals and Original BC. They also own 21.5% stake in Whistler Medical Marijuana Company.
U.S cannabis stocks are now also up for trading like the New Age Beverages Corp. NBEV, Rival Level Brands Inc. LEVB, Cannabis Sativa Inc. CBDS, and many others.
Most of the stocks came from the Food & Beverage and Pharmaceutical industry.
No doubt that the CBD market is poised to become a large money making industry. Many experts have predicted it to grow to a whooping $22 billion industry in 2022. With the lifting of restrictions and the industries legalization, the CBD market is now on the rise and this time there is no legal issues that will hold it back.
Even major companies are now exploring the CBD market. They now know its potential and are approaching investments with caution. But there is no denying that the CBD market in its current state is already booming and will grow more in the coming years. Scientific research and studies have proven its efficiency and many more research are underway for its application in various industries.
With restrictions and legalities out of the picture, if you've been thinking of venturing in the CBD market now is the right time to do it. It's still young and a rising industry with a huge popularity and a growing demand. The CBD market is the gold rush of today.
If you don't have the experience or don't like to be hands-on in CBD business, you can also invest in CBD stocks. There are now multiple cannabis stocks that are traded in major U.S stock exchange.
The CBD market as what experts predicted will continue to grow. There are still various potential of the Hemp-based CBD product and you are assured that this industry will be for a long time. Mainly because it's in the food & beverage and pharmaceutical industry. Industries which are built for long-term because its a basic need for people.