What’s Driving the Booming Growth of the CBD Industry?
CBD products are seemingly everywhere, from oils to sprays to gummy candies. Despite a relatively new role in the mainstream marketplace, the CBD oil industry is making a splash. Popular among those living with chronic pain as well as those who simply want to diminish symptoms of stress of anxiety, CBD is now used by more people than ever before.
It may feel as though CBD is more visible than ever, but the numbers back this trend as well. With an impressive annual growth rate and an increasing presence in medical research, CBD’s meteoric rise may not be likely to slow any time soon.
The Expanding Role of CBD
CBD oil is available in all kinds of products and in many different capacities. Sold in head shops, vitamin shops, and online worldwide, CBD oil is more available now than ever before.
CBD, short for cannabidiol, is an active ingredient in marijuana. However, unlike THC – the primary ingredient in marijuana that plays a key role in the substance’s euphoric effects – CBD is in no way actively associated with eliciting a high sensation. For this reason, CBD is a popular choice for those who want to reap the benefits without experiencing intoxication. In addition, this effect, or lack thereof, has led to the reduced pressure for legal impositions. Unlike marijuana, which is strictly controlled, many jurisdictions are far less concerned with controlling the distribution of CBD.
As marijuana is viewed with less of a stigma, which, in part, is due to the rise in medical marijuana and recreational marijuana legalization nationwide, CBD is increasingly accepted as well. In fact, the FDA recently approved the first medication that uses CBD oil as a primary component. Epidiolex, a prescription medication approved for rare forms of epilepsy that are unable to be treated with other medications, was greenlit in 2018. While the FDA has not made a clear statement on CBD on the whole, the progress with one medication has promising implications for the future.
Projected Growth of CBD
Growth over the last few years has been notable, but analysts expect it to continue to increase over the coming years. Financial News Media expects to see a compound annual growth rate of 107% through 2023, marking the start of what may prove to be a thriving industry.
In 2014, the sales of legal CBD products hovered around $3.4 billion, a number that seems respectable in context. However, by 2018, this number grew to $11 billion. One report expects growth of 706% in 2019 alone in the United States, reaching $5 billion on a national level, completely disregarding the international influence. By 2023, this number is expected to reach $23.5 billion in the U.S., a remarkable growth in a product line that was relatively unheard of just a decade ago.
This industry growth takes into consideration a few components of the market, including additional products available for purchase through licensed dispensaries as well as looser legal restrictions allowing for further sales by traditional vendors. CBD product sales in dispensaries have grown even faster than overall sales from dispensaries, indicating a clear interest in marijuana products that don’t necessarily have an associated high.
The Implications of CBD Industry Growth
As CBD grows, the use of marijuana products in other products may be affected as well. The widespread nature of CBD use among varying demographics indicates that even generations not previously associated with drug legalization are beginning to see the merits in exploring the uses of marijuana in modern culture.
While younger generations, like Millennials and Gen Z, have been vocal about marijuana legalization, older age groups have been slightly more passive. However, the acceptance of CBD as a legitimate medical treatment – and the expected rise in this behavior – may mean a change in thought pattern.
The average CBD user is 40 years old with higher education and a full time job – a far different picture than the stereotype of marijuana users generally accepted in modern culture. Further, more than half of CBD users believe that marijuana should be legal on a federal level, while 90% accept the medical benefits of marijuana use. When coupled with the rise of low-THC strains of marijuana that instead prioritize CBD, the potential for growth in the marijuana market is promising.
Despite the anecdotal and scientific evidence backing CBD oil’s prominence among virtually all adult demographics, not all areas of the country share these fond thoughts regarding the product’s use.
Numerous towns and cities are taking strides toward imposing restrictions on CBD use and, in some areas, making it illegal to sell or purchase, regardless of purpose. While CBD is legal if THC levels are below .3% on a federal level, some states, like Virginia, require a prescription for CBD. Other jurisdictions have taken this concept to extremes; law enforcement in one Texas town stormed a small tobacco shop and physically confiscated CBD products. Further, CBD-infused food products are illegal on a national level, even in spite of their overall popularity.
Much is up in the air about the use of CBD oil, particularly as its rise in popularity is relatively recent. However, if analysts are to be believed, the CBD revolution is in its earliest stages. With the likelihood of sky-high growth both in the U.S. and on a global scale, the change in behaviors surrounding CBD product use may be a reflection of the road to come for marijuana acceptance on the whole.