CBD Has Gone Mainstream: What's Next?
Those of us who have worked in the hemp industry the last few years have witnessed an exponential increase in the demand for CBD. I am often asked if the CBD industry has peaked. My short answer is no -- we are just scratching the surface of CBD’s potential -- but to fully answer the question, it is helpful to understand how this whole CBD craze started.
With the 2014 Farm Bill, the cultivation of hemp and sale of CBD became federally legal for the first time in 75 years. While this opened the door to mainstream acceptance, CBD was still considered a fringe product. Companies looking to sell CBD products had to work with special farms licensed under state Hemp Research Pilot Programs. Many states were unsure how to regulate CBD and there were often regulatory contradictions between state departments. Despite the legality of our products, it was often difficult to obtain ordinary banking services, or even shipping partners willing to transport the products.
Despite these difficulties, the groundswell for CBD was fully underway. While larger corporations and traditional marketing platforms wanted nothing to do with CBD, independent retailers across the country were adopting CBD en masse. Chiropractic offices, pharmacies and nutrition stores alike recognized both the demand for CBD and the health benefits for their customers. Consumer interest built slowly until, by 2017, CBD was a hot commodity for specialty retailers - even though the majority of Americans had still not heard of CBD or realized it was tied to the medical marijuana movement sweeping the country.
On December 21st, 2018, the hemp industry took its largest step forward. Passage of the 2018 Farm Bill transitioned hemp and CBD from pilot programs to a permanent legal status. Almost overnight, there was a paradigm shift in how Americans looked at and treated CBD. FDIC Insured banks opened accounts for CBD companies. Questions fielded by our customer service team shifted from “Are these products illegal?” to “I have heard about CBD; what products would be right for me?” Medical research universities are now co-sponsoring studies on the effects of CBD. The World Anti-Doping Agency, which oversees Olympic athletes, removed CBD from its list of banned substance, opening up the potential for endorsements by world-class athletes.
Mainstream consumers are now ready for CBD and the demand is growing by the day. CBD companies have seen record growth in recent months. The revenues of my company, Medterra, jumped 35 percent in the 30 days following the signing of the Farm Bill. What’s even more exciting is that the growth appears sustainable as new channels continually open up.
With the newfound attention on CBD there has been increased scrutiny. Many skeptics claim CBD is just the latest health fad and, due to the lack of medical research, question whether CBD has any benefits. We certainly cannot expect the interest to perpetually increase at such a rate but consumer demand for hemp and CBD show no signs of fading. Significant clinical research is underway and experienced CBD users have only become more vocal on its effects.
CBD is proving to be different from past health crazes (remember juice cleanses?) that faded. With the latest Harvard Medical research recognizing inflammation as a common factor in many diseases, CBD’s anti-inflammatory, non-psychoactive properties open it to all walks of life.
The largest change in the CBD industry since passage of the 2018 Farm Bill is the interest from major retailers with thousands of retail stores across the United States. This interest alone will dwarf what the CBD industry has done in recent years and grow CBD into the $20B+ industry that is predicted in 2022.
Furthermore, these large corporations represent a significant stamp of approval for this growing industry. One of the first national retailers taking this step forward is CVS. With a multi-state rollout, CVS made headlines for its progressive stance on CBD. Consumers seeing CBD on major retailer shelves are no longer hesitant to try the products they keep hearing about on the news. It has sparked a chain reaction for other national retailers to begin carrying CBD.
With this market opportunity now blossoming, consumers have seen a flood of new CBD companies. This will change the CBD industry in ways both good and bad. Companies unconcerned with quality (or even selling genuine CBD) pose a risk of damaging consumers perceptions on the efficacy of CBD. To combat this, industry groups are developing third-party approvals, such as the US Hemp Authority to audit the supply chain and manufacturing of prospective CBD companies. This transparency encourages both consumers and retailers to enter the space.
The wave of new CBD companies post-2018 Farm Bill is driving significant innovation. Where the relatively low competition of the past did not force innovation or differentiation, CBD companies are now trying to identify their unique place in the market. This innovation will ultimately benefit consumers as the most effective or specified companies will retain consumers selecting from a myriad of choices. While it had been good enough to simply sell pure CBD tinctures, consumers are now demanding unique product blends that are ultimately more efficacious. Those companies that cannot evolve will simply fade into obscurity and off retail shelves.
We are just starting to see the true potential of hemp. CBD has been the cornerstone of the hemp revival but the future will include a variety of other hemp derived cannabinoids that are similar to CBD, but offer wide-ranging effects on the body. One of these is Cannabinol (CBN), which research has demonstrated potential as an effective sleep aid.
With such a rapidly growing industry that is now just overcoming major regulatory hurdles, it is near impossible to predict how CBD will evolve in the coming years. What can be certain is that CBD is quickly becoming a mainstay for consumers across the world and just starting to hit its true potential.