The CBD market went through a boom between 2018 and 2019 when government deregulation led to a spurt in agricultural product of cannabis. However, by the end of last year, the market had become over-saturated and the sectors’ valuation has come tumbling down.
In 2019, there were many CBD companies valued at over $1 billion. That has dramatically changed in 2020.
Companies, such as CBD Brand, Charlotte’s Web Holdings, are valued at half that, $500 million dollars currently; others are even less. That now presents a new opportunity which companies like Hemper are poised to capitalize on.
The growth in CBD products is hardly surprising considering the whole range of therapeutic conditions it has been prescribed for. These include: anxiety, depression, insomnia, muscle ache, and many more. But CBD just represents one aspect of the marijuana market. An even bigger sector is hemp.
According to forecasts, hemp is expected to grow by 53.1% over the next five years. This market, too, has been spurred by legislative changes in the United States. Bills, such as the 2018 Farm Bill, legalized the agricultural production of hemp on an industrial scale. This then turned it into a mainstream agricultural product which has huge profit margins and is a very lucrative trade for farmers.
Indeed, the growth of the CBD sector can also be attributed to the boom in hemp. Once hemp production was in full swing, by 2018, marijuana by-products, such as CBD, became much more economical to manufacture.
In the current market, CBD growth is now attributed to the growing awareness of it therapeutic benefits among the wider population. Particularly during the lockdown period, which has subjected many people around the world to isolation and loneliness, CBD has been used to treat a range of mental health conditions.
The market is now ripe for mainstream retailers, such as Hemper, to offer CBD products at a very attractive profit margin. That profit margin hasn’t gone unnoticed by mainstream retailers, such as CVS, Walgreens and Walmart, who all plan to sell CBD products in almost 2000 locations across the United States.
And it’s not just retailers. Many US athletes, who use CBD extensively during their training recovery periods, have also launched CBD products. For example, pro rugby player, Grayson Hart, who swears by the therapeutic benefits of CBD, has begun selling his own creams, sprays and oils. Hart says one of the reasons he was motivated to launch his own product line is because many manufacturers contamicate their products with THC – a substance banned by sports anti-doping bodies.