A new report predicts that once the 2018 U.S. Farm Bill passes in the US, the CBD market will eclipse the entire cannabis market combined to reach $22 Billion by 2022.
The US CBD market is predicted to grow from 600 million today to 222 billion within the next five years, according to a new report by Brightfield Group published today. Looking at the report we can see that between 2017 and 2018, the U.S. hemp-derived CBD market has nearly doubled in size, but that is nothing compares to the next five years, when this market is expected to reach $22 billion.
As always in the medical cannabis industry, this prediction become a reality only if hemp will be fully regulated. However, since they predict that the chances of the Hemp Farming Act of 2018 (Farm Bill) to pass are fair, not to say high, the US CBD market is on the right track to become a ‘normal’ commodity market. In such event, proper regulation will pave the way for major retail chains, manufacturers, and investors to enter the market and drive rapid growth.
US CBD Market – The Bigger Picture
$22 billion by 2022 with five-year CAGR of 132%
Assuming that the 2018 U.S. Farm Bill passes, making hemp-derived CBD country-wide legal, the market is expected to grow exponentially, leaving dust to the rest of the cannabis market combined to reach $22 billion by 2022. Since the US CBD market is expected to hit $591 million this year, it will grow nearly 40 times this size by 2022, with a five-year CAGR of 132%
CBD hemp works
With almost no major investments taking place, extremely limited CBD advertising, the FDA enforcing limitations on medical claims and only few distribution channels available, it is almost a miracle that CBD has driven nearly $600 million in sales this year. This can only be explained by the simple fact that CBD works! Otherwise, there is no way to explain how consumers have realized that making an effort to buy CBD products, even with the stigma cannabis still carries is well worth their time and money.
Where there is a need there is a way, and the need for CBD is only expected to grow.
The persistent popularity of CBD, against all odds, is also in line with the longer-term anti-pharma, health and wellness trends. The recent entrance of GW to the CBD market with the predicted ‘result’ of CBD becoming partly illegal in California and Spain will only fuel the anti-pharma movement, dividing the US CBD market between a fully regulated ‘Medical Cannabis‘ to a ‘Recreational CBD‘ one.
New CBD marketing channels
As a result from the limitations on CBD marketing, new and improved CBD marketing channels are expected to replace traditional ones. Whether it is google AdWords, finally allowing CBD products, Facebook stopping its ban on CBD products, once CBD get fully legal or CBD media hubs, CBD companies will find a way to deliver their message to the public.
Top companies are making 2/3 of the US CBD market
Looking at the list of the top players in the US CBD market we can see that CW Hemp (12%) is still leading, followed by CV Sciences (Plus CBD Oil) with 11%, Medical Marijuana Inc. (Kannaway, HempMeds) with 10% and Green Roads with 6%. As predicted, the gap between larger and smaller companies has widened, with the top 20 making up to 66% of the total market.
Online sales and smoke shops are losing to natural food stores
Natural food stores host 29% of CBD sales, while online platforms hold 24% and smoke shops 23%. According to the report, by 2022 chained retailers are expected to move 64% of sales, with natural food stores 15% and online sales with only 12%.
Tinctures still dominate the US CBD market but…
CBD tinctures still dominate the market, with 39% of sales, followed by CBD Topicals (19%) and CBD Softgels / Capsules (17%). As hemp CBD is extremely versatile, recreational CBD products such as CBD cosmetics, CBD water, CBD flowers, CBD edibles, terpene infused CBD products, etc. are expected to become a major sector, appealing to more casual users.
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