Hemp-Derived CBD Market Has The Potential to Grow to $22 Billion
We were ready to push out data about the healthy growth projections that are expected of the hemp-derived CBD industry. And then we received notice about updated projections from cannabis research firm, Brightfield Group, LLC, that far exceeded other industry forecasts. After vetting the market data, we’re excited to announce the potential this new market analysis presents and the optimistic figures anticipated of the hemp-derived CBD industry over the next four years.
These figures should make our Affiliates feel even more confident about building their PrimeMyBody businesses, knowing they’re in the center of the next big enterprise in health and wellness—one that’s every bit beneficial as it is sustainable.
Hemp-Derived CBD Market Projected to Rocket Over the Next Four Years
The stigma of being associated with marijuana’s psychoactive effects has begun to dissolve for hemp oil and CBD. Produced from a similar cannabis plant as marijuana, there had been an underlying taboo or fear factor that surrounded the public perception and legislative outlook of CBD and hemp oil.
However, with more defined scientific research, medical endorsement and media exposure, hemp oil and CBD are picking up tremendous attention as a viable health product for a wide range of consumers and their general and specific ailments. As hemp oil products are recognized by politicians, lawmakers, corporations and most importantly, consumers, as a safe, non-intoxicating wellness alternative, the CBD market—specifically the hemp-derived CBD market—is experiencing exponential growth. That growth is seemingly peanuts compared to what the next few years could bring.
The hemp-derived CBD market, which only includes products made from industrial hemp and excludes marijuana-derived products, is expected to hit $591 million in sales in the United States alone by the end of 2018. That’s a pretty hearty number in and of itself considering the entirety of the CBD market (hemp and marijuana combined) totaled a shade over $100 million just four years ago.1
Focused on strategic actionable data and analysis on the cannabis industry specifically, Brightfield Group, LLC released their “Hemp-Derived CBD 2018 Market Overview & Analysis” report in mid-September. Brightfield Group’s report notes that hemp-derived CBD across the U.S. is expected to outpace the entirety of the cannabis market, reaching $22 billion by 2022. Yes, you read that correctly. $22 billion. If that figure becomes a reality, it would be a 132 percent Compound Annual Growth Rate (CAGR) increase and a sales increase of nearly 40 times compared to the 2018 end-of-year estimates. For perspective, Forbes reports the average CAGR growth rate of nine out of the top 10 fastest growing industries in the U.S. will top out at around 17 percent.2
Other cannabis-related data reports forecast the hemp-derived CBD market will increase sequentially at its current rate. In August, New Frontier Data reported in its Industry Outlook Report the hemp-derived CBD industry has the potential to reach a healthy sales increase of $1.2 billion by 2020 and nearly $2 billion by 2022.3
So where does Brightfield Group’s $22 billion market forecast come from? The crux of their projections come from industrial hemp legislation changes and criminalization reform. Namely, the passing of the 2018 Farm Bill—which would federally legalize industrial hemp production.
Brightfield Group’s report states: “forecasts are based on the premise that a version of the bill includes full hemp legalization will pass in late September of 2018.”
Farm Bill update: Presently, a compromised 2018 Farm Bill (a House of Representatives and Senate version) has been tentatively agreed upon by the Senate and House Agricultural Committee. The committee, led by Hemp Farming Act co-sponsor and Senate Majority Leader, Mitch McConnell, did push back their September 30 deadline, but many committee members are optimistic a finalized bill will pass the House and Senate by the end of the year. The bill would then be sent to President Trump’s desk for final approval and signature.
According to the Brightfield Group report, “The hemp-derived CBD market has been growing rapidly in recent years…but it is expected to grow to nearly 40 times its current size by 2022 if what is proposed in Mitch McConnell’s Farm Bill comes to fruition.”
Brightfield Group is confident that with the passing of the 2018 Farm Bill, major retailers and consumer packaged goods (CPG) companies will begin carrying and selling CBD products “virtually overnight”—opening broad accessibility for consumers who wish to purchase different versions of hemp oil or CBD products.
Brightfield Group did receive some backlash from industry experts and market analysts for the favorable projections they publicized, which do far outpace other data group projections. In response, Brightfield Group issued a statement, which reads in part:
“We recognize that these estimates are shocking, and we stand by them. Hemp-derived CBD has been gaining huge momentum in the shadows of its oft-spoken about cousin, marijuana, allowing its growth to be largely overlooked – both by analysts in the nutraceuticals industry, medical industry, and cannabis industry…”Setting about sizing this market led us to speak with hundreds of people, crunch tens of thousands of numbers and research a great deal behind our desks – leading us to understand that the hemp-derived CBD market is indeed growing at a breathtaking pace.”4
To read Brightfield Group’s statement in full click here.
With the passage of the 2018 Farm Bill—which has bi-partisan support of hemp legalization—let’s breakdown Brightfield Group’s hemp-derived CBD distribution channels and product growth over the next four years.
Hemp-Derived CBD Distribution & Products
A $22 billion industry in the making comes from a variety of different sales channels and many different products. According to the Brightfield Group analysis, with the projected passage of the 2018 Farm Bill, more diversified and formal marketing efforts—that have been stifled because of industrial hemp’s ambiguous legal status—should transition into mainstream campaigns utilizing traditional, trending, and digital marketing channels. We’re talking about a grassroots movement pushed largely by word-of-mouth marketing snowballing into mass advertising and national marketing campaigns.
The report points out there are currently six distribution channels for hemp-derived CBD products including: online sales, smoke shops/head shops, natural food stores or independent food stores, medical companies, dispensaries, and others. Each are projected to expand, including medical channels that will have more FDA-approved CBD prescription options like Epidiolex. Future distribution channels include chain retailers. As the report says, “When massive, known entities such as Target and CVS start stocking shelves with hemp-derived CBD products in 2019 and beyond, trust will deepen among current consumers as well as extending to a much larger audience.”
Affiliate marketing or MLM companies have been categorized in the “Others” distribution channel section by Brightfield Group.
As regulatory restraints are loosened with the passing of the 2018 Farm Bill and as more distribution players enter the market there will be an expansion of hemp-derived CBD products. Here is a look at the product splits of current CBD products.
Celebrity and Scientific Endorsement Aids Mainstream CBD Use
Like many high-profile products and services, celebrity and public figure endorsements will play a factor in the perception of hemp oil and CBD moving forward. Over the last few years, endorsements from celebrities and athletes to doctors, researchers, and academics have shed positive light on the value hemp can have on the lives of virtually everyone. Mandy Moore is known to use CBD-infused lotions. Morgan Freeman has been a voice for the cannabis and CBD industry for many years now. Tommy Chong, Michael J. Fox, and Melissa Etheridge each have expressed their enthusiasm for the impact CBD has made in their lives.
In sports, many professional and amateur athletes have taken to CBD as a way to cope with the physical stress and wear-and-tear they put their bodies through. Some athletes find that CBD also helps them to better adapt to the emotional stress that comes with being a public figure.
Professional football player, Cullen Jenkins had this to say about CBD in a SBNation report.
“I thought I was going to be high. I thought I was going to be just tripping the same thing as weed. But it wasn’t anything like that. It’s more of a mellow, calming, smooth feeling. I felt pretty good.”
Health Benefits With No Psychoactive Effect
Unlike THC, the cannabis compound that causes a psychoactive effect, cannabidiol and other cannabinoids interact with components of the brain and body in a non-intoxicating manner. Cannabinoids works with the body’s Endocannabinoid System, helping to restore and promote optimal cell and body function. A few of the benefits from a daily regimen of hemp oil include:
- Ease of body discomfort and tension
- Improved immune function
- Relief from stress, frustration, or agitation
- Better night’s rest
- Strengthened and enhancement of natural detoxification
As scientific research unlocks greater potential for CBD in the coming years and legislation loosens, you can rest assured that CBD will continue to grow as a health product of choice in the U.S. and beyond. Don’t be surprised when you hear from your grandmother, professor, or neighbor about their daily hemp oil regimen. Hemp is making its resurgence and the numbers are there to support it.
Next time someone raises an eye when you say you work in the hemp industry, you can confidently smile knowing you are in a business that is just beginning to blossom.