Consumers want CBD and hemp products, and the numbers back it up.
A Colorado-based marketing research company, BDS Analytics, and Arcview Market Research projects CBD sales in the United States to grow by more than $24 billion in 2024. The numbers are based on products expected to be sold at retailers and licensed dispensaries.
The firm believes there is great opportunity for all stakeholders in the industry. Its forecast shows the CBD market will grow by 49% across all distribution channels by 2024. The success of these products depends on education and understanding, dosing, and consistent labeling, according to BDS. Specifically, people need to be made aware of the differences between CBD and THC, which is also from the cannabis plant and gives people a feeling of euphoria when smoked or ingested.
The research firm finds CBD to be much more unique than other dietary supplements for two primary reasons: it is well-known since it as an active ingredient of the cannabis plant that has anecdotal evidence of health benefits. Many have claimed that CBD, which is available in creams, balms, and lotions and are often added to drinks and food, can help alleviate pain and relieve anxiety. However, there is little scientific proof to back them up.
Other Marketing Insights About the CBD Industry
Since 2014, CBD product sales in dispensaries have grown at faster rates than overall sales in dispensaries, according to BDS.
Another important fact to note is that 66% of hemp-derived CBD consumers in the nation agree that cannabis should be legalized on a federal level. Additionally, 90% believing that marijuana has medical benefits, largely driven by the belief that it can relieve pain.
BDS also found that cannabis consumers differ from CBD consumers. CBD consumers have a nearly one-to-one ratio in terms of gender while one-third of cannabis consumers are female. CBD consumers also are about 40, employed full time, and have higher levels of education.
Challenges Within the Industry
Though the marketing insights are attractive, the current lack of regulatory framework for CBD sales could hinder progress. The 2018 farm bill, which decriminalized industrial hemp, was signed into law in December, but shortly after the U.S. Food and Drug Administration announced that it will need to regulate it. This created a lot of confusion among CBD merchants, advocates, and states.
The FDA states that it has the authority to regulate these products because it had approved the CBD-based epilepsy medicine, Epidiolex. Once something is approved as a medication, it cannot be randomly added to food, drinks, and supplements and sold to the public. The agency also said it would treat other CBD products the same, meaning it could put each item through its rigid review process before it could be legally sold, as medications.
The FDA triggered states, like New York, to ban the sale of foods, drinks, and supplements that contain CBD. Now, the agency is playing catching up, trying to come up with a regulatory framework for these products.
The FDA held a public hearing on the matter last month and will continue to collect statements until July 2. The lengthy governmental process may leave merchants and advocates waiting some time for clarity on regulations.
Though the projections are positive for the CBD industry, merchants need to stay tuned to what government does next. As the FDA continues to take comments and requests additional research, merchants need to be cautious and if they sell products, they need to make sure they aren’t making any false or misleading claims.
Apply for Merchant Account Services
Merchants that need CBD merchant accounts should contact eMerchantBroker.com. It works with high-risk merchants and those with no processing histories. Its online application process is simple and quick.