CBD Hemp Products Market

Global Industry Analysis (2017 – 2020) – Growth Trends and Market Forecast (2021 – 2025)

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Off-label Sales Prevail for Medicinal Use; CBD Hemp Products Still Away from Mass Markets

Cannabidiol (CBD), a non-psychoactive active ingredient of cannabis directly derived from the hemp plant, has been capturing interest of consumers, pharma companies, food sector, and governments. CBD hemp products have been in use within a broad range of application areas, including pharmaceutical drugs, dietary supplements, food products, and cosmetics. Off-label medicinal use of CBD hemp-based products along with oils, gums, and supplements is common. High concentration extracts are also available on the market for treatment of many ailments.

While research continues to reaffirm the application potential of CBD and CBD hemp products across several areas such as chronic pain management and psychiatric health maintenance, the current authorization in the US is effectively limited to epilepsy drug Epidiolex® and some cosmetics. The CBD market is still very much in its infancy and yet to achieve broader level expansion through mass availability in retail that would translate into phenomenally increased sales. Growing consumer enthusiasm for CBD, coupled with relatively ready access to CBD products at traditional brick and mortar stores, will drive the growth of global CBD hemp products market in future.

Positive Regulatory Developments Make Way for CBD Hemp Products in Key Markets

Several countries have modified their national regulatory frameworks to accommodate CBD as a medicinal product. Introduction of the 2018 Farm Bill in the US legalised hemp and hemp-based CBD on a federal level. Recently, the US approved its first ever over-the-counter (OTC) CBD topical Elixicure. Moreover, Congress has introduced a bill to allow CBD usage as a dietary supplement.

Earlier in 2018, the UK’s laws related to medical cannabis were revisited, which earlier had allowed for incorporation of cannabis medical products. Novel Food ruling from the European Food Safety Authority (EFSA) later relabelled CBD as novel. A majority of European countries have their regulations in alignment with the EU ruling.

Canada has legalised hemp as well as marijuana for recreational and medical uses through Cannabis Act. Canada is second to Uruguay to legalise recreational cannabis. Canadian government is introducing a new category of cannabis health products (CHPs) to pave the legal pathway for marketing of consumer health products.

Increasing Consumer Acceptance to Heavily Fuel Next Phase of Growth for CBD Hemp Market

Increasing awareness among consumers about the health benefits experienced from taking CBD is predominantly driving demand for CBD hemp products. It further continues to penetrate new markets deeper through improved brand awareness strategies and focused digital sales. Research reveals that 3 out of 4 people in the US across different social classes would consider taking CBD, which clearly reflects the general perception of CBD among public. It has experienced a positive change over the past decade. In a big clinical acceptance push, Europe's first medical cannabis registry - Twenty21 is expected to sign up around 20,000 patients for a study on the efficacy of medical cannabis on them. Persistently increasing availability of CBD hemp products, rapid proliferation of product categories, and thriving trend around wellness are likely to create a strong breeding ground for customised CBD hemp products in global market.

Digital Contributes More to Cannabinoid Sales; Mainstream Retail Widens Direct-to-consumer Access

As CBD has transformed into a full-blown mainstream wellness product from a niche product available in a variety of retail channels, it is reaching tens of millions more consumers across the social strata. In the US, specialty direct-to-consumer e-retailers like Eaze and Leafly are distributing most CBD products. In 2020, over 65% of global hemp sale happened online and mostly direct-to-consumer. The trend is largely shaped by mobility restrictions due to the global COVID-19 pandemic.

Specialty stores are fast catching up to position themselves as the next leading sales channel. Sephora started offering CBD beauty brands in 2018. Large nutrition and supplement store chains such as The Vitamin Shoppe and GNC have a variety of hemp extract products on their catalogues. Another interesting finding of research indicates that the rise of unconventional channel partners such as pet stores, and gyms is expected to create new revenue generation opportunities in long term.

North American Market Safely Rides Favorable Regulatory Scenario; Opportunities Abound in Asia Pacific

North America offered the largest market for manufacturers of CBD hemp products in 2020. Both the US and Canada will remain the most favourable and preferred markets for CBD hemp products across the world. Latin America and Europe stand distant at second and third spots respectively. Moreover, there is strong possibility of regulatory restrictions loosening up by 2023, particularly in North America and Europe, indicates that the stage is set for an entry into the CBD industry.

Led by China and Japan, the market in Asia Pacific holds the promise of high growth potential. Both these countries offer unique opportunities with high customer demand for plant-derived and natural health products, innovative organic skincare products, and effective anti-ageing solutions.

M&A Deals Hold Essence of CBD Hemp Products Market; Competition en route to Consolidation

As of 2019, there were 3,500+ CBD brands in the US alone. With no clear winner, the top 10 US companies hold slightly less than 25% market. The existing global market leaders active in CBD hemp products landscape include Canopy Growth Corporation, CuraLeaf Holdings, and Trulieve Cannabis, which are holding onto their top rankings with less than 5% of market share each.

A number of M&A deals have experienced a strong ramp-up in the cannabis industry over the recent past. As per Viridian Deal Tracker (2020), 304 and 293 deals took place in 2018 and 2019 respectively. Larger companies acquiring smaller yet specialised players with emphasis on strategic value will highlight the nature of more such mergers and acquisitions in future.

Some of the key players operating in CBD hemp products market are Canopy Growth Corporation, CuraLeaf Holdings, Trulieve Cannabis, Charlotte's Web, Elixinol, Medical Marijuana Inc., CV Sciences, Green Roads World, Medterra, Sentia Wellness, Balanced Health Botanicals, CBDfx, Irwin Naturals, and Garden of Life.

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