In a matter of a few years, CBD has gone from uber-niche product to near-ubiquity. As it happens, the passing of the 2018 Farm Bill into law means the above statement is unlikely to seem hyperbolic within the next few years. One of the most important aspects of the Farm Bill is to make the cultivation of industrial hemp federally legal.
Back in March 2019, data from Market Study Report LLC. stated that the CBD oil market would be worth $3.86 billion in the United States by 2025. However, this is based on a compound annual growth rate of 39.5% which is, frankly, extremely conservative. Bear in mind that the CBD oil market was worth around $270 million in 2018 and is only starting to hit ‘boom’ status now.
Cowen & Co., an investment bank based in New York, believes that the entire CBD market could be worth $16 billion by 2025. The whole CBD market (all products, not just oil) enjoyed sales of between $600 million and $2 billion depending on which report you read. It is a remarkable prediction when you consider that CBD is not FDA approved. The FDA claims that cannabidiol isn’t even safe as a food additive!
Meanwhile, in September 2018, the Brightfield Group released an analysis which claimed that the CBD market would be worth $22 billion in 2022!
You may believe that these predictions are fanciful. That is until you get a handle on just how many people are using it in the U.S. alone.
Is America About to Go CBD Crazy?
There is every indication that it will! We have quickly gone from a situation where a handful of companies sold CBD oil to a market where thousands of vendors sell all manner of products infused with CBD. There are edibles, drinks, creams, bath soaps, and even CBD wine and beer!
In its report early in 2019, Cowen & Co. suggested that only 7% of Americans used CBD with 10% expected to use it by 2025. However, a Gallup Poll from June and July 2019 discovered that 14% of American adults admitted to using the cannabinoid. 20% of Americans aged 18-29 personally use CBD products, while 21% of residents in the nation’s West use cannabidiol.
In the Gallup poll, 40% of users said they used CBD to treat pain symptoms. 20% use it for anxiety, 11% for insomnia and 8% use it for arthritis. Other reasons include Depression (2%), Stress (5%), Migraines/Headaches (5%), and for General Health reasons (4%). Interestingly, only 4% of respondents say they use it recreationally; hardly a shock considering CBD is non-intoxicating.
The Gallup poll seems closer to reality than Cowen and Co’s estimate. Primarily because a Consumer Reports survey from November 2018 found that 15% of adult Americans admitted trying CBD. Encouragingly, 83% said the cannabinoid helped treat their symptoms to some degree.
To have 14-15% of American adults using CBD is incredible. The estimated population of the U.S. is approximately 329 million. Around 77% of the population is aged 18+. Therefore, there are roughly 253 million adults. Using the 14% figure provided by the Gallup poll, it means that 35 million American adults already use CBD, and the market has huge potential for growth.
In the Gallup poll, 35% of respondents say they were not familiar with CBD products! The growing nature of the market means that it is inevitable for this percentage to tumble. The market has only started to grow within the last couple of years. It isn’t outlandish to say that up to a quarter of the American adult population will use CBD within the next five years. Then there is the small matter of children using it for conditions such as epilepsy.
While cannabidiol is popular with younger Americans, the industry should arguably be targeting the older population. Just 11% of people aged 50-64 and only 8% of Americans aged 65+, use CBD. Almost half of our senior citizens know little or nothing about CBD. It is this section of the population most in need of medical treatment, and since CBD is ostensibly used to treat medical symptoms, it makes sense for seniors to consider trying it.
CBD’s Legal Status
The vast majority of Americans use CBD to treat the symptoms of a medical issue; a remarkable occurrence since cannabidiol is not FDA-approved for that purpose. CBD sellers are prohibited from making health claims about the cannabinoid. Instead, it is often marketed as a supplement.
A change in FDA status would have a huge bearing on how quickly the market grows. If the FDA decided to allow cannabidiol to be prescribed by physicians, CBD’s share in the senior market would explode overnight. Is it likely to happen? Probably not! It would threaten Big Pharma, who incidentally are already profiting by synthesizing cannabinoids and selling them as pharmaceutical drugs.
For example, GW Pharmaceuticals offer Epidiolex; a proprietary oral solution of CBD. It is an FDA-approved medication, and its share of the market is likely to exceed a billion dollars within the next couple of years. If it seems ridiculous to approve medicine derived from a plant, but prohibit the plant from which it comes; welcome to the crazy world of American healthcare!
The biggest obstacle to CBD’s growth was its federal status. At the time of writing, CBD derived from marijuana remains a Schedule I controlled substance. As a result, it is not approved as a dietary supplement or prescription drug. However, the 2018 Farm Bill delisted CBD derived from industrial hemp as a federally scheduled substance.
You may be surprised to learn that while CBD is legal for sale as a cosmetics ingredient, it can’t be sold under federal law as an ingredient in animal food, dietary supplements, or as an ingredient in food. This rule is because CBD is an active ingredient in an FDA-approved drug. Therefore, the ability to grow and sell hemp doesn’t necessarily mean CBD itself is legal.
Confused? Strap yourself in, because we’re not done yet! Once CBD from hemp was removed from the federal list of controlled substances, it was assumed that companies were free to transport it across state lines legally. Jonathan Miller, a member of the U.S. Hemp Roundtable’s legal team, said as much in December 2018.
The commissioner of the FDA, Scott Gottlieb, decided to mess with everyone’s head. In a statement, he said the FDA still considered the interstate commerce of food and dietary supplements containing cannabidiol to be illegal; regardless of whether the CBD was derived from industrial hemp.
In January 2019, a truck driver was transporting 7,000 pounds of industrial hemp from Oregon to Colorado. He was arrested in Idaho and charged with smuggling marijuana! In May 2019, the United States Department of Agriculture released a statement saying that Indian tribes and states were not allowed to prohibit the interstate transportation of shipments of hemp produced lawfully under a tribal or state plan, or under a license issued under the USDA plan.
The problem is this: Until the USDA develops a full slate of rules, states can, and in some cases, will stop hemp shipments. In other words, it will eventually be safe to transport hemp across state lines, but it may not be wise to do so right now!
It is also incorrect for CBD sellers to claim that their products are legal in all 50 states. In reality, CBD remains illegal according to state law in Nebraska and South Dakota. Residents of Idaho may be able to purchase it, but only if it contains 0.0% THC, as opposed to the maximum federal limit of 0.3%.
Until matters are clarified further, states remain free to impose their own CBD laws, just as they do with marijuana. In June 2019, for instance, the Massachusetts Department of Agricultural Resources announced the alignment of CBD regulations with those of the FDA. In other words, CBD in Massachusetts can’t be sold in food or as a dietary supplement legally, even though recreational marijuana is legal in the state!
Final Thoughts on the Growth of CBD Oil Use
Despite the utter confusion over the legality of CBD, and whether you can transport it across state lines, the market is booming. CBD brands such as Pure Kana, Premium Jane, and Green Roads are growing nationally and internationally. The same can be said for overseas CBD sellers such as Provacan.
In 2016, the total CBD market was worth $202 million in the United States, and $90 million of that was from hemp-derived products. The market has grown exponentially in the last few years despite facing an array of problems. Now that industrial hemp is legal to grow, it is only a matter of time before the USDA sorts out the transportation issue.
Perhaps the FDA will decide to approve CBD for use as a medical treatment. Even if it doesn’t, the CBD market appears to have unstoppable momentum. With an estimated 35 million adults already using it, and large demographic sectors relatively untapped, the sky is the limit for CBD.