Where is the CBD industry going in 2020?
The Trouble With CBD Today
With so many CBD products hitting the shelves today, it would be difficult to imagine that anything is wrong at all with the industry. In fact, research conducted by BDS Analytics’ predicts U.S. sales of hemp-derived CBD products to reach $20 billion by 2024. That would make for a surge from $1.9 billion, a compound annual growth rate of 49%.
Despite such rapid growth in the industry, reported cases of marketing mishaps seem to threaten its growth. Miscommunicated ingredients and levels within those ingredients have resulted in adverse consequences for some users. Those products are purchased in stores like local pharmacies and not just more seedy retailers.
The popularity of CBD rose so quickly and so high that the Federal Drug Administration has had a difficult time keeping up with it. With major retailers like Walgreens, Sephora, and even Barneys entering into the CBD industry, the need for standards and clear marketing is higher than ever. To date, the FDA is holding hearings on regulations that involve CBD extraction, distribution, and marketing.
So where does the legality of CBD stand today? Recently passed legislation removed some hemp-derived CBD from the federal government’s list of controlled substances. The FDA, however, still is warning that it is illegal to market CBD as a dietary supplement or an ingredient in food and beverages. Despite this restriction, the FDA has rarely enforced its ban.
As consumers continue to be unsure of which CBD products to take and how, and investors try to navigate murky waters, the federal government is making moves to investigate the industry more closely. Many CBD users do not believe that regulating CBD makes any sense. For many, consuming CBD is very low-risk and is more akin to a vitamin than a drug.
Supplements and vitamins are not regulated by the FDA, so long as the products do not make any outlandish claims about the benefits. What does this mean? The responsibility of ensuring the accuracy of the claims belongs to the manufacturer and not the FDA. When it comes to CBD, similar issues continue to arrive.
Marketing mishaps continue to hinder CBD and the growth of the industry. One in seven Americans have tried CBD products, and the users are mostly in the 18-29-year-old age group. Many older users and other Americans are missing out on the benefits of CBD. CBD is known to help with pain management, anxiety, sleep issues, and even some forms of childhood epilepsy.
Using paid advertising on Facebook and Google is restricted to cannabis companies. That does not mean, however, that many have not found a way to work around that. Kylie Jenner promoted a CBD-infused drink on her Instagram stories, and Kim Kardashian threw a heavily publicized CBD baby-shower. The posts about Kim’s products reached around 12.3 million people, which in the end, made for great marketing.
Despite marketing restrictions, many companies continue to sell gimmicky products that only hurt the industry. CBD today is so widespread it is available in stores like Neiman Marcus, Amazon, Sephora, and more. So how can you know which products are safe and which to avoid? Many CBD retailers will provide the lab testing results of their products. Check their website or shoot them an email to understand what comprises your favorite products.
Remember, CBD derives from hemp, which contains less than .3% of THC. THC is the component that gives the high effect. Because CBD has such low THC, it is safe to use and does not produce a high. Any manufacturer that provides information regarding its products will know if there is an unsafe or illegal component to the product. There are absolutely some exceptions. However, most users across the world enjoy the benefits of CBD without any adverse side effects.
There is no stopping the popularity of CBD, thanks to the fantastic health benefits it is providing to users of CBD products. Today, CBD is available in almost every form- your morning coffee, your favorite bath bomb, CBD infused-drinks, and even candy. CBD in your face mask? Why not. A shot of CBD in your favorite juice from your local store? Sure! CBD is ubiquitous today across the United States and in many parts of the world. It seems the only direction the industry can head is up.
Given the rise of popularity in CBD and the projected industry growth, investors will likely drive CBD regulation. As more investors look to the lucrative CBD market, they want to make sure the products they are backing or creating are safe for the public. Most likely, the commercial opportunities that the industry contains will be the trigger for more transparent marketing and regulation practices. With the industry to reach $20 billion by 2024, we can expect these regulations and safer practices to begin sooner rather than later.
On average, CBD consumers are an average age of 40. CBD users typically have higher education and are more likely than non-consumers to be employed in full-time jobs. The main reason that CBD users of all ages flock to products is for pain management. CBD offers something for pain management that is nearly impossible to find elsewhere: a natural plant-based solution. Given the opioid crisis currently consuming the United States, CBD is a wonderful, safe, and healthy option that many people are turning to for pain management.
When it comes to CBD, one thing is clear: shady marketing practices or the unsafe products on the market are not scaring users away. This downside to the industry catalyzes more regulation and more transparent information. Investors and consumers alike would like to see CBD products consumed safely and legally, and the industry is well on its way to achieving that.