Everyone agrees that CBD business opportunities have exploded since the federal legalization of CBD from hemp in 2018. Accounting for research and development, farming and production, manufacturing and retail sales and everything in between, the CBD product market is expected to top $7.8 billion in the US alone in 2022. And cannabis analysts Arcview Market Research and BDS Analytics project that total revenues in the CBD industry could top $20 billion in 2025.
But much like the Gold Rush of the 1840s, CBD trends indicate that the long-term trajectory of the American CBD industry is for a prolonged period of slower growth. The future of CBD will be shaped by consumer loyalty to certain brands. The CBD product market is shifting from in-store to online. And every future trend for CBD is shaped by the changing demographics of its most enthusiastic customers.
CBD companies are formulating their products for increasingly sophisticated consumers. Hundreds of new products will focus on CBD plus one or more of the lesser-known cannabinoids produced by the plant. Products focusing on cannabigerol (CBG) and cannabinol (CBN) and even the appetite-control ingredient tetrahydrocannabivarin (THCV) are being developed to support specific health indications.
Even though federal restrictions still hamper cannabis research in the US, scientists around the world are constantly expanding the repertoire of health conditions that seem to be helped by various non-THC compounds in the plant. Expect product diversity only to increase, and look for the success of niche players.
When you are designing an avatar for the typical CBD consumer, who do you have in mind?
Do you have a mental image of a mustachioed hipster? Or do you envision a 50-year-old woman who knows everything about supplements and wants to add CBD to her wellness stack?
If you do, you may be surprised by what researchers at Heinz and Snap App discovered in their survey of the broader American consumer market.
The pandemic has resulted in consumers of all ages doing more research online before making a purchase decision. Millennial buyers, in particular, are strongly motivated by their own product research online. To reach Millennials, CBD product makers and retailers alike must provide massive educational content.
About 22 percent of American CBD buyers are between the ages of 22 and 35. Another 22 percent are between the ages of 50 and 64. The largest segment of the CBD market by age is the 36 to 49 group, accounting for 31 percent of sales.
The FDA does not yet authorize the sale of CBD or THC as dietary supplements. Right now, the issue with the FDA is that both CBD and THC are listed in applications for designation as "investigational new drugs." However, the FDA has the discretion to reconsider applications to sell CBD and other cannabinoids as dietary supplements, and is under some political pressure to do so.
Once that happens, big-box retailers are poised to take advantage of a huge marketing opportunity. Analysis has already been done to prepare Coca-Cola, Procter & Gamble, Unilever, and Johnson & Johnson for possible acquisition of today's leading cannabis companies. These consumer product giants will offer ingestible and topicals of every kind, and they will take advantage of plummeting cannabis ingredient prices as demand explodes.
Cannabis companies that survive and thrive through this eventuality are establishing their niche markets now. Good science and documented product quality will give today's players an edge over the coming competition.
The CBD industry seems unstoppable, and the CBD industry seems only destined to get bigger. In particular, those participants in the industry whose products reflect the most up-to-date science combined with a track record of reliability are best positioned to prosper regardless of regulatory hurdles.
In the meantime, of course, the CBD industry faces some unique challenges, from securing capital to payment processing to the ability to use ordinary marketing channels.
Canna Business Financing is here to assist entrepreneurs in the cannabis industry with all of their financial challenges. We can help you with the following:
Get in touch with our team today so you can get the funding you need to grow your new or existing CBD business. Our experts can help you get pre-approved in just 48 hours.
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