The CBD industry is a fast-growing one. In 2016, the Hemp Business Journal published a report that forecast a huge growth of 700 percent by 2020 in the CBD industry. By 2020, the CBD market is slated to grow to $2.1 billion. Some experts have even higher forecasts, predicting that the industry will actually reach $3 billion by 2021.
Regardless of the exact figures, it is very clear that the industry is expanding exponentially. Businesses that want to be part of a profitable industry should jump in while the iron is hot. The Brightfield Group, a firm that collects and analyses data, says that in 2016, CBD sales reached $170 million. Experts clearly see the scope for tremendous growth, not only because hemp products are growing in popularity as awareness about them grows, but also because there is a large existing customer base of traditional cannabis users who are interested in the product.
A large Southern Californian CBD manufacturer has found that a large number of its traditional marijuana users also want to learn more about CBD oil. Cultivators are in general, very optimistic about the potential for growth in the CBD oil market.
The CBD Journey
Before 2015, the size of the market was negligible. In 2015, the market for CBD hemp products grew to a whopping $90 million. Dispensaries were also selling $112 million in CBD product derived not from hemp but from marijuana. So that year, the total CBD market was around $202 million. In 2015, the total annual retail sales for hemp products was estimated to be $573 million. The following year, the hemp industry grew to $688 million. This was a twenty percent growth that made the industry very optimistic.
The majority of the market is for industrial hemp, which has uses in agriculture, recycling, textiles, furniture, paper, automotive parts, construction materials and other industries. The 2014 Farm Bill lays down the guidelines and regulations for cultivation of hemp. According to Vote Hemp, there was a total of 9,650 acres of land under hemp cultivation in 2015 across fifteen states. There were as many as thirty universities conducting research on hemp. States issued as many as 817 licenses for hemp.
There are very specific hemp cultivars that are used for wholesale CBD oil and other CBD products. Different cultivars are used for specific purposes, since they produce varying levels of fiber, various sizes of seeds and various compositions of oil.
The Hurdles
Hemp CBD made up 19% of the hemp sales in 2016. CBD or cannabidiol is a non-psychoactive cannabinoid that is found in hemp. Hemp is different from marijuana, and doesn’t contain the high levels of the mind-altering THC.
But while it’s exciting times for the industry, there is some controversy about what the government thinks about CBD. In 2014, the Kentucky Department of Agriculture was importing 250 lbs of viable seeds and was blocked by the US custom officials. The DEA (Drug Enforcement Administration) supported the customs’ decision, and said that the import of hemp falls under the Controlled Substance Import and Export Act.” But the laws surrounding hemp and CBD oil is complex. Businesses in the industry therefore are sometimes frustrated by the government drug policies and concerns of drug enforcement administration.
There are other barriers that the hemp industry is learning to climb over. Getting access to viable and certified seed that can be grown in the US can be a difficult process. To compete with the huge global market for hemp, there is a need to reestablish the supply chains for hemp. Another problem along the way is that harvesting hemp is not easy with a traditional combine. Hemp has tough fibers that needs special equipment to harvest. Other hurdles for the industry is the global competition, and the limited information and research on varieties and cultivars of hemp.
With growth in demand, more CBD distributors have entered the field. The prices have also dropped over 2015 and 2016. The monetary value of sales may have fallen for many companies because of the price drops. But the volume of sales has gone up significantly. Companies that have already established themselves in the field are prospering. Those who want to become a CBD distributor have established networks of suppliers and farmers to turn to for the support they need in setting up a profitable business.
Regardless of the exact figures, it is very clear that the industry is expanding exponentially. Businesses that want to be part of a profitable industry should jump in while the iron is hot. The Brightfield Group, a firm that collects and analyses data, says that in 2016, CBD sales reached $170 million. Experts clearly see the scope for tremendous growth, not only because hemp products are growing in popularity as awareness about them grows, but also because there is a large existing customer base of traditional cannabis users who are interested in the product.
A large Southern Californian CBD manufacturer has found that a large number of its traditional marijuana users also want to learn more about CBD oil. Cultivators are in general, very optimistic about the potential for growth in the CBD oil market.
The CBD Journey
Before 2015, the size of the market was negligible. In 2015, the market for CBD hemp products grew to a whopping $90 million. Dispensaries were also selling $112 million in CBD product derived not from hemp but from marijuana. So that year, the total CBD market was around $202 million. In 2015, the total annual retail sales for hemp products was estimated to be $573 million. The following year, the hemp industry grew to $688 million. This was a twenty percent growth that made the industry very optimistic.
The majority of the market is for industrial hemp, which has uses in agriculture, recycling, textiles, furniture, paper, automotive parts, construction materials and other industries. The 2014 Farm Bill lays down the guidelines and regulations for cultivation of hemp. According to Vote Hemp, there was a total of 9,650 acres of land under hemp cultivation in 2015 across fifteen states. There were as many as thirty universities conducting research on hemp. States issued as many as 817 licenses for hemp.
There are very specific hemp cultivars that are used for wholesale CBD oil and other CBD products. Different cultivars are used for specific purposes, since they produce varying levels of fiber, various sizes of seeds and various compositions of oil.
The Hurdles
Hemp CBD made up 19% of the hemp sales in 2016. CBD or cannabidiol is a non-psychoactive cannabinoid that is found in hemp. Hemp is different from marijuana, and doesn’t contain the high levels of the mind-altering THC.
But while it’s exciting times for the industry, there is some controversy about what the government thinks about CBD. In 2014, the Kentucky Department of Agriculture was importing 250 lbs of viable seeds and was blocked by the US custom officials. The DEA (Drug Enforcement Administration) supported the customs’ decision, and said that the import of hemp falls under the Controlled Substance Import and Export Act.” But the laws surrounding hemp and CBD oil is complex. Businesses in the industry therefore are sometimes frustrated by the government drug policies and concerns of drug enforcement administration.
There are other barriers that the hemp industry is learning to climb over. Getting access to viable and certified seed that can be grown in the US can be a difficult process. To compete with the huge global market for hemp, there is a need to reestablish the supply chains for hemp. Another problem along the way is that harvesting hemp is not easy with a traditional combine. Hemp has tough fibers that needs special equipment to harvest. Other hurdles for the industry is the global competition, and the limited information and research on varieties and cultivars of hemp.
The Conclusion
Despite the hurdles, the hemp industry - and the wholesale CBD oil industry - is on the upward slope. Some of the market leaders like Medical Marijuana Inc. have seen their CBD hemp sales leap from $3.4 million in 2013 to a whopping $65 million in 2015.With growth in demand, more CBD distributors have entered the field. The prices have also dropped over 2015 and 2016. The monetary value of sales may have fallen for many companies because of the price drops. But the volume of sales has gone up significantly. Companies that have already established themselves in the field are prospering. Those who want to become a CBD distributor have established networks of suppliers and farmers to turn to for the support they need in setting up a profitable business.
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