October 05, 2022 - 4 min read
There is no denying that cannabidiol (CBD) has gone mainstream. Consumers have made their demands clear, in a way unthinkable 30 years ago, for cannabinoid-based pharmaceutical drugs, over-the-counter remedies, and general health products. So it is that pharmaceutical firms are investigating clinical applications of CBD, and other cannabinoids, vigorously. Large retailers in the United States and Europe are selling over-the-counter products that contain CBD. And industry at large is ever more enthusiastic about using cannabinoids wherever possible, and also cannabinoid helpers (‘terpenes’ and ‘flavonoids’) in a wide and growing range of customer brands. These are proliferating quickly into dietary supplements, cosmeceuticals and beauty products, food and beverage additives, and even pet food enhancers. The business landscape has changed, in other words, to match the culture at large. Slowly, regulatory agencies are moving aside to allow easier production and development of cannabinoids, particularly ultra-pure, synthetic ones, for pharmaceutical use. (Not every cannabinoid needs to come from a plant.) In the United States, the Food and Drug Administration, far from restricting research into cannabinoid-based drug products, actively encourages it.
The potential market is explosive. By one prediction, global sales of medical cannabinoids alone will pass US $28 billion by 2024. CBD by itself is expected to garner U.S. sales past US $16 billion by 2025, and to reach US $41 billion globally. This growth is literally exponential. U.S. CBD sales totaled $4.6 billion in 2020, merely two years after hemp-derived cannabinoids were legalized.
For a number of reasons, this growth curve can be expected to steepen even more.
Congress will respond
Hemp-derived CBD, if it contains less than 0.3% THC, is legal to produce and buy. Confoundingly for the point of sale, CBD has not yet been classified by the FDA as a dietary supplement. This is the legal status it needs if it’s not to be sold as a drug or an ‘untested substance’. The FDA is under pressure from lawmakers and consumers to so classify it, which will simplify life for businesses, currently facing problems obtaining capital and standard services from financial institutions, and some restrictions on advertising, but the Administration resists, saying that the datafund about CBD’s safety and efficacy is still too small. Research evidence is accumulating, however, showing that, properly managed, CBD is safe as a dietary supplement, and need not be designated as a drug. It is reasonable to expect this situation to ease. CBD-friendly bills are currently before Congress, and they or ones like them almost certainly will pass into law. Legislation such as the Safe Banking Act of 2021, the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021, and the Hemp Access and Consumer Safety Act are already in place, important steps toward opening crucial marketing and distribution channels.
The market is maturing
Mainstreaming CBD in shopping culture will educate buyers about the products before them, and will boost consumer expectations about safety and quality. Companies trying to sell low-quality products will not fare well. Likewise, companies up and down the supply chain will be under pressure – and also freed, after restrictions ease – to optimize their services, to the eventual benefit of customers.Cultivators will find licensing easier, and be able to invest in property and facilities more practically; they may also outsource production to countries with cheap labor markets. Manufacturers will assure the quality of new products more easily as state-accredited screening labs grow, improve, and standardize. Transportation firms will move products more freely across state lines. And at the retail end, zoning restrictions governing sale of cannabis derivatives should ease and standardize, making products more easily available. Products may grow more inexpensive too, if the burden of state excise taxes grows lighter and less quixotic.
The big players are coming
We can also expect corporate giants to enter the market. They will open their own CBD product lines, and will diversify ones already in place. If history is any indication, this will be an age of large acquisitions of leading CBD market players. Already,Unilever’s Ben & Jerry’s, Coca-Cola, PepsiCo, Hershey Co., and General Mills have publicly expressed interest in CBD joint-ventures. Nestle Health Science’s ‘Garden of Life’ opened aline ofCBD drops, whole hemp extract spray, and softgels in 2019. In the same year, Evolv Ventures, the venture capital unit of Kraft Heinz,invested in Flowhub, a provider of retail software for cannabis dispensaries. Beverage giants Molson Coors and Moosehead have plans to debut non-alcoholic cannabis-infused drinks. The packaged fruit and vegetables firm Seneca Foods has inaugurated vertical seed-to-sale facilities of its own, in a recent joint venture with a major hemp processing firm in Washington State. And fast food chain Carls Jr. has trialed a “Rocky Mountain High” burger, with CBD-infused sauce.
DiolPure products contain PureForm CBD™ transformed from aromatic terpenes for pharmaceutical-grade purity. PureForm CBD™ is bioidentical to CBD extracted from hemp and cannabis, but free of any residual cannabinoids like THC or impurities or chemicals that can associate with traditional plant-derived production processes.
The foregoing is a report on trends and developments in cannabinoid industry research. No product description herein is intended as a recommendation for diagnosis, treatment, cure or prevention of any disease or syndrome.
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