CBD and its many interconnected industries and services are growing at unprecedented rates. Touted for its comprehensive health benefits without any of the psychoactive effects of THC, CBD is reaching widespread market adoption across the world. Forbes estimates CBD markets to reach a compound growth rate of 49% in 2019, which puts the total market value at $20 billion by 2024. Adoption rates are rising steadily and will continue to do so as awareness spreads. Each year, further medical and therapeutic benefits are discovered while commercial processing continues to deliver a continuously expanding range of CBD-infused products. Here we’ll be taking you through a look at the major drivers to market adoption of CBD so that you have a better idea of where the industry is heading.
CBD Therapeutics – Driving Global Adoption Rates
Leading the way with a total market share of 70.3% in 2018 is medical marijuana. Prescription and distribution of cannabis as per government regulations and dispensary programs is the most prominent driving force behind current cannabis market adoption rates. Not only does industry-leading analysis by Grand View Research confirm this, but independent analysis grants further insight. The CBD Consumer Experience from High Yield Insights found that 44% of all motivation for trying CBD came from the availability of independent research confirming the medical benefits. Furthermore, 34% of people evaluated tried CBD because of a physician’s recommendation, and 28% were motivated by understanding the benefits of long-term health.
Recreational Use Growing Rapidly
Even though medical marijuana has paved the way for rapid growth, it is recreational use that is emerging as the fastest-growing market segment. Recreational marijuana use is growing at a compound annual growth rate of 36.4% between 2019 and 2025. This categorization includes any use other than the use of cannabis for medicinal purposes. It spans everything from getting high to the inclusion of cannabis in food, drinks and other products. Heightened comfort regarding the use of marijuana is likely to increase the number of people willing to try CBD. Numerous countries, including Canada, Uruguay, Colombia, and certain US states have already legalized recreational cannabis use, which opens up a substantial retail market.
State Revenues & The Emergence of Retail
Legalization itself has increased the demand and market adoption rates for both recreational and medicinal applications of cannabis and CBD. Many attribute the increase in use to the easy availability, wide variety and growing affordability of cannabis. Not only does legalization grant growth to cultivation, distribution and general interest from medicinal and recreational users, but it also helps governments shut down black-market trading. Just look at Colorado. It took this US State only three and a half years to reach $500 million in revenue, doubling its revenue source in under two years from legalization. Since 2014, the US has reaped over $1 billion in state revenue from Colorado alone thanks to the emergence of a retail cannabis marketplace in addition to medicinal marijuana. While only a segment of this is CBD, legalization will likely lead to more people trying the treatment.
Barriers Slowing CBD Adoption
High Yield Insights determined that the most significant barriers to adoption start with pricing concerns. 37% of all participants in their study proclaimed that CBB is too expensive. Inconsistency of CBD pricing is an issue that confuses many. Looking at the processing and testing costs does, however, give insight into this matter. CBD can be extracted from the hemp or conventional cannabis. Cultivation costs vary according to which type is grown, and which strains are potentially used, as well as other factors. Testing in certain states and countries can be costly, and hardware costs vary as well. While this does not give a reason for elevated pricing, it does help us understand where high-prices can originate. Nonetheless, CBD’s price has been dropping consistently since 2012, which can only lead to higher adoption rates as time ticks by.
Skepticism & Misuse
If we overlook the 31% of users that prefer the high of conventional cannabis flower and treatments that include THC to non-psychoactive CBD, the next issue is skepticism. 27% of users either stop using or refuse to try CBD due to believing that it simply doesn’t work. This research shows that the industry needs even more awareness raised concerning usage methods and the proven therapeutic effects. For example, many overlook critical details like how CBD needs to accumulate in the bloodstream to take full effect, making many users end treatment early. Understanding the fundamentals will help to stop skepticism and allow the use of CBD with realistic expectations.
United Calls for Better Standards & Regulations
Manufacturers, institutions, and retailers are calling for better standards and regulatory rules. Certain industry leaders have cautioned that products are flooding the market with unproven claims. The Tuberous Sclerosis Alliance agreed CBD can treat patients for seizures, but the discrepancy regards dosage in infused foods could impair adoption. Furthermore, the USA’s National Association of Chain Drug Stores and the National Community Pharmacists Association made a joint call to the FDA for safety and labelling standards. No matter which segment of marijuana markets that you look at, isolated authorities are arising with requests for better scheduling and regulation. The American Medical Research Association and the United Spinal Association have both even criticized the classification of cannabis as a Schedule 1 drug in the US due to the enormous range of research problems and regulatory barriers that this presents.
Consumer Products & CBD
Food-grade CBD is quickly gaining in popularity around the world. In the US, the use of CBD in food and drinks is growing so quickly that the US FDA is currently discussing regulatory frameworks for consumer products. This is both to address the bogus health claims that certain suppliers are purporting and to balance pricing within consumer markets. Retail CBD may soon experience massive growth making better regulations needed even more. Colorado-based research firm and authority in cannabis statistics, BDS Analytics, expects cannabis to become increasingly integrated into general retail stores. Vice President of Consumer Insights at BDS, Jessica Lukas commented to Forbes that “Most products being sold in the general market today are in untracked channels of distribution.” pointing out the rise in food, drink, and other retail sales. If these retail trends continue, availability is likely to drive CBD adoption rates even more.
Stay Aware & Only Accept the Best
As interest and demand for CBD soar, the industry evolves uncovering new demographics, pressing concerns, and unique challenges. Stay vigilant of the major drivers to market adoption of CBD as they help us understand the industry better. This puts opportunities and risks into a clear perspective. As adoption rates rise, so does the demand for reputable suppliers and high-quality products. If you’re looking for the highest quality concentrates, oils and extracts, check out budget buds online. As long as CBD is legal in your area, you’ve got immediate access to purity that you can trust.
Jessica has been closely studying the cannabis industry trends for quite some time. Intrigued by the booming growth of this sector, she takes an interest in penning down her views providing quality insight on current marijuana trends, particularly medical cannabis.