By: Joshua Waldrop
CBD is more than a fad or a passing trend. It very well may represent a paradigm shift in the worlds of health, beauty, and wellness. As we learn more information about CBD and its potentially healing properties, and as regulations regarding CBD, particularly in regards to consumables, become more relaxed and accepted, the CBD market looks poised to go from boom to sonic boom.
Bloomberg reports that according to a new study released by Wall Street banking and investment firm Cowen & Co, the CBD market could surpass $16 billion by 2025. The study showed that a surprising 7% of Americans are already using CBD in one of its various delivery forms, almost double the number of e-cigarette users and almost half the number who reportedly use tobacco products.
“This initial response piqued our interest considerably, as [number of CBD users] was much higher than we would have suspected,” said Vivien Azer, Senior Analyst at Cowen & Co.
While some might be quick to dismiss the projections as nothing more than a smoke plume blowing from the stack of a fast moving CBD hype train, Azer, the first high level Wall Street analyst to cover the burgeoning cannabis industry, insists that the firm’s estimate that CBD use could grow to 10% of U.S. adults, or as Fortune points out, 25 million users, is a “conservative” one meant to leave plenty of room for regulatory buoyancy. That means that it is possible that the CBD market might far exceed those those numbers.
The U.S. Farm Bill, passed in December, federally legalized hemp and its CBD derivative for with certain regulatory stipulations. Use of CBD as a supplement in any health or wellness products promoting themselves as having any therapeutic properties must meet certain federal approval before being permitted for interstate commerce. The Food and Drug Administration, while recommending the rescheduling of CBD to the Drug Enforcement Administration, prohibit the marketing of CBD products as a dietary supplement citing a technicality in their evaluation process that cannot allow approval of a product as such if it has already been introduced for consideration as a pharmaceutical agent. As CBD-infused consumables, including beers, wines, and spirits, gain in popularity, outgoing FDA Commissioner Scott Gottlieb has pledged that the Agency will be diligent in reevaluating their stance on CBD.
The study showed that CBD users tended to skew younger with over 9% of users age 18 to 34, 6.4% age 44 to 55, and 3.7% age 55 and above, according to Forbes. It also found that tinctures, liquid extracts that can be dropped into beverages or taken sublingually, accounted for the highest sales in the market with 44%, cream based topicals like skin lotions and salves representing 25% of sales, capsules marking 22%, and almost 20% of the market represented by the growing CBD-infused beverage space.
According to Azer, the soaring growth of the CBD industry is largely attributed to two factors. One, the growing number of CBD products in its many variables hitting the shelves as well as the growing number of mainstream retail outlets such as Amazon, Sephora, Neiman Marcus, and Barney’s getting into the CBD game. Perhaps more important however is the relative immediacy of result offered by CBD.
“With CBD, you know if it works for you or not. For some consumers, it actually works as both an anti-inflammatory and anti-anxiety [reliever],” said Azer. “There is a tangible payback in relatively short order.”
The Cowen report signifies a marked jump from original projected CBD sales for 2018 which have been estimated to be somewhere between $600 Million and $2 Billion, according to the Cannabis Business Times.
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