SPONSOR: North Bud Farms Inc. (NBUD:CSE) Sustainable low cost, high quality cannabinoid production and procurement focusing on both bio-pharmaceutical development and Cannabinoid Infused Products. Learn More.
Beverage Companies Look to Capitalize on CBD’s Benefits and Accessibility
- According to data compiled by Hemp Business Journal, a division of New Frontier Data, sales for the U.S. hemp industry totaled USD 820 Million in 2017.
- Research suggests that the industry is expected to grow to USD 1.9 Billion by 2022 at a CAGR of 14.4% during the 5-year period.
NEW YORK, July 26, 2019 – For centuries, hemp has been used for a vast array of applications. In particular, hemp was predominantly used to manufacture textiles, paper, and construction materials because of its durability. However, now hemp has become even more popular because of its CBD compound. Hemp is derived from the cannabis plant and is one of the two main families found within the plant, the other being marijuana. Unlike marijuana, hemp’s main active component is CBD or cannabidiol, which does not cause psychoactive effects for its consumer.
Generally, the hemp plant contains less than 0.3% THC levels, which is an insignificant amount. However, because hemp is derived from the cannabis plant, federal regulators deemed hemp to be unsafe, and as a result, hemp and its CBD compound were listed as a controlled substance. Yet, researchers and scientists have begun new studies to better understand the biological makeup of hemp and compiled compelling results that went against the previously established understanding of the plant and its effects. As a result of these studies and the non-psychoactive nature of hemp, regulators lowered the scheduling of hemp and its CBD compound on the controlled substance list.
Moreover, the passage of the U.S. Farm Bill paved the way for the broader CBD industry, further accelerating its presence in legal channels. Previously, the U.S. Department of Agriculture and other state departments only allowed pilot programs to study hemp, which allowed for small-scale cultivation. To note, the Farm Bill legalized the commercialization hemp and CBD, which caused a spur of retailers to add the product to their shelves. For instance, local stores and even e-commerce giants have CBD-based products being publicly sold for every-day consumers. Notably, the bill does not put any restrictions on the sale, transport, or possession of hemp-derived products, meaning that CBD is federally legal as long as it is consistent with the law.
Now, the CBD market is one of the fastest-growing market segments within the cannabis industry, due in large part to its lenient guidelines. And as a result, more companies are looking to enter into or expand within the CBD marketplace because of the vast potential that has opened up for the market. According to data compiled by Hemp Business Journal, a division of New Frontier Data, sales for the U.S. hemp industry totaled USD 820 Million in 2017. The research suggests that the industry is expected to grow to USD 1.9 Billion by 2022 at a CAGR of 14.4% during the 5-year period.
In 2017, hemp-derived CBD products accounted for the largest market share, as the segment delivered sales of USD 190 Million, accounting for 23% of the overall market share that year. Other segments such as personal care, food, and industrial care followed closely. However, by 2022, CBD products are expected to take off, outpacing the rest of the hemp sector. Hemp-derived CBD products are anticipated to deliver sales of USD 646 Million by 2022, followed by industrial application sales of USD 527 Million. While other segments are projected to grow, they are nonetheless expected to lag behind the exponential growth of the CBD product segment. CBD can be used to simply relax after a strenuous and stressful day but it is now being leveraged within the medical sector for patients suffering from ailments such as arthritis, multiple sclerosis, chronic pain, and epilepsy.
In particular, the U.S. Food and Drug Administration has already legalized a CBD-based drug, Epidiolex, which is used to treat epilepsy. However, the FDA has mentioned that researchers will need to conduct more large-scale positive clinical trials in order for cannabis-based treatments to be approved. Currently, evidence of CBD effects comes from animal testing or very small-scale clinical trials that are minuscule compared to the FDA’s standards. For example, Esther Blessing, a psychiatrist and researcher at New York University, pointed to a 2011 study where a few dozen people who had anxiety disorders were asked to speak in front of a large audience. The study concluded that people who received CBD reported significantly less anxiety compared to those who received the placebo.
Source: https://www.prnewswire.com/news-releases/beverage-companies-look-to-capitalize-on-cbds-benefits-and-accessibility-300891710.html
Tags: Cannabis, CBD, CSE, Hemp, Marijuana, stocks, tsx, tsx-v, weed