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Is CBD a Growing Industry?

by Louise W. Rice
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Cannabis is subdivided into hemp and marijuana, although they are subspecies of the same plant. Hemp has a high content of cannabidiol CBD, which allows it to be used in the textile industry, medicine, paper production, fuel production, construction, and other areas. Marijuana is high in tetrahydrocannabinol (THC), which has a mind-altering psychoactive effect and is used mostly for personal use.

After the legalization of marijuana in the United States and the rise to power of Joe Biden, the opportunities for cannabis dispensary marketing have expanded greatly, as many of the bureaucratic obstacles that previously prevented the growth of industrial and medical use of this raw material have been removed. All the volunteers nowadays can easily buy CBD at online store.

The natural cannabis extract cannabidiol has become increasingly popular in recent years, and it is already difficult to find an industry in which it would not find its application. It is used to create pain relief creams, candies, patches, nutrient mixtures, vapes, hats, bags, notebooks, and drugs for the treatment of arthritis, epilepsy, and post-traumatic stress disorder.

Sector situation and market forecast

Quince Market Insights estimates that the global CBD market will be worth $2.74 billion in 2021 and will grow at a CAGR of 51% through 2030. Most of the growth is expected to come from increased use in the treatment of cancer, psychiatric and inflammatory diseases.

Separately, it is worth noting that during the period of quarantine restrictions in 2020, the CBD market showed a slowdown in growth rates from the forecast average annual values to 26.5%.

Scotts Miracle-Gro

American Scotts Miracle-Gro (SMG) is a company that sells and manufactures fertilizers and seeds for a wide range of crops and has been operating since 1868. Following the legalization of cannabis in the US, the company invested in its subsidiary Hawthorne Gardening, which grows a variety of materials for the cannabis sector.

Over the past 5 years, the company’s shares have risen by 43%, but have declined since the beginning of 2021 due to high capital expenditures and lower revenue growth, which is partly due to natural events, supply chain problems, and the company’s investment in a new direction.

Over the past 12 months, revenue growth amounted to 5.1% against 40% in the same period last year. With a capitalization of $7.38 billion, the company employs more than 2,400 employees.

Cronos Group

The Canadian Cronos Group (CRON) manufactures and distributes its products on five different continents, promoting the use of cannabis as a raw material. The company is actively pursuing innovative research to improve current crops and create new crops, and analyzes various industries to expand the use of cannabis. The company’s portfolio currently includes three CBD brands that were created based on its own developments.

Innovative Industrial Properties

American real estate investment fund Innovative Industrial Properties (IIPR) specializes in leasing industrial buildings. The company owns 59 greenhouses across the US and leases them to experienced licensed cannabis growers. Over the past 5 years, the company’s shares have risen in price by 962%, but are showing a correction in 2022 due to a slowdown in revenue growth to 87.4% compared to 206% in the same period last year.

Who is the buyer?

Who is highly interested in cannabidiol products? Last summer Brightfield Group conducted a survey, according to which millennials are the most interested in buying CBD.

The next place goes to buyers the d just over 30. As for older people, such as the forty-year-olds, their demand gradually decreases. But in the age group from 50 to 60 years it again grows. For this category of people, the highest interest is the use of tinctures, creams, and capsules, to fight age or chronic pain.

There is a roughly equal number of women and men among CBD users, as gender doesn’t influence the need to try such types of products.

There are two types of hemp extract, attractive to customers: THC (tetrahydrocannabinol), which has a psychotropic effect, and CBD (cannabidiol), which does not and has a much more mild effect on health and the body.

Industrial hemp has less than 0.3% THC but can have high levels of CBD. It can be pointed out that the quantity of people interested in the product around the World is constantly growing.

Word to scientists

Cannabidiol has obvious benefits. But till now, there have been no large-scale controlled studies on its effectiveness. It’s still under research. However, there are undoubtedly prospects for using the substance in all spheres of human life.

Several small studies prove that CBD has calming, anti-inflammatory, and antipsychotic effects. This is an extremely promising branch of scientific research. People who use it, state that Cannabidiol has an anti-inflammatory effect. It may be helpful in case of intestinal inflammation.

As for heavy advertisements of the use of CBD in “feel good” drinks or energy drinks, their benefits have not been proven till now. It opens up great perspectives for investigation.

Conclusions

Technological progress doesn’t stay still. As for the scientific discoveries, they made it possible to expand the use of cannabidiol in various industries. It can be met from medical to construction. Brightfield Group did a survey where 5,000 CBD consumers took part, millennials are the main target audience.

They are most likely to relate to various cannabis-based products. Most probably, CBD is perceived worse by the adult generation – because they already have formed habits. Very often, it’s also about prejudices they have.

The controversial and fast-growing cannabis industry is attracting more and more investor attention, and a new popular raw material is finding applications in a wide range of industries.

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