Why big business is moving into the CBD market

At the end of last year, the 2018 Farm Bill officially removed hemp and all of its derivatives from the Controlled Substances Act (CSA). The bill made things crystal clear. Hemp that contains less than 0.3% THC in its flower is now legal across the whole of the U.S., which leaves the door wide open for big business and innovative entrepreneurs. Unlike the cannabis market, which is still plagued by business-related restrictions, hemp and hemp-derived CBD has been given the exact business model and context needed to guarantee exponential growth in a very short space of time.

hemp field

The federal go-ahead

Big business has recognized the CBD market’s huge potential on a number of levels, but the industry’s most attractive quality at present relates to its scalability. Owing to the recent changes in federal law, hemp, and all hemp-derived CBD products, can be grown, manufactured, and sold nationwide. This means that a company can choose to grow or source its hemp in Colorado, process and extract its CBD products in Washington, and then sell across the entire country.

That same company can choose to supply to manufacturers via a standard B2B relationship, or direct to the end consumer, or it has the option to contact large retailers and global brands with the hope of having its products sold by existing reputable names and in mainstream stores. The shift in federal law at the end of 2018 was huge, turning the CBD industry into a billion dollar market, more or less, overnight. In fact, according to The Brightfield Group, CBD is growing faster than cannabis in the U.S. and will be a $22 billion industry by 2020.

Innovation, global trends, and product profiles

In addition to its scalability, big business has also recognized the CBD industry’s enormous potential in terms of its versatility and alignment with global trends. When we look at consumer behavior the world over, we’re seeing a general shift toward a natural, organic, healthy lifestyle. The global consumer is interested in alternative therapies and products that will help him or her to live a longer, happier, healthier life. No more sugary drinks, no more pharmaceutical drugs with worrying side-effects, no more chemically-fertilized foods. This list continues.

CBD slips so naturally and comfortably into this global trend toward healthy living that it’s a practically future-proof investment for big business and innovative entrepreneurs. When extracted from the hemp plant as an oil, CBD can be used to make beauty creams and oils, deodorants, fitness drinks, and water. It can be added to food products, to sports gels, and even to wellness products for pets. It’s so versatile, and so in-keeping with the world’s contemporary drive toward healthier living, that it means companies have the bandwidth they need to innovate and intrigue.

CBD oil.jpg

Celebrities and retailers

Just a couple of years ago, few people had even heard of CBD. Times have changed. Nate Diaz proudly smokes CBD during his post-fight press conferences. Gwyneth Paltrow shares information about CBD-infused cocktails on the wellness site, Goop. Jennifer Aniston, Drew Barrymore, and Kate Hudson, are active champions of the power of CBD as a solution for anxiety and pain-relief, and even as a complement that supports and soothes a rigorous, daily workout routine. With celebrity traction behind it, CBD has been given the public voice that all industries need in order to grow.

Large retailers have also stepped up in abundance in support of the CBD industry since the passing of the 2018 Farm Bill. In January 2019, Neiman Marcus began carrying a wide range of CBD products in its stores, most of them from the industry’s present leading brands. The multinational care and beauty chain, Sephora, recently announced the launch of a curated CBD section in its stores. Coca Cola has declared interest in CBD-infused beverages. Target invested in a limited-time-only-offer of CBD oil in its stores. Even outside of the US, retailers are making moves. Holland & Barrett is now offering an in-house line of affordable, CBD-infused skincare products, and this is all just scratching at the surface.

In short, big business is moving in on the CBD market because it has seen the potential for scalable growth in the short term that’s inline with global trends and that lends itself to an incredibly innovative range of product profiles.

Big business in the CBD space.jpg

But what are the challenges?

Having noted the incredible opportunities available for big business to enter the CBD market, the shift is not without its challenges. The industry is incredibly fresh. Regulated just a few months ago, the greatest concern for anyone entering the CBD market at present is to find a reliable, traceable, quality-consistent source of hemp or hemp-derived CBD products; one that can meet the demands of an industry on the point of a huge influx and scaling at lightning speed.

Not all hemp is grown equally. Not all CBD is manufactured using the same processes, or to the same standards. Even regulatory authorities, like the FDA, still haven’t defined exactly how they will be testing and authorizing hemp growers, CBD suppliers, and related brands as they come onto the market. CBD is legal, but it’s important to know where that CBD came from and how it was processed. Consumers will want to know. Manufacturers must be able to respond.

For more information on our hemp seed genetics program, our growing methods, our farm, or our extraction processes, please feel free to contact us directly. We’re a vertically-integrated CBD supplier, with a 100% traceable supply chain.