America’s going crazy for CBD. The industry is in the midst of an explosion of growth in demand. BDS Analytics forecasts a whopping 49% compound annual growth rate by 2024, by which point the market size will stand at around $20 billion.
This explosive growth is sparking a ‘race to the top’ as businesses big and small scramble to get a piece of the action before it’s too late, in what is being dubbed ‘the Green Rush’
But what exactly is CBD? What’s driving this growth? And which companies are already ahead of the pack when it comes to establishing themselves in the industry? Let’s find out.
What is CBD?
CBD stands for cannabidiol. It’s a non-intoxicating extract of the hemp plant, a plant closely related to marijuana. Unlike marijuana, though, CBD doesn’t induce a high. The high associated with marijuana comes from THC, which isn’t present in hemp CBD.
CBD has been highlighted as potentially providing medicinal or therapeutic benefits, which is the main reason consumers buy it. Right now, it’s not entirely clear how many of these proposed benefits are scientifically-backed and how much of it is just marketing
hype, but early studies look promising.
Most CBD is sold as CBD-infused products, such as tinctures, topical ointments and creams, candles, vape oils, beverages, and more.
The only thing holding CBD back right now from really exploding in growth is restrictions by the FDA, who haven’t yet given the all-clear to add CBD to food products. Currently, they’re insisting that there are just too many unanswered questions to legalize
it, despite the surge in public interest. If and when they do give it the all-clear, CBD sales are expected to explode even further.
Companies Playing a Role in the CBD Market
Some of the biggest companies in the CBD market - those that hold the biggest chunk of market share - include Canadia cannabis giants like Canopy Growth, Cronoc Group, Hexo Corp, Tilray Inc, and Aurora Cannabis.
Tilray Inc has already acquired hemp company Manitoba Harvest at a cost of just under $320 million USD. They’re now ahead of the pack and have a huge early head start in the US CBD market.
As well as these titans of industry, many smaller companies, such as Diamond CBD and
Cibdol are trying to carve out their own space in the industry. Many of these smaller companies are ‘niching down’ and focusing on specific CBD products, like CPD pet products or CBD beverages.
Online CBD retailers are also prolific in their marketing efforts, as many of them scramble to attract digital traffic and create a buzz around their CBD products through content marketing, email marketing, and social media.