Overview of the CBD Oil Market in 2021
The story of CBD is unique. Its rise will serve as an example of how for a quick global spread you don’t need huge marketing that’s backed up by big multinational companies. Thanks to the internet, which forever changed the world of commerce, the word of mouth can reach the other side of the planet instantly. And it’s the good word that made it possible for CBD to spread around the globe like wildfire.
Cannabis, which is the most widely used illicit drug, earns its fame mostly due to the psychotropic substance THC. But who could have predicted 10 years ago, that CBD, the nonpsychoactive cousin of THC, would shoot the value of hemp to the moon?
Like smartphones slowly became a necessity in our daily lives, CBD slowly became everyone’s treat-all solution for a myriad of ailments.
In this article, we will explore how CBD jumped out of the shadow of THC and created a billion-dollar industry.
CBD Oil Market Size
With the legalization of industrial cannabis (hemp) in the European Union, its cultivation was meant for industrial needs. It was grown mostly for seed and fiber, viewed by farmers like any other crop. But since the CBD regulations allowed the hemp flower, rich in cannabidiol, to be harvested, the tides have turned.
As we can see in the graph above, in Europe, hemp cultivation is exponentially increasing because of the soaring demand for CBD. In which markets is this reflected?
Market Analysis and Insights
The most valuable hemp derivate remains CBD oil. Europe produces 1/4th of the world’s hemp, but it is also the biggest consumer of CBD products. The major upswing in hemp production shows the old continent is trying to cope with demand.
And the market for cannabinoids is just opening its doors. With minor cannabinoids like CBG, CBD, CBN, CBC.. on the rise, the popularity of hemp extracts has just begun.
Competitive Development and Competitive Landscape:
As we have seen, the hemp cultivation and processing were and still are widely accepted in the European Union. With the help of CBD, the production of hemp skyrocketed. This can be attributed to the fact that CBD spread naturally, and simultaneously, through various companies and brands aiming for the same goal. To spread something amazing that was previously unknown to most, while still making a remarkable revenue.
Key Factors Driving the CBD Oil Market:
In a free market, competition is key. Only competition can drive healthy market growth. At first glance, CBD looks like a bear market. But, when we analyze it from a different perspective, it shows unique development potential. Parallels can be drawn with the boom of cryptocurrencies, when something that everybody wants suddenly popped out of nowhere. Although with CBD we are not shooting for big profits in money, we are trying to profit in the wellbeing of the population!
Challenges and Barriers that Impact the Development and Sizing of the CBD Oil Market
But it is not all roses after all. While the competition is widely welcomed in an open market, the CBD market still possesses many flaws. With the lack of CBD regulations, the industry can do whatever it wants. Many CBD companies are taking advantage of this situation, and the consequences fall on the CBD consumer. Mislabeled, untested, and overpriced products are the biggest plague of the CBD market. Such practices of which the only goal is a quick buck, are putting a bad image on the whole CBD industry.
And on the other side, where too much regulation or straight out prohibition on CBD products is applied, similar results can be seen. The CBD consumer is again the victim, but this time being exploited by the gray and black market.
With the supply of demand already being established in the market, the lack of good laws and regulations is the biggest barrier for the CBD market.
Market Opportunities and Threats
The CBD market is a challenging one! In a way, it can be said that there are high-risks and high rewards. Nobody can really predict how CBD regulations are going to be applied in the future. But as CBD is already widely accepted by the general public, something good like this cannot be simply taken away!
CBD Industry Growth
The growth of CBD is an exceptional one. The projections for 2020 we not far off and we foresee immense progress in infracture and positive policy changes in the next years. Germany, which is the largest CBD consumer in Europe, is seeing positive changes in policies. The request to raise the THC limit in hemp to 0.6% like in Italy is in. Italy, being on the forefront of the EU CBD industry successfully battles off any negative ruling the government tries to apply. And France, which is the biggest hemp producer in Europe, projects its CBD market to reach 1 billion.
Nobody really knows what the real Market size of CBD really is, and how much the CBD industry is really worth. Due to the industry still being in a grey zone, is also hard to predict its market growth. According to the recent Brightfield Group report, the CBD market in Europe is projected to grow by 400% in the next four years! And this is only projected when taking the legal side of the market into account!
Especially when considering the pharmaceutical industry taking foot in the market, billions become pennies. The takeover of GW Pharma, which will be acquired by the Irish company Jazz Pharmaceuticals for 7.200.000.000$ in the second quarter of 2021, shows the real economic potential of CBD and cannabis.
Lorenza Romanese, the managing director of the European Industrial Hemp Association (EIHA), predicts that the question of THC limits in the EU food has a high chance to be solved soon. With a clearer legal framework, the big food companies will be able to enter the market.
With the novel food process for CBD passed, the real breakthrough of CBD and hemp is yet to be seen!
Essentia Pura’s Analysis of the EU CBD Oil Market
Another recent victory for EIHA and the European CBD industry shows a promising future! On the EIHA’s request to lift bans of cannabis Sativa in cosmetic products and to integrate more INCI (International nomenclature of cosmetic ingredients) entries, the European Commission added a brand new entry to the Cosmetic ingredient database (CosIng)!
Starting February 2021, Cannabidiol (CANNABIDIOL – DERIVED FROM EXTRACT OR TINCTURE OR RESIN OF CANNABIS), is a new INCI cosmetic ingredient.
With European Commission listening to the needs of the hemp industry, we are positive there a bright times for CBD ahead. Below, we examine the 2020 and the 2021 CBD trends.
CBD Oil Industry Trends
The CBD industry is fast and ever-changing. It is not exactly a survival of the fittest game, but adaptability and anticipation are obviously very important. The data on CBD consumer demographics are important when we try to predict future CBD trends. As we can see in the chart below, there is not much disparity in age groups when it comes to CBD consumption. On the other hand, this means the CBD market can cater to everyone, no matter their age!
Even gender-wise, CBD usage does not vary much. But it makes sense to evaluate how we are going to position our brand and product, taking gender into account. CBD cosmetics will definitely benefit more from a female audience. And target products like CBD vape to male audiences. The CBD vape industry has seen an increase after the good outcome of KanaVape ruling in November last year, which was seen as a big victory by the sector. Be sure to also give a check about the current legal status of CBD in various countries of the European Union on our blog.
Check the chart below to find out more about the trends in CBD vaping:
CBD pet products are becoming more popular every year. Especially with CBD for dogs, a market has formed on its own. With a projected 40% annual increase for the next years, see what kind of CBD pet products are trending right now on the chart below.
Essentia Pura’s Analysis of the UK CBD Oil Market
The UK CBD market forecast is a tough one! We are excitingly awaiting the deadline imposed by Food Standards Agency. After March 31st, only the CBD products which are in process of the Novel food validation will remain on the market. This important decision by their government shows the UK’s desire to establish itself as a CBD powerhouse in the European continent.
How this, along with Brexit, will impact the UK CBD market is yet to be seen. We endorse every step in the right direction that benefits the whole industry.
Check the chart below for the last year’s trends. Will it change completely in 2021? The UK CBD market is reshaping and the cards are being reshuffled!
Opportunities for CBD Businesses in 2021
Hemp is on the rise, there no doubt. Food, beverage, textile, automotive, pharmaceutical industries, and others are eyeing this forgotten plant with unique potential. Everywhere around the world, entrepreneurs are trying to catch the buzz and get ahead of global competition. Governments are trying to establish a legal framework to ensure the safety of CBD products, while also trying to maximize the revenue from taxation of CBD products.
At the end of the day, it’s still like every other market, where supply and demand dictate the tides of the economy. It is just that the fresh and unique CBD market has its own quirks. Being a new industry, it’s not about the companies being greedy and pushy. It is just about exploring the demands of everyday CBD users that have not formed yet.
There is no blueprint on where, when, and how to position your new or existing CBD business in 2021. What we know for sure, is that there are plenty of opportunities and a lot of room to grow. And we also believe that in the long run, quality and transparency will win the customer’s favor.
If you are looking for a quality manufacturer that values long-term partnerships, based on good business relationships, do not hesitate to contact us. Together, we will make the CBD industry what it deserves to be!