We know that today every sector faces problems and possibilities, but the CBD industry, in my opinion, would be in a unique — as well as critical — position. Hemp-derived cannabinoids with less than 0.3 percent THC are still regulated as a substance that’s been federally banned before the passing of the 2018 Farm Bill. This ambiguity produces a slew of new obstacles in terms of product finance, marketing, and production. However, the sector and market are expanding at a breakneck pace.
CBD businesses must seize this opportunity while negotiating considerable obstacles. Here’s my opinion on the most pressing concerns in my sector, as well as my forecasts for what will happen as a founder & owner.
CBD Is Big Business, And It’s Only Going to Get Bigger and More Diverse in the Future
CBD businesses now offer a diverse range of products. Nonetheless, as more firms launch products that hyper-concentrate each of the hemp plant’s approximately 100 minor cannabinoids, this diversity will grow. Formulations focused on cannabinol (CBN), canaigres (CBG), and additional substances and combinations will be created for various use cases.
Regulatory Hurdles Exist, And It Will Be Up to Congress to Resolve Them
Despite the fact that CBD is allowed on the federal level, I’ve noticed that CBD businesses have trouble accessing money and regular services from financial institutions. The FDA’s classification of CBD limits its potential to be marketed as an effective and safe substance.
The United States Congress has the capacity to solve these issues, and current bills such as the Safe Banking Act in 2021, the Hemp & Hemp-Derived CBD Customer Safety and Market Stabilization Act of 2021, and the Hemp Accessibility and Product Safety Act are all aimed at doing so. Those last two legislations, crucially, would allow the FDA to approve the marketing of CBD as just a dietary supplement. This breakthrough will open up a slew of previously closed or restricted distribution and marketing channels, increasing sales and brand awareness.
Furthermore, more precise federal product quality control is a rising tide that raises all boats, as poor actors drop out in a survival-of-the-fittest approach.
Having Access to Big-Box Retailers Will Boost Sales While Also Stabilizing and Enhancing Supply Chains
CBD will, in my opinion, enter the majority of brick-and-mortar retail once corporations can advertise it as a nutritional supplement. Big-box retailers will, in particular, provide a variety of topicals and ingestible in a variety of product categories and applications.
This new distribution model has the potential to significantly expand the market while also helping other supply chain players, such as hemp growers and labs that extract, distill, crystallize, and isolate CBD from plants. One of the most significant advantages will be enticing more high-quality labs to enter the CBD market, as many facilities are now hesitant to venture outside of their core strengths. As retail demand develops, the price of products will likewise rise dramatically.
Through Acquisitions, Many Big Names Will Enter the Game
Large corporations have indeed been hesitant to adopt CBD as the business matures from its “Wild West” beginnings. However, I predict that as the regulatory situation clears and stabilizes, many corporate behemoths will try to expand their product line with CBD or add brand-new items that offer up new growth opportunities. Companies such as Procter & Gamble, Johnson and or Johnson, Coca-Cola, Unilever, and others may enter the CBD market through acquisitions of current CBD market leaders.
Education, Quality Assurance, And Safety Will All Increase Dramatically
The going mainstream of CBD will be accompanied by an all-time high for education regarding cannabinoids. Consumers will feel more secure and confident when purchasing smartly regulated products because of this.
Many CBD businesses, which currently mainly self-regulate, will be pushed to strengthen their quality assurance & compliance efforts to stay in business. And those who already sell high-quality items will finally see the fruits of their R&D and production investments, which have had to be made with a lower return on investment.
CBD has a promising future, but it is still dependent on critical developments.
The CBD industry is indeed an unstoppable juggernaut in certain aspects. It’s already a multibillion-dollar industry that’ll only grow as millions of customers express their preferences. On the other hand, CBD businesses have some specific challenges, ranging from acquiring finance to using regular online payments to being free to sell through traditional channels.
The FDA’s classification of CBD as just a dietary supplement, this industry’s unrestricted availability of financial services, or an intelligent regulatory system that improves product safety and quality across the board are all critical developments that will remove these barriers.
As the owner of a CBD business, I, like so many of my colleagues, am waiting to see what happens. We navigate our way past these difficulties to expand our businesses. However, I expect that politicians will soon clarify CBD’s legal status, removing hurdles to innovation, safety, and the industry’s normalization. Even more significant growth — exponential expansion — is on the horizon once that occurs.