Consumers are driving the CBD market
In our February review we’d like to share some industry news that is rather exciting. Starting with an overview of legislation, moving to specific company news of major players in the market. The highlight of recent weeks, is that in this month, IHP also released information on how high quality CBD is cultivated.
CBD, just like tetrahydrocannabinol or THC, has known therapeutic effects. However, CBD was recently removed from the U.S. Food and Drug Administration’s list of Schedule 1drugs and the new Farm Bill was recently passed by the U.S. Senate, allowing the cultivation and transportation of cannabis across all the states. These changes prove what supporters of the CBD market have been shouting all along, that CBD contains less than 0.3% THC and does not have the same psychoactive effect on users as THC, making it safe for users to consume.
The new federal status of CBD has opened up even further the possibilities for a market that was already proving to be very vibrant from before. According to the Brighton Group, the US hemp CBD market is expected to reach USD 22 Billion by 2022 and it will overtake the rest of the cannabis market in value.
sumer, and feel that GreenBox’s payment technology, together with their production line and new shipping agreement with Growpacker will offer the consumer the ultimate CBD shopping experience. They will now be able to ship orders within 24 hours of receiving them.
Aleafia Health Inc. is a medical cannabis company. They recently announced that their Aleafia Labs division, Guided 420 Genetics Inc. and U.S.-based AKWOgen Inc. will conduct a joint study on cannabinoid pharmacogenetics in medical cannabis therapy. The initial study will be conducted on 200 patients and will focus on developing medical cannabis genetic screening tools. The study will focus on the areas of THC-CBD sensitivity and metabolism, Endocannabinoid Deficiency Syndrome and cannabis treatment safety and adverse effect risk. The study will assist in product development and medical cannabis treatments for major illnesses. This will lead to further clinical studies that will yield improved treatments.
Auxly Cannabis Group Inc. recently announced its acquisition of 80% of Inverell S.A.’s outstanding common shares, making the company a global leader in the CBD market. The company recently partnered with ICC International Cannabis Corporation Inc, and they now have access to 16 markets through 35,000 pharmacies. Inverell supplies low cost, high quality CBD to support the research, development and manufacturing team at Dosecann Inc, also part of the group.
Cannabis Pharmaceuticals Inc. is a U.S. publicly traded company that is based in Tel-Aviv, Israel. The company is developing a platform to control novel drug-screening tools and artificial intelligence to create CBD treatments that will match specific cancer patient profiles. They recently announced at the World Economic Forum in Davos, Switzerland, a joint venture to produce and market their slow release capsules in Colombia, and then to other regulated markets.
US cities and states and CBD
The promise that CBD can help with various ailments, including stress, pain and sleep, is pushing up sales at a phenomenal rate. This boost was helped hen the Farm Bill legalized its cultivation.
New York City recently banned edibles with CBD. The city’s health department argues that the compound has not been approved as a food additive. North Carolina, Maine and Ohio have all pulled food products with CBD from shelves too, with the US Food and Drug Administration saying that it is concerned with health claims being made. The FDA maintains that it is illegal to market CBD products as dietary supplements.
Many in the industry argue that the FDA, cities and states are right to be concerned, since the consumer has no way to check the quality and quantity of the CBD product that is in their food and beverage.
New Strains of Cannabis with higher CBD levels
News coming in from the UK is that researchers have developed a new strain of cannabis. The British researcher on the team, Dr, David Potter and his team, are developing a cannabis based treatment to help treat psychosis and its related illnesses, including schizophrenia and the new strain will be included in their research.
Dr Potter emphasized how the cannabinoids in the cannabis plant act on the brain’s cannabinoid receptors and help regulate pain, memory and appetite. Purified CBD has been shown to have anti-psychotic and anti-anxiety effects.
CBD stores coming to a mall near you
More and more retailers in the US are willing to carry CBD products in their stores.
Charlotte’s Web Holdings is a producer and distributor of hemp-based products that could be found in more than 3,600 locations throughout the US before the signing of the New Farm Bill. They are now planning the next phase of expanding to other retailers to their distribution lists.
Nontraditional CBD players are now entering the market. Designer shoe retailer, DSW, recently announced its partnering with Green Growth Brands, to sell CBD oil topical creams, muscle balms and body lotions.
The pilot program of this cooperation was a great success with 74% of Green Growth’s products in 10DSW stores flying off the shelves.
The real estate giant Simon Property Group is the largest owner and operator of malls in the U.S. They operate 107 malls, 69 premium outlets and 234 income- producing properties. Some are in global positions, but most are situated in 37 U.S. states. Hard hit groups like Sears Holdings and J.C. Penney are shutting their doors in some malls and the solution seems to be to bring in stores selling CBD products.]
The Simon Property Group announced on the February 11. That they will be partnering with Green Growth Brands to open 108 shops in malls across the U.S. this year. The stores will carry CBD oils and their by products, but will still not be able to carry foods or beverages with CBD additives as these do not have the approval of the Food and Drug Administration (FDA).
This is a strategic move on the part of Simon Property Group, since the company’s leases of about 22% of their stores are about to expire between 2020 and 2022. This way they are ensuring that they will have someone to take over the rentals if the U.S. economy should slow.
With the annual growth rate of CBD product sales expected to increase by 147% each year until 2022, there are many opportunities opening up in CBD sales.
Pharmacies have many loyal customers who come in for their prescription medication, and the availability of CBD oil products in store will certainly boost their sales of over the counter medications and creams.
Amazon is also not going to miss the ride. The company is already an e-commerce giant with one of the lowest overheads and the best logistics in the online retail industry. The company is awaiting clarity from the FDA and it will surely push on full speed in this area.
Is CBD the cure all that claims make it out to be?
Research and trials have still not proven all the claims made by many manufacturers of CBD products. It is known that CBD is generally safe, but research is still lacking since it has been prohibited for many decades.
So far the only FDA approved treatment is Epidiolex a drug for two rare forms of childhood epilepsy. However, regulators are paying close attention and the FDA has made it clear that it is illegal to market CBD products as dietary supplements.
New York health officials ordered bakeries and restaurants to stop adding cannabidiol or CBD to foods or beverages earlier this month and have threatened to issue fines. While state regulators are also clamping down.
CBD users were getting most of their product online for many years. These users were mostly already familiar with THC, the compound found in marijuana which has a psychoactive effect on users. These consumers helped push CBD into the mainstream and the products became popular by word of mouth.
Sales of CBD quadrupled last year and consumers are taking CBD drops, rubbing it into sore muscles and using it on their skin to improve the signs of aging.
Good quality CBD products, from some of the most reputable companies in the U.S., are not cheap and consumers should be wary of cheaper imports from Asian countries because they are contaminated with pesticides and industrial waste.
As a nation, Americans have an appetite for super foods and all products related to wellness. Chronic health problems are also driving the market as is anxiety and stress. Many feel that this is a market that will probably deflate, like so many other super food and supplement crazes did. Fine examples are what happened with acai berries, turmeric and ginko biloba and so many etc.
The FDA is keeping a close watch and, this month alone issued 12 warning letters for products that are making false health claims that promise to treat or cure various diseases and health conditions. The FDA is being strict and any product sold as therapeutic must pass their approval before it’s introduced into the market.
Retailers and marketers of CBD products try and keep their claims vague, and sales continue to grow as more studies are slowly coming to light. More money needs to be pumped into research and clinical trials.
Studies have so far suggested that CBD helps boost the immune system and reduces inflammation, but this has not been tested on humans yet. According to the existing research, 500 mg of CBD are needed for it to be effective; a much higher does than other medications.
The reputable manufacturers and retailers of quality CBD products worry about unscrupulous companies trying to sell products of inferior quality. Some of these products encountered do not even contain CBD oil and others are made with toxic CBD oil from Asian markets.
These reputable traders welcome the caution with which the FDA is proceeding and are eager to see more clinical trials.
What is driving the hemp industry?
Since the passing of the 2018 Farm Bill it seems that all one reads about is CBD and the hemp industry. If you are one of those people to have missed all the noise you might be asking yourself, “But isn’t hemp marijuana, which is illegal?”
Hemp can now be grown legally, whereas marijuana cannot so let us understand where the difference lies.
The two plants are from the same genus and species known as cannabis. They look the same but hemp plants contain less than 0.3% of tetrahydrocannabinol (THC), which is the psychoactive substance found in much larger doses (5-20%) in the marijuana plant. Ingestion or vaping of the hemp plant does not induce the known “high”.
Industrial hemp has many potential uses and produces fibers for textiles, grains and for cananbidiol of hemp extract, also known as CBD. Even though little data exists to support claims of its powers to help with pin, anxiety and other disorders, now that it has been legalized much more research will be undertaken. Legally licensed growers can farm hemp and for many farmers it has been a replacement crop since previous crops grown, like tobacco, have seen a decrease in demand.
Hemp and its derivatives and extracts can now be sold in the U.S and moved across state lines, but there are still restriction on adding the products to food, beverages and animal feed.
Suggested reading – You might like the following articles:
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What is PMS and how CBD can help: A full breakdown of relevant issues on PMS treatment with cannabidiol.
What is MS and can CBD help? An in depth discussion on multiple sclerosis and the use of cannabidiol.
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