These days, while it is knottier for the entrepreneurs to find a niche that is steady and consistent, the CBD industry shows promise. Even with the sluggish change in laws globally, this particular industry keeps on surprising us with its sustained stability. Not only how people deal with self-care and wellness changes over time, but the CBD industry also continues transforming accordingly. Here, we will discuss the future of the CBD industry and how things will change in 2021 and beyond.
According to statistics, in 2018, the wellness industry owned a $4.5 trillion market. So, there is no wonder why entrepreneurs have a significant opportunity to achieve success with their products and services that provide enhanced consumer experiences. Even in this coronavirus pandemic, the CBD industry is undergoing steady growth.
In 2019, the CBD industry hit the milestone of a growth rate of 700% in the United States alone. Besides, experts predict that the growth rate will sustain, and this industry will garner more than twenty-seven billion dollars by 2023. So, for CBD businesses, anticipating a promising Return On Investment (ROI) makes sense. However, the current statistics and evidence of growth give us some clue about the future of the CBD industry.
While in 2019, the global market of CBD was estimated at more than $7 billion, projections show it to rise to $9.3 billion by the end of December 2020. Europe is the 2nd largest market for hemp-derived products. Currently, the continent is seeing an explosion in sales of hemp-derived items. The European younger generations are the key consumers of CBD oil products. On the contrary, more than 77% of European citizens believe that CBD should be prevalent, and everyone should have access to it.
The revolution of the internet has given access to any kind of information at people’s fingertips. These days, consumers are more concerned about making a purchase decision on each service or product. That being the case, CBD products are no exception. People are educating themselves about almost anything related to CBD. They are actively searching for information about hemp-derived products. They want to know the benefits, side effects, current research outcomes, and so on. Besides, the mounting research on cannabis and cannabis-derived products points to the increased interest in the industry.
According to research, in April 2019, more than 6 million Google searches were made for CBD. Researchers also added that the Google search rate of CBD increased by 160% compared to the previous two consecutive years.
A survey carried on in 2019 put a spotlight on the most preferred CBD products by the consumers. According to that particular consumer reports survey, demand for CBD edibles was atop other forms of CBD oil. That is about 35% of people purchased CBD infused drinks or food.
The survey also found that the consumers’ preference for vaping devices and CBD drops made up 30% of CBD purchases. Besides, according to BDSA analytics, the sales of CBD gummies exceeded $145 million in 2019, making it one of the most popular edibles. However, these data can help you assess the future of the CBD industry. Also, you can decide on which products you should sell for generating a significant profit.
If you expect a high ROI, you have to take a significant amount of risk. Perhaps, it is true for every industry in the world. When you consider starting a CBD brand, you must be aware of the substantial risks involved with the market. It becomes unavoidable when you decide on venturing into the CBD industry. This particular industry holds the potential of risks because of the poor-regulations and start-up costs. However, despite all these challenges, you can create opportunities to enter the market.
For instance, you can partner with a reputable white label CBD manufacturer. It can help you launch with minimum investment and save time. Besides, some distributors offer expert guidance for starters. It can help you grow and get accustomed to the intricate ecosystem of the CBD industry. The next door to enter the CBD market is by partnering with a private label CBD manufacturer. These days, lots of entrepreneurs are using wholesale CBD program to launch their CBD business faster and with less hassles. As a result, you can sail past the potential risks and generate ROI quicker than anticipated.
However, although there’s a high risk involved with the CBD industry, it is yet set to thrive since the demand is increasing remarkably. Individual investors and some wealthy corporations are putting billions of dollars into this flourishing industry. See the graph below. It shows the growth of sales per year which is rising gradually.
While dispensaries and physical stores have been the most common places for buying CBD, the coronavirus pandemic has driven a surge in online shopping. These days, people feel more comfortable shopping for CBD online. As a result, transitioning to an online CBD business can be a great move. Perhaps, eCommerce CBD company is going to be a new norm in the future of the CBD industry.
According to experts, in 2017, more than twenty new start-ups ventured into the CBD market with hemp-derived products being the primary items. Most of these companies started by selling cocktails, food, lotions, and an array of CBD products.
Whether you are an investor or an entrepreneur looking to partner with a manufacturer, ensure you educate yourself as much as possible. Here are some key components you should evaluate before settling on any investment:
Although the cultivation of hemp was legalized in 2018, laws surrounding CBD oil varies from state to state in the USA. Therefore, even though CBD oil products that contain THC less than 0.3% are legal, some states have imposed their own rules.
For instance, Idaho is a good case in point. Although, in most states, a THC level less than 0.3% is considered legit, in Idaho, CBD oil or CBD-infused products should not contain even the least amount of this psychoactive compound.
However, laws and regulations surrounding CBD production, use, and distribution haven’t been well established globally. If the laws and regulations remain vague as they are now, in the future, the CBD industry will be more complicated for entrepreneurs to handle. It will affect how international investors and business owners will deem this sector as an option.
Despite all the barriers and challenges, North America and Europe are producing 75% of the CBD products worldwide.
Therefore, while choosing the best options for investing your capital, research as much as you can. A wise decision can narrow down the potential and take the edge-off of making a risky investment.
According to a recent industry report, the CBD industry may see changes in five different areas. They stated in their prediction that there are going to be fewer brands in the future. Higher standards regarding the cultivation and production of CBD oil may cause a massive drop in CBD companies during 2021. Besides, they also mentioned that the FDA is going to impose more regulations, and the laws will be stricter. On the other hand, cannabis research will increase drastically. Diversification in CBD products will continue to grow, and more new products will hit the market. However, according to the current research and analytics, we can say that something bigger is waiting for the CBD enthusiasts, entrepreneurs, and investors.