The landscapes of CBD markets continue to evolve and shift drastically quarter by quarter. For consumers and investors alike, certain sectors of the industry present too much uncertainty, and even dishonesty. To get the most out of your investment, whether it’s a single product or a piece of a CBD company, you need to know the state of the market.
In this article, we explore where the industry stands currently and where it’s poised to go. Forbe’s predicts the market will surpass a jaw-dropping value of $20 billion by 2024. And to navigate this trajectory, we use hard science as our compass. Too many companies use hype as the engine for their marketing, and we will help you see through the illusions.
Continue reading to learn where the true gold of the CBD market is buried, and where fool’s gold is offered in its stead. And more importantly, we’ll teach you how to tell the difference.
Table of Contents
- The State of the CBD Market
- Remaining Questions of Legality
- Promising Trends in the CBD Market
- A Breakdown of the CBD Industry’s Sectors
- CBD Products: Rising Stars and Failed Projects
The State of the CBD Market
In 2021 it is safe to say that almost everyone has heard of CBD in one form or another–a remarkable benchmark considering that just a few years ago CBD was largely considered illegal and was only a business interest for bold risk takers and those already positioned within the medical marijuana market.
Today though the market has opened its pearly gates and accepted all of those with a strong vision and stronger business model. With a vast network of hemp farmers to grow the crop and CBD refineries to produce the cannabinoid, there is enough supply to fuel seemingly endless demand–both on the end of the consumers and on the end of prospective business ventures.
The CBD market continues to demonstrate explosive growth–year after year.
By 2028 the global CBD market is set to reach $13.4 billion according to Grandview Research, a whopping sum that has even hardened detractors of marijuana industries turning heads. What this means is that there has never been a better time in human history to be a lover of CBD products, to be a consumer of the CBD market.
The reverse is true however, for prospects of business ventures in the industry. The industry is crowded with new companies vying for consumer attention and more crowded still with quality products, which is forcing venture capitalists to get creative in their value propositions, to develop something new and imaginative that cuts through the crowded landscape of wonderful CBD products.
Remaining Questions of Legality
Despite ubiquitous CBD products lining the shelves of major stores around the world, there are some lingering legal concerns in America–those primarily rooted in a legal grey area, which may or may not have an answer. So where is this grey area exactly?
The largest and most notable area of question is that of full-spectrum CBD, that is, products which contain the full spectrum of hemp’s cannabinoids–dozens of non-THC cannabis compounds. While a tremendous body of research demonstrates the usefulness and safety of CBD, there are countless cannabinoids that have yet to be studied in a clinical setting, which is driving the FDA to take notice.
Will the FDA take action and change the marketplace forever?
While the FDA has yet to take any real action, they have demonstrated an awareness that many companies are falsely representing the benefits and capabilities of their CBD or full-spectrum products. Making medical claims about a new type of product marks a trail into muddy water for any industry, but it is particularly risky in the case of the cannabinoids market where countless companies have built products around their proclaimed benefits.
When dealing with a large and popular product, the FDA is notorious for making highly aggressive and sudden sweeping changes in what might be called scorched earth tactics. This is what has investors and legal analysts concerned.
Waiting for the other shoe to drop…
The FDA has demonstrated their awareness of issues in the marketplace, and what comes next–many expect–is for a nuclear bomb to be dropped on the current model of business. This might entail regulations of any cannabinoid of a certain concentration, which would be detrimental to businesses whose products offer value in the strength of their formulas, or some other form of oversight which potentially squeezes out middle to lower tier business operations. But analysts expect the bulk of regulation to target marketing and production specifically.
Stringent FDA regulations on CBD processing facilities and operations currently present notoriously challenging situations for both new and existing companies looking to scale operations. With the threat of unknown regulations on the horizon, finding investment in the CBD industry presents more of a challenge than one would expect in a new market worth billions.
Promising Trends in the CBD Market
But it is not all doom and gloom. Fact is that the CBD market has never been in a better or safer position, and chances are that the FDA will not move on the CBD market specifically, but rather a sub-sector of the market where more problematic behavior occurs. And let’s face it. Time and time again we have seen in the American economy that some things just simply become too big to fail.
And a global market of $12 billion sounds just about big enough to tip the scale in the market’s favor. But size alone is not all that the market has to offer. There are countless new products and projects that present undeniably strong value propositions–from new methods of processing CBD to new types of delivery technology which might amplify effects without increasing doses.
Let’s break down some of the most promising trends.
- Nano CBD – Technology that coats the CBD molecule in microscopic particles such as liposomes or lipid nanoparticles (LNPs), which work to stabilize the CBD and thus make the CBD molecule more efficient at entering the bloodstream and reaching its intended target (Weedmaps.com). This technology also opens the door to a new group of products such as CBD waters, teas, and other drinks.
- CO2 Extraction – Technology that uses pressurized carbon dioxide (CO2) to separate the phytochemicals from the plant in a safe and effective process that results in a pure extract. The technology is divided into super-critical CO2 extraction, sub-critical, and mid-critical categories.
- Oil Extraction – Consumer-oriented technology which allows someone to extract CBD and other cannabinoids from hemp at home. This process involves soaking the herb in the oil at a high temperature for an extended period of time, which yields a cannabinoid oil in the end. Many companies are selling products that streamline this extraction process.
- Smart Farming – Technology which improves the crop-farming process by streamlining each step of the process and hyper-regulating variables. The end result is a highly productive and efficient farming operation that produces the highest quality products, which takes some of the pressure off of the processing end.
- Artificial Intelligence – Big Data is revolutionizing many different industries and the CBD industry is no exception. Analytics firms are using AI to optimize our understanding of industry data: how people use CBD and why, how to optimize delivery methods, and how to improve peoples’ understanding of CBD. As a whole, this just means that the industry will be more adaptive and effective in serving consumers.
- Blockchain and CBD – Another ‘trendster’ topic of the day is blockchain and crypto-currency, and you might be surprised to learn that the CBD industry is incorporating blockchain technology to optimize supply chain operations. By decentralizing supply chain data, buyers and suppliers are able to anonymously supply prices for seed or delivery, allowing companies to easily select a bid without the traditional bidding wars that truncate supply chain operations.
A Breakdown of the CBD Industry’s Sectors
While consumer portions of the industry pump current growth trajectories, the nuance of the CBD industry drives its expansion and staying power. Because CBD production is directly tied to industrial farming operations, which in turn feed pharmaceutical operations, the industry’s success rides on a multifaceted dynamic which helps to mitigate any downturns in one specific sub-sector.
In 2018 when the meteoric popularity of CBD overwhelmed the farming and processing side of the industry, the sheer demand for these products served to mitigate the titanic waste and losses. Some analysts estimate around $2 billion in hemp crops were lost due to the processing bottle neck of the time.
Similarly, while there is no reason to expect a waining in consumer interest or demand, the expanding sector of research and pharmaceuticals works to counterbalance the ebbs and flows of adjacent markets. With some research groups demonstrating promising work in using cannabinoids for a variety of chemical compounds and even biofuel, many believe that we have yet to see the full scale of applications for cannabinoids.
A bird’s eye view of the CBD industry
Essentially, the CBD industry can be broken down into three major markets:
i.) Consumer Markets
ii.) Farming and Industrial Processing Operations
iii.) Pharmaceuticals and Research
The bulk of information in circulation covers the first of these markets, the consumer-oriented sector of the industry. Because the other two markets are largely dominated by proprietary technology, non-disclosure agreements, and unannounced projects, it can be easy to miss the sheer scope of the CBD and larger cannabinoids markets due to a resulting lopsided coverage.
Half of the picture, half of the story
This is also why financial analysts struggle to accurately map the growth of the industry, because crucial factors of prediction are gated behind privileged knowledge that cannot be made public. Attempts at unveiling such knowledge in public media forums have been forcefully redacted in several instances.
As such, the CBD and cannabinoids industry represents an enigma of sorts where no one person or group is fully equipped with the knowledge needed to grasp its scope–and if they are, they are unable to share their vision. Suffice to say that we have many surprises in store when it comes to cannabinoids and technology.
CBD Products: Rising Stars and Failed Projects
So let’s turn knowledge to actionable advice. The CBD market is congested with new and amazing products that maybe are not all that new amazing. Unfortunately the monetary proposition of the industry has drawn to it some characters of all shades–ranging from the bright hues of benevolent capitalists to the dark and shadiest of shady.
But fear not, because this section will help you to differentiate between the Harry Potters and the Voldemorts of the CBD industry. And just so you know how to identify some red flags, we will also highlight some of the industry’s horror stories–both on the business side and the consumer side.
And for full transparency, here is the methodology by which we evaluate the brands and products:
Brand Transparency / Narrative: This day and age, people like to know who they are buying their products from. As such, we have valued companies who have a strong and honest brand narrative with a transparent process. If we don’t know how the product is made or where it comes from, they didn’t make the cut.
Value Proposition: There are many forms of value proposition, but in this context we mean “what does the product offer?” Is it the cleanest form of CBD extraction, or the highest concentration of CBD, or maybe a rarer form of delivery like CBD donuts. If its the run of the mill CBD oil, it will need some strong elements to distinguish it from the pack.
Customer Service: In a crowded market with high demand, many companies forego customer service for an easy buck. The products and brands below offer a level of care and support of customers that distinguish them in the industry.
Company History: While there are certainly rising stars that are making a reputable name for themselves , we have weighted companies that have demonstrated their values and successes over a long period of time. If a company is new and it is listed, it is because the team has demonstrated prolific success and adherence to values.
Product Type: To add an additional element of fairness, we will categorize products by category. For instance, some companies excel at producing topical products, some at producing gummies, and other at producing oils. We will evaluate them accordingly.
The Best Brands and Products of the Industry
Charlotte’s Web
When it comes to reputation and sheer staying power, Charlottes Web is one of the most dominant forces in the entire cannabinoids market. This company built its foundation aggressively very early on–the Stanley brothers worked with a CBD researcher named Charlotte Figi to launch the company back in 2011 when there was still turmoil around discussions of legality and health benefits.
Today, Charlotte’s Web is the preferred destination for thousands of hemp enthusiasts looking for hemp extracts, oils, or gummies. Additionally, Charlotte’s Web offers a robust affiliate program that provides opportunities for hobbyists and serious salespeople alike.
Lazarus Naturals
Whereas Charlotte’s Web represents one of the oldest and most reputable companies on the market, Lazarus Naturals demonstrated a more recent rise to popularity (starting in 2014). Unlike other companies, Lazarus Naturals built its reputation quickly by focusing on fewer high quality products such as the company’s high-concentration full-spectrum hemp oil extracts–which offers some of the highest and purest concentrations of cannabinoids on the market–as well as cannabinoid capsules and topical balms.
Lazarus Naturals has also earned a name for itself by adhering to strong values of service, quality, and equality. This is further evidenced in their assistance program, where the company offers up to a whopping 60% off products for individuals on long term disability, veterans, and individuals living below the poverty line. Customers of Lazarus Naturals are loyal and promote the usage of these quality products by word of mouth.
NuLeaf Naturals
While Lazarus Naturals is known for its highly concentrated formulas, NuLeaf Naturals built a name for itself by offering some of the most pure products on the markets. With zero additives and zero additional ingredients, customers know that they are purchasing a product made from hemp and nothing else. NuLeaf also controls both the farming and manufacturing process, so they are able to monitor the process from the field to the warehouse. The company seems steadfast in its mission to help people conquer health issues through these high quality, pure products.
The company has also put its mission above its profits, which they demonstrated through earning the following certifications: Leaping Bunny, USDA Organic, and the B Corp certification. NuLeaf Naturals sets its self apart by offering a level of quality and transparency that is rare in an industry with so much opportunity for profit.
Failed Projects and Red Flags
In 2019 the FDA began aggressively targeting companies that sold sub-quality products or made untruthful claims about their products. And in the years since, the market has grown even more crowded, which unfortunately provides cover for shadier operations and even outright scams. So that you can make the best decisions when interacting with the CBD market, let’s look at some of the most important red flags and warning signs of which to be wary.
Third-Party sellers with poor review scores
One of the ways that scummy companies get away with selling subpar products is by funneling them through third-party websites at tremendously “discounted” rates. If you purchase one of these products you are unlikely to receive the advertised formula, and could even end up in danger. Over recent years more consumers have failed drug tests for THC due to faulty or dishonest hemp extract formulas.
New companies with outrageous claims
While there are certainly advances being made in the science of hemp and CBD, one should be wary of any company making outlandish claims about “scientific breakthroughs.” The field of CBD science is established enough that even if a smaller company made some breakthrough, we would likely all hear about it. Many shady companies open up an online store with very little information and run aggressive marketing campaigns based on erroneous data.
Be sure to always check how long a company has been around. And if you are interested in a newer company, be sure to do your homework to see if they are an honest operation.
Prices that are too good to be true
A common link between most scams and shady companies is that they offer prices that are too good to be true. Fact is, the larger and more successful CBD companies have been around long enough to fine tune their operations and reduce production costs and therefore offer fairly affordable rates. Some companies are able to beat these prices in certain contexts, but only by a small margin.
If you see hemp extract products at half-price or better, chances are there are things going on behind the curtain that would make you remove said product from your considerations.