Global Hemp/CBD Market

These days, at least 47 countries cultivate hemp for commercial or research purposes. The largest producers of hemp are currently Canada, China, Chile and France whereas the USA is the largest importer of hemp products, receiving most of its seed and fiber from Canada and China, respectively.

The North American market dominated the global CBD oil market in 2016, followed by EMEA and APAC. The global CBD oil market is expected to grow at a CAGR of 39% during the period 2017-2021 (“Global CBD Oil Market 2017-2021”).

Cannabidiol (CBD) is one of the numerous compounds found in the cannabis plant. CBD oil can be obtained from two different species of cannabinoids: marijuana and hemp, which come from the same plant species called Cannabis sativa. Hemp-based CBD oil products have a lower delta-9 tetrahydrocannabinol (THC) concentration, while marijuana-derived CBD oil products have a relatively high concentration of THC.  Therefor, marijuana-based CBD products can be used only when they are prescribed by doctors while hemp-based CBD oils do not normally require a prescription.

CBD oil products have several benefits. They are known to cure various ailments in the human body. Over the years, the demand for CBD oil has increased in different parts of the world because of the growing awareness about the health benefits of CBD oil.

The latest trend in the market is growing influence of online retailing. The increasing popularity of e-commerce businesses worldwide has granted vendors with an opportunity to enhance their profit margins and revenues. E-commerce reported for nearly 15% of the global retail sales in 2017. Online and e-commerce channels support both business-to-consumer (B2C) and business-to-business (B2B) operations.

U.S. Hemp/CBD Legalization

Hemp

America was the world’s leading importer of hemp, partly because federal law prohibited U.S. farmers from growing it. In June 2018, the U.S. Senate passed its 2018 Farm Bill, including provisions to make hemp legal for the first time since the 1930s. In December 2018, President Trump signed the bill into law. The bill removes hemp from the Controlled Substances Act, effectively legalizing the plant federally and allowing it to be grown, processed, and sold as an agricultural commodity. Individual states are authorized to draft their own regulations governing hemp cultivation.

CBD

In all, 32 U.S. states allow licensed sale of medical marijuana, which includes the use of CBD oil. Ten states permit both legal and recreational marijuana sales and consumption. In some U.S. states, CBD is treated as its own substance. There are four states that completely outlaw CBD: Idaho, Kansas, Nebraska, and South Dakota.

In September, 2018, the U.S. Drug Enforcement Administration announced that certain drug products that have been approved by the Food and Drug Administration (FDA) and which contain cannabidiol (CBD) will be considered Schedule V drugs. Specifically, this order places FDA-approved drugs that contain CBD derived from cannabis and no more than 0.1 percent tetrahydrocannabinols in schedule V.

The farm bill completely removes from the drug schedule all hemp plants and derivatives with much higher THC levels, 0.3 percent.

U.S. Hemp Industry

The Hemp Industries Association (HIA) reported total U.S. retail sales of hemp products of nearly $700 million in 2016. HIA claims that U.S. hemp retail sales have increased by about 10% to more than 20% annually since 2011. Much of this growth is attributable to sales of hemp-based body products, supplements, and foods. Combined, these categories accounted for more than two-thirds of the value of U.S. retail sales in 2016.

Hemp Business Journal has also reviewed sales of clothing, auto parts, building materials and various other products, and estimates the total retail value of hemp products sold in the U.S. in 2017 to be at least $820 million, including hemp foods (17%); personal care products (22%); textiles (13%); supplements (5%); hemp derived cannabidiol or CBD products (23%), consumer textiles (13%); industrial applications (18%); and other consumer products such as paper and building materials accounted for the remaining 2% of the market.

Hemp imports to the United States – consisting of hemp seeds and fibers often used as inputs for use in further manufacturing – totaled $67.3 million in 2017. Although hemp imports have declined from a record high of $78.1 million in 2015, U.S. hemp imports have steadily increased since 2005 when hemp imports totaled $5.7 million.

From 2016 to 2017, the number of acres licensed for hemp cultivation in the top 10 hemp-growing states (Colorado, Kentucky, Minnesota, Nevada, New York, North Carolina, North Dakota, Oregon, Tennessee, Vermont) grew by 140% – while the number of hemp producers doubled over the same one-year period.

The number of hemp producers in Oregon, Tennessee, and Vermont more than tripled in 2017, while Minnesota, New York and North Dakota saw growth of 533%, 425% and 600%, respectively.

Of the top 10 hemp-growing states, Kentucky and Colorado accounted for 81% of total acres registered for hemp production in 2016. Though both significantly expanded their hemp programs in 2017, they now account for only 64% of total acres registered for hemp production.

Excluding Colorado and Kentucky, the average number of acres licensed for hemp production was 374 in 2016; in 2017, average hemp production acres stood at 1,787 – a 377% increase.

U.S. CBD Market

The U.S. market for the product hit $291 million in 2017 – including both hemp and marijuana-derived sources – while the hemp CBD market has reached an estimated retail value of $145 million. With hemp legalization, new methods for producing CBD oil and a realization of the benefits of CBD oil, it’s easy to understand why CBD oil will be a significant part of the cannabis industry boom. With a rising number of various CBD products available in mainstream markets, consumers are spending more on CBD products than ever before.

Analysts predicted a 55% compound annual growth rate over the next five years with the market to crack the billion-dollar mark, however, after hemp legalization, legal market for CBD is forecasted to be worth more than $20 billion by 2022, according to research firm Brightfield Group.

U.S. hemp-derived CBD sales forecast, $ billion

  • after hemp legalization
  • before hemp legalization

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