There has undoubtedly been a surge in the popularity of cannabidiol (CBD) over the past few years. While some have unduly contributed the hype by pushing unfounded assertions that CBD can be a miracle cure, this non-intoxicating component — which is found in both the cannabis and hemp plant — does in fact have some research-supported therapeutic properties.
In a new report from the Brightfield Group, it appears that the excitement around CBD is on track to build up to a $22 billion market by 2022. For context, the Arcview Group recently predicted that the entire cannabis industry would reach the $32 billion mark by the same year.
One factor driving up CBD’s stock is the U.S. Food and Drug Administration’s recent approval of the first-ever cannabis-based drug (Epidiolex) to be marketed in the United States for children with certain forms of this debilitating disease. This medicine, which is expected to hit the pharmaceutical market in the coming months, is simply a CBD solution processed from the cannabis plant.
However, the Brightfield Group’s report focused most of its attention on hemp-based CBD, whereas Epidiolex is composed of CBD derived from cannabis. Given that many consumers remain uneducated on the differences between hemp-based CBD and CBD from cannabis, the distinction between these two products makes valuing the size of the CBD market quite complicated.
Hemp-Derived CBD vs. Cannabis-Derived CBD
CBD from hemp and CBD from cannabis are two completely different products. While cannabis-based creations typically contain 20 percent CBD along with a small amount of THC, the hemp-based stuff usually has only around 3.5 percent CBD. These hemp-based CBD products are the products, claiming to be legal in all 50 states, that are now starting to show up in 7-Elevens and various truck stops around the country, as well as online.
Nevertheless, the Brightfield report claims that the hemp-derived CBD market is expected to experience the most growth in the next few years, based largely on the expectation that the 2018 Farm Bill, which is being aggressively pushed by Republican Senate Majority Leader Mitch McConnell, is going to make it through Congress this year and be signed into law. If this does in fact happen, the decades-long ban on industrial hemp production in the U.S. would be lifted, giving farmers all across the nation have the opportunity to start growing this versatile crop as part of their plow and pick repertoire. A move of this magnitude would “clearly and unambiguously legalize hemp as well as its derivatives, extracts and cannabinoids, including hemp CBD,” the report reads.
Farmers in states like Indiana, struggling to make ends meet with traditional cash crops like corn and soybeans, say industrial hemp production could be the only way they stay alive. So the Farm Bill is perhaps one of the most important pieces of legislation of the 2018 session.
Even if McConnell’s hemp dreams are not realized through the passing of this legislation, researchers at Brightfield predict, “a similar Hemp Bill will… pass after the 2018 elections.” One way or another, the report asserts, hemp is set to once again become America’s hot crop.
If the bill passes, however, states would not be required to create hemp programs. They would simply be given the freedom to move forward if they so chose without violating any federal laws. And not all states have embraced hemp-derived CBD. For example, California, which is host to the largest recreational marijuana market in the country, recently banned hemp-derived CBD. The Golden State wants nothing to do with it “until the FDA rules that industrial hemp-derived CBD oil and CBD products can be used as a food or California makes a determination that they are safe to use for human and animal consumption.”
Ohio regulators also recently banned hemp-derived CBD, following similar logic.
Skepticism Surrounds CBD Report
Since the FDA approved Epidiolex, the DEA is being forced to reschedule the CBD compound within the medication, which would eliminate it from its Schedule I classification of “no known medical use” and open it up to additional market possibilities. But Uncle Sam’s dope henchmen are sneaky little worms. While the DEA has until September 23 to reschedule CBD associated with Epidiolex, some experts are saying that the agency is likely not to change anything with respect to CBD itself.
“There is a misunderstanding that cannabis or CBD will be immediately rescheduled, but that is not the case; it will be Epidiolex itself,” attorney Shawn Hauser, senior associate with Vicente Sederberg LLC and director of the Denver-based law firm’s Hemp and Cannabinoid Group, told New Frontier Data. “What is getting scheduled is the Epidiolex itself, pursuant to the new drug application, relating to its medical efficacy and low potential for abuse. That will inform the federal law for the future. Marijuana is still a Schedule I substance; CBD is not scheduled itself, but as a substance derived from marijuana.”
A recent analysis from Forbes suggests that the CBD market forecast made by the Brightfield Group is not “necessarily accurate” and “slightly misleading” due to its failure to consider that some states would opt out of the hemp trade or impose strict regulations on hemp-based CBD products. The article goes on to say that the “research seems to appeal to what their subscribers want to hear by presenting the best case scenario forecasts for the hemp-derived CBD industry.”
Another report published earlier this year by Hemp Business Journal, a division of New Frontier, shows the U.S. hemp market is expected to grow 700 percent within the next few years and generate $2 billion in sales by 2020 — about $20 billion less than what the Brightfield data predicts.
Right now, hemp-based CBD is worth an estimated $591 million in the United States.
Many cannabis advocates believe the time has come to tone down the hype surrounding CBD and starting pushing the therapeutic benefits of the entourage effect (all the components of the cannabis plant working together). This is even true in the case of epilepsy patients, whereby most of the country has been led to believe that CBD alone is the medicine these people need to stop seizures. But several studies have shown that THC, the compound that produces the herb’s stoned effects, is just as effective at preventing these fits. The overall message here is: If a person thinks they are receiving some medicinal benefit from hemp-based CBD, they should try seeking out products made CBD derived from the cannabis plant itself.
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