Analysis of the CBD Oil Market [2023 update]
The story of CBD is unique. Its rise will serve as an example of how for a quick global spread, you don’t need huge marketing backed up by big multinational companies. Thanks to the internet, which forever changed the world of commerce, the word of mouth can reach the other side of the planet instantly. And it’s the good word that made it possible for CBD to spread around the globe like wildfire.
Cannabis, which is the most widely used illicit drug, earns its fame mostly due to the psychotropic substance THC. But who could have predicted 10 years ago that CBD, the non psychoactive cousin of THC, would shoot the value of hemp to the moon?
Like smartphones slowly became a necessity in our daily lives, CBD slowly became everyone’s treat-all solution for a myriad of ailments.
In this article, we will explore how CBD jumped out of the shadow of THC and created a billion-dollar industry, we will also take a look at what the experts say about the future of CBD oil market..
CBD Oil Market Size
With the legalization of industrial cannabis (hemp) in the European Union, its cultivation was meant for industrial needs. It was grown mostly for seed and fiber, viewed by farmers like any other crop. But since the CBD regulations allowed the hemp flower, rich in cannabidiol, to be harvested, the tides have turned.
As we can see in the graph above, in Europe, hemp cultivation is exponentially increasing because of the soaring demand for CBD. In which markets is this reflected?
Market Analysis And Insights
The most valuable hemp derivative remains CBD oil.
Europe produces 1/4th of the world’s hemp, and it is also the biggest consumer of CBD products. The major upswing in hemp production shows the old continent is trying to cope with demand.
And the market for cannabinoids is just opening its doors. With minor cannabinoids like CBG, CBD, CBN, CBC.. on the rise, the popularity of hemp extracts has just begun.
Competitive Development And Competitive Landscape:
As we have seen, the hemp cultivation and processing are widely accepted in the European Union, as it can be considered part of the European heritage.
With the rise of CBD, the production of hemp skyrocketed, as everyone tried to meet the new found demand.
This can be attributed to the fact that CBD spread naturally, and simultaneously, through various companies and brands aiming for the same goal. To spread something amazing that was previously unknown to most, while still making a remarkable revenue.
Key Factors Driving The CBD Oil Market:
In a free market, competition is key. Only competition can drive healthy market growth. At first glance, CBD looks like a bear market. But, when we analyze it from a different perspective, it shows unique development potential.
Parallels may be drawn with the boom of cryptocurrencies, when something that everybody wants suddenly popped out of nowhere. Although with CBD we are not shooting for big profits in money, we are trying to profit in the wellbeing of the population!
Challenges And Barriers That Impact The Development And Sizing Of The CBD Oil Market
But it is not all roses in the CBD oil business.
While the competition is widely welcomed in an open market, the CBD market still possesses many flaws. With the lack of CBD regulations, the industry can do whatever it wants. Many CBD companies are taking advantage of this situation, and the consequences fall on the CBD consumer. Mislabeled, untested, and overpriced products are the biggest plague of the CBD market. Such practices of which the only goal is a quick buck, are putting a bad image on the entire CBD industry.
Nn the other hand, too much regulation or straight out prohibition on CBD products is applied in some countries, which do not allow aspiring entrepreneurs to reap the benefits of the CBD demand, nor do they allow the general public to legally enjoy the many benefits of the CBD oil, which leads to consumers turning to the gray and black market for CBD.
CBD consumers are again the victim, but this time they are exploited by the gray and black market.
With the supply of demand already being established in the market, the lack of reasonable laws and regulations is the biggest barrier to the CBD market growth, as companies and investors with major capital available are reluctant to enter the business, which is either tainted by charlatans or in which they risk legal trouble.
Market Opportunities And Threats
The CBD market is a challenging one! In a way, it can be said that there are high-risks and high rewards. Nobody can really predict how CBD regulations are going to be applied in the future. But as CBD is already widely accepted by the general public, something good like this cannot be simply taken away!
There are still plenty of open questions regarding CBD regulation in Europe, however things seem to be moving in the right direction, with the EU authorities recognizing the extraordinary benefits of CBD.
CBD Industry Growth
The growth of CBD market so far has been exceptional. The European CBD market is expected to reach €2.6 billion by 2026, which is an extraordinary number.
Even though the legal regulation is still not always clear, we are seeing good signs in the industry. For example, more and more companies are embracing strict standards of production and quality control testing, similar to those in the pharmaceutical industry. The recent changes to the EU agricultural policy also mean that the European producers will have access to a wider variety of hemp to produce their CBD oil from, which means that the variety and quality of products is set to increase.
Especially when considering the pharmaceutical industry taking foot in the market, billions become pennies. The takeover of GW Pharma, which was acquired by the Irish company Jazz Pharmaceuticals for 7.200.000.000$ in the second quarter of 2021, shows the real economic potential of CBD and cannabis.
Lorenza Romanese, the managing director of the European Industrial Hemp Association (EIHA), predicts that the question of THC limits in EU food has a high chance to be solved soon. However the novel food saga has still not been resolved – there are however numerous pending applications in the, EU, UK and Switzerland, with numerous stakeholders involved in the process. We at Essentia Pura are certain that tThe UK CBD market forecast is a tough one! With the Brexit drama final over, the UK is now free to make its own regulations. The CBD market in the UK is growing through a difficult transition, the novel food authorization is still not over and the major pharmaceutical and cosmetics players are so far staying out of the market.
If you are considering entering the UK CBD oil market, this might be the perfect opportunity to start – the market is still not consolidated, so this means that new companies can differentiate themselves and gain an advantage in 2023!he novel food decision will benefit the consumers in the EU.
With the novel food process for CBD passed, the real breakthrough of CBD and hemp is yet to be seen!
Essentia Pura’s Analysis of the EU CBD Oil Market
Another recent victory for EIHA and the European CBD industry shows that CBD is moving in the right direction – this is the liberalization of regulation in the CBD cosmetics market. CBD was recognised as safe for adding to cosmetics, and thus increasing the requirement for organic CBD oil. This decision has definitely provided a much-needed impetus to the CBD cosmetic industry.
CBD Oil Industry Trends
The CBD industry is fast and ever-changing. It is not exactly a survival of the fittest game, but adaptability and anticipation are obviously very important.
The data on CBD consumer demographics are important when we try to predict future CBD trends. As we can see in the chart below, there is not much disparity in age groups when it comes to CBD consumption. On the other hand, this means the CBD market can cater to everyone, no matter their age!
Even gender-wise, CBD usage does not vary much. But it makes sense to evaluate how we are going to position our brand and product, taking gender into account. CBD cosmetics will definitely benefit more from a female audience. And target products like CBD vape to male audiences. The CBD vape industry has seen an increase after the good outcome of KanaVape ruling in November last year, which was seen as a big victory by the sector. Be sure to also give a check about the current legal status of CBD in various countries of the European Union on our blog.
Check the chart below to find out more about the trends in CBD vaping:
CBD pet products are becoming more popular every year. Especially with CBD for dogs, a market has formed on its own. With a projected 40% annual increase for the next years, see what kind of CBD pet products are trending right now on the chart below.
Essentia Pura’s Analysis of the UK CBD Oil Market
The UK CBD market forecast is a tough one! With the Brexit drama final over, the UK is now free to make its own regulations. The CBD market in the UK is growing through a difficult transition, the novel food authorization is still not over and the major pharmaceutical and cosmetics players are so far staying out of the market.
If you are considering entering the UK CBD oil market, this might be the perfect opportunity to start – the market is still not consolidated, so this means that new companies can differentiate themselves and gain an advantage in 2023!
CBD Insider’s Analysis Of The US CBD Oil Market
The in-depth review of consumer trends in the US shows the demands of American CBD users. The US is till without any doubt the biggest CBD market in the world and it is expected to remain so in the foreseeable future.
The market is fueled by scientific discoveries and by ever increasing awareness about the therapeutic and medicinal benefits of cannabidiol (CBD). The market is set to further grow and reach 6.77 billion in 2032. The EU has a lot of catching up to do, if it wants to keep pace with its US counterparts!
Opportunities For CBD Businesses In 2023
Hemp is on the rise, there is no doubt about that. Food, beverage, textile, automotive, pharmaceutical industries, and others are eyeing this forgotten plant with unique potential.
Everywhere around the world, entrepreneurs are trying to catch the buzz and get ahead of global competition. Governments are trying to establish a legal framework to ensure the safety of CBD products, while also trying to maximize the revenue from taxation of CBD products.
At the end of the day, it’s still like every other market, where supply and demand dictate the tides of the economy. It is just that the fresh and unique CBD market has its own quirks. Being a new industry, it’s not about the companies being greedy and pushy. It is just about exploring the demands of everyday CBD users that have not formed yet.
There is no blueprint on where, when, and how to position your new or existing CBD business in 2023 and in the future. What we know for sure, is that there are plenty of opportunities and a lot of room to grow. And we also believe that in the long run, quality and transparency will win the customer’s favor.