Is CBD a growing industry?
A lot of people are asking themselves if they should start a CBD company. They are inquiring whether or not their investment will be profitable, so they turn to search engines to get some answers. If you google is CBD a growing industry this is what you will read:
“Primarily driven by increasing demand for cannabidiol (CBD) for health and wellness purposes is high, the total Global Cannabidiol (CBD) Market is estimated to reach USD 47.22 Billion by 2028, up from USD 4.9 Billion in 2021, at a compound annual growth rate (CAGR) of 21.3%.”
However, if you continue to do your research, you will find out that three of the largest CBD companies in the US, have reported, “ relatively small sequential shifts in gross revenue.” The trends of CBD sales appear to be stable to close 2021.
Charlotte’s Web (CW) reported $24.8 million in revenue in Q4 2021, up 4.6% from the prior period, but down 7.8% year-on-year, from $26.9 million in gross sales in the same period of 2020. For 2021 as a whole, CW’s sales reached $96.1 million, up 1% from the prior year.
cbdMD reported $9.86 million in gross sales for the final period of the 2021 calendar year, up slightly from $9.8 million in Q3 2021, but down 25% year-on-year, from $13.1 million in Q4 2020. 2021’s annual sales of $43.5 million were down 5.2% from 2020’s full-year tally of $45.9 million.
CV Sciences’ Q4 2021 sales declined by 2.2% from the previous period, to $5 million from $5.1 million. The company’s 2021 sales total of $20 million was down 18% from $24.4 million in 2020.
cbdMD’s press release states that the FDA’s lack of action on CBD has opened the door for hemp-THC products to the detriment of the former: “This is evident in the introductions of competitive products such as Delta 8, which is now banned for sale in over 30 states and created a negative downward pressure on the CBD market.”
Delta-8, Delta-9, THC-O and others exist in a gray area in respect to its legality. Many states have moved to ban these compounds and in my opinion, hinder the CBD market.
Why do I feel this way? If you run a CBD company I am sure you have had some difficulty advertising on large platforms such as Google, Facebook, Instagram and YouTube. I can almost guarantee you have some type of banking issues. Although many banks and payment gateways do not allow Delta 8/9 THC/O, due to lack of regulation, they are being sold online anyway. Banks are coming down on all these companies and CBD companies as well. Changing banks four times in a year isn’t desirable, let me tell you.
CBD isn’t cheap to formulate when done the right way. Many companies are claiming high efficacy, infused gummies, and water solubility, which turns out not to be the case. However, they are selling these goods for much cheaper than quality CBD, again making it difficult for the more ethical CBD companies to make sales. It also causes doubt and confusion for the consumer. I've heard from many people that BD doesn’t work for them. When I asked them where they bought it, and how much they paid, their answer justified the lack of efficacy. Many times I have seen people buy CBD with no COA as well.
I feel that more studies and research needs to be done in order to regulate the CBD market. Companies should be held accountable for what they are claiming, and consequences should be implemented to weed out these types of CBD companies, no pun intended.