The Growing Industry of CBD Oils

Is Starting a CBD Oil Company a Good Business Idea?
April 24, 2019
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Over the past few years, cannabis has taken front and center in the news and in business. The public is becoming increasingly interested and informed about it – from its legalization status on the state level or even in other countries like Canada – to its health benefits, investment opportunities, and so on. More information is coming out, more studies are being done, more entrepreneurs and investors are taking a chance and most importantly – the consumer base is growing at breakneck speed; and when a consumer base grows, so does the industry.

CBD Legality

With the 2018 Farm Bill expanding on hemp cultivation, more specifically allowing the cultivation broadly and legalizing the transfer of hemp-derived products across state lines for commercial or other uses, it drew even more attention from the public and from interested parties looking to launch their own line of CBD products. The new law also removes restrictions on the transport, sale or possession of hemp products, as long as they were made in a law abiding manner. Since this new law hit the headlines in 2018, it bust the already loose door wide open, officially making the movement towards a flourishing CBD product based industry a true gold rush.

Products that are hemp-extracted are now considered legal by the federal government, provided it is produced using industrial hemp. The THC levels are required to be below the legal limit of 0.3% in any CBD oil products to check out as being safe to sell commercially.

Why is CBD so attractive to both sellers and buyers alike?

For consumers, the reason behind the hype is the “having your cake and eating it too” perception of the substance. Basically, it offers all the health benefits that cannabis is known for (a treatment for chronic pain, an antidepressant, having antipsychotic properties, among many others) without the controversial, and to many consumers, undesirable, “elevating” or “altering” effects that get you high – and now, without the complicated or vague status of its legality. The non-psychoactive cannabinoid CBD is the hero to the often villainized THC compound that gives cannabis the bad rap. And with the 2018 Farm Bill, things have become more clear for hemp derived products.  

Another element that is attracting more and more consumers is the movement away from big pharmaceuticals and synthetic chemicals, and a movement towards naturally derived remedies with more transparent production methods – sourced and made in the U.S.A. is another perk for buyers who are big on keeping their spend domestic.

For sellers, first of all, the consumer base has never been hotter than it is now, with demand growing so rapidly, the trajectory for the market looks sky high. The market is projected to go from $688 million in 2016 to $1.8 or $2 billion by the year 2020 – and that’s just in the U.S. And as regulations become more relaxed and movements in legislature seem to promise much more leaps and bounds in the near future towards an even more free market, entrepreneurs and movers and shakers in the production and supply chain take their positions on the starting line, ready to go once legislature says go. Second, the wide open world of different applications and uses of CBD products, whether cbd oil or cbd isolate based, makes it a wildly versatile vertical to explore. CBD is being used in everything from topical oils for cosmetic uses to tinctures, to gummies, creams, even pet products and so much more. The different types of products grow exponentially almost daily.

Opportunity Analysis: An Opportunity to Heal  

With pain, ailments, diseases and addiction reaching a fever pitch in the U.S., many supporters and proponents of CBD oil argue that there is no better time than now for the CBD oil industry to race to the forefront. For one, the declaration of a national emergency due to an opioid crisis demonstrates the gravity of addiction in America. In 2015, 20.5 million Americans over age 12 had substance abuse disorder and 52,404 americans died of drug overdose according to the National Substance Abuse and Mental Health Services Administration reports. CBD has been shown to help by lowering likeliness to relapse or exhibit drug-seeking behaviors. Positive effects have been shown to last long after CBD leaves the system.

For chronic pain, something 40 million americans experience in the U.S., with 25.3 million dealing with it daily, CBD has been shown to help relieve and/or reduce the pain associated with damaged nerves, rheumatoid arthritis and cancer as well as harsh cancer treatments like chemo. It also may help reduce the other side effects of chemotherapy like nausea and vomiting as well as migraines and motion sickness.

More ways CBD oil may heal is in the realms of anxiety and depression – something over 40 million adults have been diagnosed with in the U.S. One of the ways CBD interacts with the brain is to stimulate/increase serotonin, one of the most common neurotransmitters in the human body. The effects of this include inhibiting fear and anxiety, limiting cortisol – the stress hormone – control blood pressure, regulate the  human growth hormone and moderate oxytocin – the happy hormone. CMB binds with serotonin receptors to trigger these effects. Low serotonin is caused by stress which results in a cycle of anxiety and disrupted sleep. CBD can help to reduce stress, reduce social anxiety and treat depression.

These are just a few of the most common ailments and afflictions CBD oil can be used to remedy. The opportunity analysis for this market is aligned with these common maladies, making it’s demand and the potential for its growth and positive virtually effects limitless.

CBD Oil is Positioned to go Fully Mainstream

CBD oil use is already a buzzing topic in the media and business circles; now it’s quickly permeating social and trending topics as well. It was reportedly used backstage by Melissa McCarthy at the Academy Awards to alleviate foot pain due to high heels; CBD oil even made an appearance in this year’s Oscars’ gift bags. As CBD’s healing properties continue to saturate popular culture and conversation, its status as a legitimate health and wellness product is solidifying quickly as the new norm. Even major retailers such as Sephora are clearing shelf space for CBD oil products. As the CBD market grows, we expect to see this as the new sector in the beauty and wellness space that is here to stay.

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