In 2020, just two years after hemp-derived cannabinoids were federally legalized, U.S. CBD sales reached $4.6 billion. There’s every indication this will continue, with previous projections estimating anything between $15-$20 billion by the end of 2025.
New businesses are popping up as a result, their shelves stocked with CBD oils, vaping tools, and edible treats intent on grabbing a slice of this fast-growing market. For non-CBD brands there are plenty of opportunities to get involved, but many – quite understandably – have questions about the viability of a trend that’s yet to prove its full potential.
Looking briefly at fundamental changes in legislation, we use data from multiple surveys, including our new Core Plus study that digs deep in four key European markets, to show how the future’s bright for CBD, and how the commercial opportunities are far more varied than you might think.
Scientific research and financial opportunities have paved the way for CBD legislation.
To be clear, when we talk about CBD, we’re not referring to THC (the chemical in Cannabis that gets its users high). There are plenty of similarities: they’re derived from the same part of the same plant and even share the same molecular structure, but it’s CBD’s lack of the same psychoactive effects found in THC that makes it distinct.
As a result, scientific research into the benefits of CBD – not to mention the undeniably lucrative opportunity these products offer – is changing how both governments and general consumers perceive them.
Despite progress, there’s still work to be done. Writing for Forbes, Mike Sill (CEO of CBD brand Sunday Scaries) remarks how “CBD companies still have problems obtaining capital from banks and other financial services institutions.” Marketing CBD as a safe and effective substance in the U.S. is still limited by how the FDA classifies it, and there is already proposed legislation to address this.
Whatever the outcome, consumers have had plenty of time to learn about the benefits of CBD, and the floodgates are open for brands to get involved.
Consumers are waking up to the health benefits of CBD.
The jury’s still out on whether CBD is the miracle cure-all some claim it to be but if our data is anything to go by, it’s clear that consumers are well aware of its potential. In 4 European markets, just under half of CBD users say they use it regularly or every single day.
It’s not hard to see why consumers are enthusiastic. After all, studies into CBD suggest the substance can improve everything from sleep patterns and skin conditions, to minor ailments and mental health issues.
This comes at a time where consumers are increasingly enthusiastic about health and wellness in general.
We’ve been tracking this since the pandemic began; frequent exercise, alternative diets, and meditation apps are all on the up worldwide.
As a result, there’s been a noticeable shift toward alternative medicines/treatments too.
The number of U.S. consumers who use branded or generic drugs to treat minor ailments remains stable, while our data shows a distinct rise in the use of alternate remedies, herbal treatments, or vitamins and supplements – up 13% since Q2 2020.
It’s the same elsewhere in the world, with a 7% increase in the number of consumers who say they seek out alternative medicines and therapies in the same timeframe.
That’s not to say audiences have pivoted from using traditional medicine.
But it’s worth noting that increasing health-consciousness is paving the way for new treatments – CBD included.
After the onset of the pandemic in March 2020, for example, search results for CBD on Google Trends rose quickly after a brief slump. It seems that in a time of crisis, consumers were likely checking out new ways to cope.
As emphasis on physical and mental health grows, marketing CBD products will rely on both hard evidence of its proven health benefits, and positive anecdotal feedback of those who use it. Many already swear by CBD but it’s important to keep consumers informed when it comes to new medical products.
Steady consumer uptake signals growth to come.
As the legal confusion surrounding CBD changes, consumer understanding promotes greater use and awareness of these products – and their benefits.
Over 1 in 10 Americans aged 21+ use CBD products. This is a young market, where awareness is relatively low and new businesses continue to pop up fast.
As CBD becomes more accessible – and more profitable – consumer uptake won’t be far behind.
However, brands interested in CBD need to act fast if they’re to ride the trend and seize the opportunity before the market becomes saturated.
The situation is similar in Europe; just 6% of consumers in France, Germany, Spain, and the UK currently use CBD products. While they face similar regulatory hurdles to those in the U.S., progress is bearing fruit in new and exciting ways – like permitting the sale of CBD cosmetics inside the EU.
There’s even a potential benefit to these regulations, at least in markets where neighboring countries restrict CBD access. Using cannabis tourism as an example – where consumers routinely travel abroad to try it where it’s legal to do – tourist boards should consider the potential benefit legalized CBD could have in the same way.
Ultimately, further relaxation of CBD laws will not only encourage faster uptake but drum up interest from businesses too.
CBD bolsters an impressive portfolio.
CBD companies already offer a pretty wide range of products. This diversity will only increase as research brings to light the benefits of CBD.
CBD’s versatility gives it a unique advantage over other forms of treatment, with the many easily accessible ways to ingest it creating a broader playing field for brands to compete in. It’s this that enabled Kraft Heinz and Nestlé to venture into the CBD market.
Among CBD users in France, Germany, Spain, and the UK, oils are the most popular method of consumption by some margin, scoring nearly double the second-leading method of edibles.
Consumers don’t have to consume the oil directly; many recipe sites and message boards explain how to cook with it.
Brands in the food and beverage sector are already taking note of this, rolling out trial products into UK supermarket chains. As more brands get involved, expect figures for edibles and CBD-infused drinks to rise.
At the same time, there are simpler options to consider. The availability of CBD in pill form may appeal to newcomers who are unsure about recommended doses, or just prefer a more straightforward means of ingestion.
Another important avenue is vaping; brands in this sector already know the popularity of CBD vapes, with recent studies showing promising results for using the substance to help quit smoking.
Not only does our research show that vaping in the UK is catching up on tobacco smoking (16% vs. 21%) but 61% of smokers, in 4 European markets, intend on quitting/cutting back on smoking in the next 6 months.
Take the already gargantuan vaping market into consideration, and this looks like an enticing prospect for relevant businesses. Throw in the health-consciousness movement and ongoing anti-smoking campaigns, and this is a prime opportunity for CBD to grow.
Lastly there’s the subject of mental health and the market surrounding wellness products sometimes dubbed the “anxiety economy”.
CBD has long been touted as a groundbreaking treatment for mental health – particularly at a time where more people seek alternative medicines.
Studies into the accuracy of these statements are ongoing, with some reported success, but CBD’s reputation alone has given it a boost. In our data, U.S. respondents with conditions like depression or anxiety are more likely to partake in CBD use, while CBD users, on the whole, typically agree it’s important to talk about mental health.
The point is that in this growing market, CBD is well-positioned to give consumers exactly what they’re crying out for.
It’s time to take an interest in CBD.
The CBD market is snowballing. Landmark legislation and financial opportunity are paving the way for the rollout of exciting new products in convenience stores across the globe.
Moreover, it’s changing the way people think about alternative treatments.
This isn’t an argument for homeopathy, but for science-backed research into new treatments that can seriously improve quality of life for millions of people.
We’re at a point where physical and mental health are more important than ever. CBD isn’t a magic cure and shouldn’t be expected to shoulder this burden alone, but increasing use in the everyday shows the positive impact these kinds of products can have.
Whether you’re an established CBD brand or not, this is a fast-growing market with a lot to offer – and a myriad of ways to get involved.