If you haven’t heard about the rise of the hemp economy you may have been living under a rock. Consumers of all types are driving up demand so now is the time to consider investments in the production and processing of hemp into CBD oil.
1. Explosive CBD Market
The CBD market grew by 57% in 2018, according to the Nutrition Business Journal Hemp & CBD Guide(NBJ). In the study, the NBJ found 73% of natural and organic product manufacturers surveyed are expanding their offerings to include CBD products. The NBJ's study shows 65% of natural and organic product manufacturers expected to launch new hemp-derived CBD products in the next few years.
Many companies are taking notice of the opportunity, including Kroger. The company announced it will sell topical CBD products in 945 locations in 17 states. The nation’s largest grocery retailer joins a growing list of national retailers, including Walgreens, CVS, Vitamin Shoppe and GNC, that are beginning to stock shelves with the hemp product.
2. Legal in U.S.
In what President Trump called a “tremendous victory for the American farmer,” the 2018 Farm Bill was signed into law which legalized hemp at a federal level, and allows states to have programs for growing industrial hemp commercially. The new law allows for transporting hemp across state lines, expanding export and sales options.
Although it was legal to grow hemp since 1998, producers were required to receive a special production permit from the Drug Enforcement Agency due to its relationship to marijuana. However, now there are fewer restraints of transportation on the plant and less risk for farmers and producers involved.
3. Increasingly Gaining Acceptance from Medical Community
Just as marijuana caught the medical world’s attention, CBD is not far behind. This research-backed list of CBD oil benefits includes uses for CBD oil as a preventative medicine ranging from treating anxiety and stress to reducing risk of diabetes and obesity.
A recent CNN article reports cannabidiol, the non-psychoactive ingredient in hemp and marijuana, could treat opioid addiction, a new study says. Given to patients with heroin addiction, CBD reduced their cravings for the illicit drug as well as their levels of anxiety.
Pets are also getting in on the CBD health trend. Forecasters estimate that almost 10% of CBD could soon end up in products for your furry friends, according to Bloomberg Businessweek. The CBD market could be worth almost $24 billion in the U.S. alone by 2023, with about 7% of sales coming from the pet market. Pet owners are embracing CBD as an all-natural way to alleviate a wide range of creature ailments, including pain, arthritis, and anxiety, without getting them high.
4. Hemp Textiles on the Rise
Hemp is a plant with multiple uses, especially it’s fiber. It's used mainly in clothing, construction materials, paper, and many more products. China is the world’s biggest producer of hemp stalks, with the government claiming the hemp industry to be over $200M. In a Popular Mechanics article from 1938, there are claims of about 25,000 industrial uses for hemp alone.
The National Hemp Association reports hemp has the strongest and longest plant fiber in the world, resistant to rot and abrasion. In today’s society, hemp fiber can be found in bags, nets, canvas and even carpet.
In an attempt to be more environmentally conscious, Levi Strauss & Co. just created a new clothing line that “feels just like cotton” but is made in part with hemp. Hemp requires much less water and land to grow than other materials, and its overall carbon footprint is about half that of cotton. The hemp used by Levi’s is sourced from rain-fed crops that reduce water waste by about 30 percent.
Investing in Hemp
As U.S. farmers begin to grow more hemp, there will be much room for investments into the asset. Driven by explosive growth in hemp-based consumer products, the global hemp market is expected to jump to $10.6 billion by 2025. The hemp industry is certainly something to keep your eye on for the next few years.