Market for CBD Is on the Rise

Cannabidiol (CBD) is one of more than a hundred phytocannabinoids naturally occurring in the resinous flower of cannabis. CBD does not have the same psychoactivity as Tetrahydrocannabinol (THC). CBD extracted from marijuana remains a Schedule I Controlled Substance, and is not approved as a prescription drug, dietary supplement or allowed for interstate commerce in the U.S. CBD derived from hemp (with 0.3% THC or lower) was delisted as a federally schedule substance by the 2018 Farm Bill. CBD cab be supplied for consumption in various forms: CBD Oil containing only CBD as the active ingredient (with no THC), a full-plant hemp extract oil, capsules, dried cannabis or as a prescription liquid. Clinical research on CBD has included preliminary studies of anxiety, cognition, movement disorders and pain, as well as for epilepsy.

In America, the Marijuana Tax Act of 1937 had the practical effect of stopping the growing of hemp, although hemp had been used for centuries as a source of fiber for use in ropes and other materials. Later, the Controlled Substances Act of 1970 listed hemp, as well as marijuana, as Schedule I level narcotics due to the presence of tetrahydrocannabinol (THC). The legalization of certain uses of marijuana on the state level in several U.S. states in recent years, plus the federal 2018 Farm Bill, brought the hemp industry back to life. The Farm Bill acknowledged that hemp contains only tiny amounts of THC. The 2018 delisting of cannabidiol (CBD) as a controlled substance by the U.S. government has helped to create potential for a growing market for a number of CBD products.

Similar delistings or legalization of CBD and marijuana in the past few years in Canada and in other European countries has created a situation with great potential for the production and distribution of CBD oil and other CBD products internationally. CBD does not have the psychoactive effects of marijuana, as it contains only trace amounts of THC, which is a powerful agent found in large quantities in marijuana. CBD is thought by some people to have anti-inflammatory and calming effects, on both people and pets. While the CBD market in the U.S. looks set to continue to rise, some caution should be taken when evaluating the potential: many of the purported health benefits of CBD oil are not clinically proven, and the FDA is likely to order some firms to cease making unproven health claims.

The FDA approved an anti-seizure drug called Epidolex, which contains CBD. Formal clinical trials are underway studying the potential effectiveness of CBD for a wide variety of conditions, with a particular focus on epilepsy. The completion of such trials and formal FDA approval of related drugs typically requires several years.

In the U.S., market estimates on CBD products vary. Brightfield Group reported CBD sales of $5.3 billion in 2021, up 15% over 2020. The firm expected 2022 sales to drop slightly, reaching $5.0 billion, but further forecasted sales to grow to $11.0 billion by 2027. The 2018 removal of CBD from the controlled substances list not only opened the door to CBD products but also provides participants in this industry with legitimate access to banking, social media and traditional advertising, as well as partnerships with larger organizations. Rapid growth in CBD products may extend into a number of industries. Meanwhile, CBD consumer products have gone mainstream, and are now available in many major supermarkets and drug stores.

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