Affecting industries as diverse as cosmetics, food and beverage and pharmaceuticals, the exploding CBD (cannabidiol) market has generated considerable headlines, providing fodder to umpteenth analysis and forecasts. The latest one, by leading cannabis researchers BDS Analytics and Arcview Market Research, projects that the collective market for CBD sales in the U.S. will surpass $20 billion by 2024. Interestingly, this figure is a slight increase from than the recent forecast made by New York-based investment bank Cowen & Co, which estimated that the market could pull in $15 billion by 2025.
In this Aug. 31, 2018, file photo CBD buds of chocolate by Chronic Candy are displayed at the Big Industry Show at the Los Angeles Convention Center. The latest projection for this market, this time by top cannabis researchers BDS Analytics and Arcview Market Research, estimates CBD sales will beat $20 billion in the U.S. by 2024. (AP Photo/Richard Vogel, File)
The new forecast takes into account products sold through licensed dispensaries, pharmaceuticals and in general market retail, which includes cafes, smoke shops, grocery stores and pharmacies. However, BDS Analytics predicts that the majority of CBD product sales will soon occur in general retail stores instead of cannabis dispensaries. When you consider how cannabis has become increasingly integrated into mainstream society, as represented by the number of states that have legalized recreational or medical markets (33 and D.C for recreational use and 10 states plus D.C. for adult use), the BDS prognostication makes perfect sense.
But sales will continue from other distribution channels. In fact, BDS Analytics is predicting an compound annual growth rate of 49 percent by 2024 across all distribution channels. Also, they expect that the CBD market, combined with THC products, will create a total market of $45 billion for cannabinoids by 2014.
Other findings from the new study include:Today In: Lifestyle
- CBD product sales in dispensaries since 2014 have grown at an even faster rate than overall sales in dispensaries;
- 66 percent of hemp-derived CBD consumers in the U.S. agree with full federal legalization of cannabis, with 90 percent believing that marijuana has medical benefits; and
- CBD consumers are an average age of 40, have higher education, and are more likely than non-consumers to be employed full time.
Jessica Lukas, vice president of consumer insights at BDS Analytics, explained how the Boulder, Colorado-based firm cast this latest forecast. “We had to look at the landscape today, and then assess and predict where the market will go,” she said. “THC and CBD are very different with different functionality. Product forms that make sense and are very successful for THC do not necessarily transfer to CBD. Additionally, we had to strongly consider the interaction between the general market channels and the dispensary channel in assessing whether or not the availability of CBD products in the general market is incremental to purchases in dispensaries, will replace dispensary purchases, and/or will drive greater penetration and acceptance of legal cannabis.”
Estimating the size of the market by channel and category was a challenge in the data-gathering process. “Most products being sold in the general market today are in untracked channels of distribution,” said Lukas. Yet even with this problem, she is expecting many categories (food, candy, beverages, beauty, skin, etc.) will generate substantial volume across many channels of distribution. “While dispensaries and ecommerce drive the majority of cannabinoid sales today in the U.S, this shifts versus the next five years,” she added.