Over the last decade the CBD market has made some huge strides forward, but, in 2019, the market has exploded.
From 2015 to 2018, Cannabidiol (CBD) product sales in the US grew an estimated 300% from $200 million to $620 million. This year, CBD sales in the US are estimated to reach a whopping $5 billion, according to a recent Brightfield Group industry analysis report.
Compared to the $200 million of sales in 2015, that’s over 2500% growth!
While the growth of the CBD market in 2019 is beyond ridiculous, experts believe that CBD sales will continue to skyrocket and reach $25 billion by 2025.
With 2020 just around the corner, here’s what we expect will happen in the CBD industry during this upcoming year.
Cannabis Legalization in 2020
Last year, hemp-derived CBD was federally legalized under the 2018 Agricultural Improvement Act; however, unclear laws have kept CBD intertwined with the legal complications of Cannabis in some states. Because of this, it’s important to also stay up to date on cannabis legalization laws overall.
From 1996 to the present day, 33 states have legalized cannabis for medical use, and 11 of those states have legalized cannabis for recreational adult use. In the remaining 17 states, cannabis remains fully illegal in 11 states and decriminalized in 3 of those 11 states. In the remaining states, the legal status is mixed or unclear
2020 will be a major voting year, and as the end of 2019 draws near, 6 states are actively pushing to get recreational cannabis legalization initiatives onto the ballot.
New York: No longer under the heat as the first legislature to tax and regulate cannabis, NY may likely feel more comfortable about voting, yes and the struggle to achieve cannabis legalization in New York will finally end.
New Mexico: On January 21, a legislative session to legalize recreational cannabis use will begin and last just 30-days. With substantial support from Gov. Grisham, New Mexico is positioned to legalize recreational cannabis use; however, many are hesitant to get their hopes up since a similar legislative session in 2019 died in the Senate after passing the House.
New Jersey: Last Monday, on December 16, the New Jersey Marijuana Legalization Amendment reached the number of required signatures and was passed and placed on the ballot. With over 62% of New Jersey residents in support of legalization, according to a recent survey from Monmouth University, combined with the major tax incentives gained by legalization, Recreational Cannabis legalization in the Garden State is a high possibility.Arizona: Arizona is on track to reach the 237,645 required signatures by the July 2, 2020 deadline and will likely appear on the November 2020 ballot. As the second attempt at legalization, following a narrow disapproval in 2016, and with clear tax incentives, legalizing recreational cannabis is the logical choice for Arizona with a high chance of getting passed.
Arkansas: Arkansas is on track to reach the 89,151 required signatures and will likely appear on the November 2020 ballot; however as a Republican-dominant state, the Arkansas Marijuana Legalization Initiative may not get the support it needs.
Florida: It is highly unlikely that the Florida Marijuana Legalization Initiative will reach the 766,200 required signatures by February 2020 and will likely not appear on the 2020 ballot
Missouri: While Missouri may still appear on the ballot if the legalization initiative reaches 160,199 signatures by May 3, 2020, Missouri voters’ support for legalization is very unclear.
South Dakota: South Dakota did not receive enough signatures to get put on the ballot in 2020.
Ohio: Ohio did not receive enough signatures to get put on the ballot in 2020.
Idaho: Idaho is on track to reach required 55,057 signatures by May 2020 and will likely get put on the ballot by November 2020.
Consumers Will Demand for Higher Lab Testing Standards and Increased Transparency from Companies
Due to a lack of consumer awareness and CBD regulations, there has been little pressure on brands to properly and thoroughly test their products. As a result, many brands will only test one out of every thousand or more units for just cannabinoid potency. This is the bare minimum of cannabis testing that will not detect a majority of the harmful compounds that can be found in cannabis-derived products and will not ensure the product is safe or pure.
As consumers become more informed about CBD, they are becoming more aware of the importance and scope of lab testing. Soon, there will be a demand for higher standards and more transparency and possibly laws regulating the production and testing of CBD products.
Diverse Phytocannabinoid-Rich and Terpenoid-Rich Blends Will Get More AttentionIn addition to higher standards for lab testing, consumers are also now becoming more aware of the many other cannabinoids and the compounding effect that occurs from using multiple cannabinoids known as the Entourage Effect
This will lead to a higher demand for diverse cannabinoid-rich and terpenoid-rich CBD blends, which brands like Joy Organics, had predicted earlier and have already introduced a variety of cannabinoid-rich blends into their products.
Industrialization and Innovations Will Lead to New CBD Consumption Methods
In addition to diversified CBD blends, as the industry continues to develop, innovation and increased market competition will lead to the development of new ways to use CBD.
Through product diversification, brands will offer more value and features to their products. This will lead to the development of new vertical and horizontal markets that will continue to bolster the growth of the CBD industry.
Consumers Will Catch On to Unethical Business PracticesIn the early stages of the CBD industry, and still, even now, there were a lot of unknown variables. Because of this, it was difficult, and even impossible, to set proper guidelines to regulate the industry as it continued to grow.
While many brands operated with integrity and maintained ethical business practices even when no one was looking, there were, and still are, many others who took advantage of the situation.
From inadequate lab testing and photo-shopped lab reports to inaccurate product labels and shady marketing tactics, unethical business behavior has been rampant due to the lack of regulatory guidelines and consumer awareness.
Now that consumers are more educated and continuing to learn more, unethical practices are beginning to be brought to light.
Increased Involvement from Major Brands and RetailersEstimated to reach a market valuation of more than $25 billion by 2025, the CBD market is one of the biggest opportunities of the decade. Of course, this has gained the attention of major brands and big-box retailers like Walmart, Amazon, and Whole Foods.
While the products offered by these mega-brands seem modest, in 2020, these brands will use their full resources to unleash a massive presence in the CBD industry.
Are You Ready for 2020?
While 2019 was off to a slow start, it’s ending much quicker than it began. In a few days, it’ll be Christmas and before you know it, the new year will begin. Based on the trends we’ve seen, there’s a lot in store for 2020 and we’re ready to take it head-on.
Do you have any predictions or insights to add to the list or any comments to add? Share your insights in the comments below, we’d love to hear from you.
Thanks for joining us and making 2019 an amazing year!