Nielsen projects the U.S. hemp-based CBD market could be a $2.25 billion to $2.75 billion industry in 2020. The projection accounts for U.S. Food and Drug Administration rulings and other possible speed bumps. The FDA on November 25, 2019, said it could not conclude that cannabidiol (CBD), a hemp extract, is Generally Recognized As Safe (GRAS) among qualified experts for its use in human food or animal food.
“While the regulatory roadmap remains ambiguous, one thing is clear: The next decade for the hemp-based CBD market has the potential to be a game-changer for the traditional CPG (consumer product goods) and retail industry,” says Rich Maturo, vice-president of cannabis practice for New York-based Nielsen.
The user bases for capsules, gummies and beverages should grow significantly this decade, according to Nielsen. If the FDAever approves CBD as GRAS, the user base of ingestible formats could grow as much as 250 percent to 375 percent in a year’s time. CBD especially shows potential in the beverage categories of coffee, functional waters, energy drinks, teas, and sports drinks, according to Nielsen, adding brick-and-mortar retail channels this decade could steal CBD share from online retailers, local specialty retailers, and vape and tobacco shops.
Educational efforts targeted to health care providers also could increase the CBD market in the 2020s. A Nielsen study found about one-third of health care practitioners were knowledgeable about laws surrounding hemp-based CBD. Among adults interested in CBD, 50 percent said guidance from a health care practitioner would motivate them to try a CBD product, according to Nielsen. CBD products could be positioned as over-the-counter products targeting arthritis, sleep, and general pain.
Production efficiencies linked to cultivation and extraction practices of hemp should bring down prices for CBD products, according to Nielsen. The number of U.S. hemp farmers will rise over the decade, and Latin American farmers should grow hemp as well.