November 2, 2020
The market for CBD is continually expanding, not just in the United States but across the world. In 2019, experts estimated that the global cbd market size was over 7.1 billion U.S. dollars. That’s up from just 4.6 billion USD in 2018.
As consumer interest in CBD continues to rise, and more manufacturers enter the market, CBD’s worldwide market share is growing. Experts predict that this trend will continue. The competition is still fierce for CBD manufacturers. Those producing the best CBD edibles may be able to stay competitive. Vendors selling the same tired products may get pushed out.
Want to learn more about the current worldwide CBD market and what to expect in the future? You’ve come to the right place.
State of the Market in 2020
According to cbd market analysis 2020 is continuing along the same trend lines as 2019. The global cbd market value grew this year to $9.3 billion, and it’s only November.
What’s Driving Market Growth?
Many factors are driving worldwide CBD market growth. More funding for cannabinoid research has produced results that support anecdotal accounts of CBD’s effectiveness as a therapeutic agent. More local and national governments are choosing to legalize CBD in some form. The negative stigma previously associated with cannabis products is falling apart under more careful consumer scrutiny.
As a result of these trends, more people than ever are purchasing CBD products. There is still at least one thing that stands in the way of CBD’s rise to global market prominence. Some governments still have stringent policies that could slow market growth. That’s changing, but not fast enough to keep up with consumer demand.
Operational Strategies
Key competitors in global CBD markets have had to adopt all kinds of operational strategies to stay competitive. They are forming collaborative partnerships, launching new products like CBD drinks, and merging with other companies. Research and development (R & D) appear to be the most productive strategy for improving market position.
The CBD oil market is extremely competitive. There has been a statistically significant rise in demand for CBD oil in recent years. However, it isn’t enough to offset the multitude of new local, regional, and national companies striving to meet that demand. Success in this competitive global market requires cost and product differentiation.
Today’s most successful CBD companies focus on product development. They know that global consumers and investors are always looking for the next big thing. Providing high-quality extracts is no longer enough. New CBD products must offer a unique value proposition.
Current Trends in Hemp vs. Marijuana-Based CBD Markets
Manufacturers can derive CBD oil and extracts from either hemp or marijuana. Currently, hemp-based products form the largest market segment.
Significant players in many industries use these extracts, including those working in:
- Pharmaceuticals
- Food
- Cosmetics
- Pet care
- And other industries
Most experts believe that the pharmaceutical industry shows the most promise in terms of future predictions. They expect this market to expand significantly in the next five years. Currently, North America captures the largest share of the market. The Asia-Pacific region may overtake North America in terms of both demand for and supply of pharmaceutical CBD in the coming years.
Key Projections
If you’re planning to invest in CBD or start your own company, there are a few key projections you’ll need to note. The first is that experts are projecting continued market growth. Some suggest that the CBD oil market should grow to USD 5.3 billion by 2025. If this projection is correct, you can expect a compound annual growth rate of over 40%.
You should also expect the hemp-derived CBD oil segment market to grow at a faster rate. This growth is occurring in part because governments are decreasing regulations on hemp. Most government regulations on marijuana cultivation and distribution remain in place. Experts project that the hemp-derived market segment for CBD oil will grow to USD 2.9 billion by 2025.
Increasing Scope
As CBD continues to rise in popularity, consumers will find it incorporated into more products. Manufacturers that offer a more comprehensive range of products are most likely to find success in future markets. Most of today’s largest manufacturers focus on pharmaceutical R&D. However, consumer segments like health and wellness, skincare, and even pet care will also continue to play an important role.
A brief look at the current cbd market share by company illustrates today’s changing market dynamics. More local and regional companies than ever produce and sell CBD products, yet large corporations still dominate the pharmaceutical CBD market. Smaller manufacturers that can develop more innovative consumer-facing products will be in an excellent position to remain competitive.
How Big Is the CBD Business?
Given how many people are talking about CBD these days, one can assume it’s big business. The question remains, though: how big is it? According to Brightfield, CBD product sales in the U.S. alone are growing by more than 706% per year.
The Take-Away
There’s no way to make 100% accurate market projections. With that being said, the current data and recent historical trends regarding CBD both point to the same outcome. The worldwide CBD market should only continue to grow in the coming years.