SP+GTM algorithm predicted that if the cannabis industry expands at its current rate, the American market will reach $20 billion by 2020. CBD, a non-psychoactive cannabinoid found in cannabis, has had a surge in popularity over the past couple of years. Unlike THC, the chemical compound that gives weed its signature effect, CBD has been shown to help with everything from PTSD and anxiety to MS and epilepsy — without getting you high. Be as it may, federal restrictions are still pointing negative. Since marijuana is federally classified as a Schedule I narcotic, and hemp — marijuana’s low-THC, high-CBD cousin — is still highly regulated. CBD has existed in a legal grey area. Meanwhile, 2018 Farm Bill, amended the term “marihuana” — a term currently found in the 1972 Controlled Substances Act — to exempt hemp, which is defined as a cannabis plant containing less than .3 percent THC. The law provides support, certainty, and stability to our nation’s farmers, ranchers, and forest managers by enhancing farm support programs, improving crop insurance, maintaining disaster programs, and promoting and supporting voluntary conservation. Enacted December 20, 2018, the USDA is implementing the new law, which includes seeking public input on programs and provisions and design guidelines.
The programs authorized by the 2014 Farm Bill are available to serve producers now. i.e. Farm Bill will restore industrial hemp to nationwide legal production for the first time since World War II, offering vast opportunities for the industry and investment in a market expected to triple in four years. With the removal of hemp from federal prohibition under the Controlled Substances Act of 1970 (CSA), the total U.S. hemp industry now looks to expand at a healthy 18.4% through a 5-year combined annual growth rate (CAGR) from 2018-2022. Our analytics suggest that hemp-derived CBD market will grow from a $390 million-dollar market in 2018, to a $1.3 billion market (or 3.3x) by 2022, representing a 27.2% 5-year CAGR. Removing hemp from the CSA will have immediate impacts, and create a financial domino effect. Banks will gain the confidence to provide accounts and more robust financial products to hemp companies. That, in turn, will allow credit card processors to process hemp-derived CBD accounts, both online and in mass-market retailers. Ultimately, mass-market retailers will have bolstered confidence to carry hemp-CBD brands. To date, the mass-market retail channel for hemp-derived CBD has seen less than $1 million in hemp-CBD products sales. By 2022, SP+GTM algorithm estimates mass-market CBD alone to grow to $430 million in sales.
note: As the U.S. hemp industry matures, it will transition from being a seed, textile, and industrial product importer to a global exporter. Until now, the U.S. has lagged behind countries like Canada and France with hemp legislation. With final passage, the Farm Bill aims the industry to accelerate and establish itself as a global hemp powerhouse led by hemp-derived CBD.