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The Future of the CBD Industry in 2022 and Beyond

Each industry faces its own challenges and opportunities. However, I believe that the CBD industry is unique and crucial. Hemp-derived CBD products containing less than 0.3% THC were federally illegal prior to the passage of the 2018 Farm Bill. This means that they are still subject to regulatory gray areas. This uncertainty creates new challenges when it comes to financing, marketing, and production. However, both the market and industry are growing at an incredible rate.

CBD companies must seize this opportunity and navigate the many hurdles. Here’s my perspective as a founder and owner of a CBD company, with some predictions about the future.

1. CBD is a big business and will continue to grow.

The U.S. CBD market reached $4.6 billion in 2020. This is a huge number only two years after the federal legalization of hemp-derived cannabinoids. Two notable forecasts for the U.S. market project a growth of 15 billion to over $20 billion by 2025, and 2024 respectively.

CBD companies offer a wide variety of products. This diversity will grow as more companies offer products that are hyper-concentrated on the over 100 cannabinoids in the hemp plant. For specific uses, formulas that focus on cannabinol and cannabigerol will be created.

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2. There are still regulatory challenges, and Congress will need to address them.

CBD is federally legal. However, I have observed that CBD companies still struggle to obtain capital and standard services from banks. The FDA classification of CBD makes it difficult to market CBD as a safe, effective substance.

These issues can be addressed by the U.S. Congress. There is currently legislation that aims to do so, including the Safe Banking Act of 2020, the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2020, and the Hemp Access and Consumer Safety Act. These two pieces of legislation will allow the FDA to market CBD as a dietary supplement. This will allow for more distribution and marketing channels that are not allowed or restricted, which will result in increased sales and brand exposure.

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In addition, more precise federal regulation of product quality will be a rising tide that lifts most boats, as bad players drop off in survival-of-the-fittest fashion.

3. Access to big-box retail will increase sales and stabilize and improve supply chains.

I believe that CBD will be marketed by companies as a dietary supplement once they have it approved for marketing. Big-box stores will be able to offer a variety of topicals and edibles in a variety of product categories and applications.

The new distribution model could greatly increase the market and benefit many supply chain components including hemp farmers and labs that extract, distillate, crystallize and isolate CBD from plants. It will also encourage more quality labs into the CBD industry, since many facilities are reluctant to move away from their core competencies. Retail demand will lead to a dramatic increase in raw material prices.

4. Acquisitions will bring in more big names to the game.

As the CBD market’s initial “Wild West” phase is experiencing growing pains, large companies have been reluctant to embrace CBD. Once the regulatory environment is stable and clear, I think many corporate giants will begin to look at diversifying their product lines with CBD. They may also add new products that offer growth opportunities. Procter & Gamble and Johnson & Johnson, Coca-Cola and Unilever are all possible players in this game. They will do so by acquiring existing CBD market leaders.

5. Safety, quality assurance, education will all skyrocket.

The mainstreaming of CBD will bring about a new level in public education. This will allow consumers to feel safer and more confident while buying products that have been well-regulated.

Many CBD companies that are primarily self-regulated will have to increase their quality assurance and compliance in order to survive. Providers who sell high-quality products will reap the benefits of their R&D investments and production costs that have inevitably reduced ROI.

While CBD’s future is bright, it still depends on important developments.

The CBD industry is a unstoppable juggernaut in many ways. The CBD industry is already a multibillion dollar sector and will continue to grow as millions of people express their preference. CBD companies have to overcome many hurdles to be able to market their products on regular channels, such as obtaining capital and standard payment processing.

These important developments will eliminate these barriers: CBD being classified by the FDA as a dietary supplement, industry’s unlimited access to financial services and a regulatory framework that improves product safety and quality.

Like many of my colleagues, I am in wait and see mode as the CBD company owner. These challenges are what we face to help grow our businesses. However, I believe that the legislation will soon establish CBD’s status, eliminating any barriers to innovation, safety, and eventually normalizing the industry. Then, exponential growth will be possible.

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