Products derived from hemp are increasing in popularity.
As impressive as recreational marijuana sales have been, hemp products could also be on the verge of becoming a giant industry. Brightfield Group has released a new report predicting that hemp-derived cannabidiol (CBD) products will become a $1 billion industry in about three years.
In 2016, hemp CBD product sales totaled approximately $170 million. Brightfield is predicting a sharp incline in sales for at least the next five years.
Companies in the hemp industry enjoy greater legal freedom than cannabis companies do. CBD products made from hemp contain less than 0.3% THC. The low extremely low levels of THC ensure that hemp CBD products do not produce psychedelic effects. Many of these types of products are sold online and are much more accessible to customers than marijuana products.
There still is some debate among federal authorities as to the legality of hemp products. In 2014, the federal Farm Bill classified hemp differently from marijuana. The Drug Enforcement Agency did not agree and maintained their view that hemp falls under the Controlled Substance Act since it is still derived from the cannabis plant.
So far, it appears companies have been able to navigate the confusing landscape of CBD hemp products. But just because you can sell it online does not mean its easy money.
“One of the most surprising things we found during this research was how many companies are currently operating in the space, and how few of them are generating significant revenue,” said Bethany Gomez, the Director of Research at Brightfield Group according to Forbes. “Essentially everyone is trying to do hemp, but only a handful are doing it well. It’s seen as easy because it can be sold online but, with restrictions on traditional marketing, it is very difficult to connect with your core consumer and even communicate why they need your product.”