In 2018, low-THC and non-THC products hit a market boom of $1.8bn – and this is set to increase to almost $18bn by 2024.
But why are CBD oil companies booming? What’s driving the market – and should it be something you consider investing in yourself?
Here’s everything you need to know about the CBD boom – and potential bust.
What is CBD Oil?
Cannabidiol (CBD) oil is a derivative of hemp or cannabis plants. It is touted to have many health benefits, such as reducing anxiety, improving sleep, and boosting concentration.
It doesn’t get you high like cannabis does, though. The oil is processed to remove most – or all – of the tetrahydrocannabinol (THC) which is the psychoactive compound that makes you feel high.
5 Reasons CBD Oil Companies Face Serious Growth
Other than the prospect of health benefits minus the high, there are more reasons CBD manufacturers have been a key market for investors lately. But do these reasons mean a continuous boom – or could it go bust soon?
1. It’s Legal in All States
CBD oil made from hemp is legal in all states since introducing the Agriculture Improvement Act 2018. The oil made from a cannabis crop is only legal in states that allow medical marijuana or have legalized marijuana use.
The new legislation opened up a wide market for new customers – and new business opportunities, too.
2. CBD Oil Edibles on the Rise
From CBD gummies to CBD-infused beer, oil has become an attractive ingredient for a wide range of food manufacturers.
Consuming the oil as food takes away the stigma of treating it like a tincture or medication. This broadens the appeal to more potential customers.
3. The Cosmetics Industry Likes CBD, Too
CBD is celebrated for a wide range of health benefits – which means cosmetics companies now use it for creams, face washes, and even shampoos.
The legalization of CBD means that cosmetics companies can use it in their products in the knowledge they won’t be banned in any state.
Websites like https://www.remedyreview.com make it easy for customers to research CBD products before they buy, too. This shift in behavior shows the stigma lifting as more people treat CBD as any other health supplement.
4. CBD Is (Relatively) Inexpensive to Produce
Large-scale agricultural production of hemp is relatively inexpensive to produce. When farmed efficiently, the oil is only one of several products available from the same crop. Hemp seeds, flour, and fiber all have their uses, too.
It can be sold for a much higher markup than other crops. Therefore, the returns on investment and labor are attractive to investors.
5. CBD Oil Is Sold in General Stores
Legal marijuana still has to be purchased from a dispensary. This puts off some customers as the environment makes them uncomfortable or under scrutiny.
CBD is available from gas stations and general stores like other health products. It’s easy to get hold of – so it appeals to a huge number of customers.
One Major Reason Why the CBD Oil Bubble Might Burst
All of this sounds great for investors – but wait!
The market is quickly becoming saturated with CBD oil companies. Production soon won’t match demand, hiking up prices and putting off many casual consumers. Smaller, less established, CBD companies may not keep up with the early adopters who already have a significant market share.
If you’re not sure CBD is where it’s at for your investments, check out our other finance articles for lots of hints and tips about growth markets to consider!