How Epidiolex Changed the CBD Industry
About Epidiolex and medical cannabis On June 25, 2018, the U.S. Food and Drug Administration (FDA) considered the available clinical...
Read moreOverview of the CBD industry
Since the discovery and subsistence cultivation of the hemp plant (Cannabis sativa) by an ancient civilization in Taiwan, the use and marketing of cannabis-derived products has increased in leaps and bounds across every part of the globe. This discovery, as expected, started the crude use of hemp as herbal medicine and raw materials for the production of fabrics and textiles. With time, cannabis was considered a natural commodity cultivated by people who would later market it to serve numerous purposes based on anecdotal accounts and evidence. On a broad overview, the cannabis plant has a tumultuous history. Right from the first set of cannabis cultivations over 12,000 years ago in Taiwan, to the promulgation of the Marijuana Tax Act of 1937—which banned cannabis sale in the United States, the hemp plant has enjoyed fluctuating popularity and witnessed a few downs as well.
Commodity status of the cannabis plant
Extensive research into the properties and natural constituents of the cannabis plant started in the 1940s when Dr. Roger Adam’s team at the University of Illinois conducted an experimental analysis of the plant and discovered cannabidiol—a non-psychoactive cannabinoid compound with known effects on cancer cell migration, tumor neovascularization, and cancer cell adhesion. Reports, however, suggested that Roger Adam’s team knew little about what they had discovered. In 1963, another researcher, Dr. Raphael Mechoulam, successfully extracted pure isolates of CBD from the hemp plant and began a comprehensive study of the properties of this compound on humans and animal subjects (Roger, 2006). Starting with blind trials in epilepsy patients, the works of Dr. Raphael Mechoulam confirmed the potentials of CBD, and by extension, the cannabis plant, in human medicine. Not only was CBD considered useful in medicine, but other research inquiries were also initiated to investigate unknown constituents of the cannabis plant and their safety profile in humans.
As scientific inquiries into CBD were ongoing, a subset of the emerging civilization was busy finding numerous domestic uses for the hemp plant. For example, seafaring civilizations in Spain, Netherlands, and Italy have discovered that sails made from hemp have a better chance of resisting decay and mechanical tear when compared with ails made from flax. In addition to these, hemp sails were also durable and can be easily worked to develop the famous triangular sails that improve a ship’s mobility at sea. At the same time, active observers in the fashion industry were busy experimenting with fabrics derived from the hemp plant. Derived from a particular strain of the cannabis plant, the hemp fabric comprises long strands of fibers that can be spun together and woven to produce clothing. These uses confer a valuable status on the cannabis plant and set a platform for the trading of the cannabis plant, cannabis constituents, and cannabis-derived products. In essence, this commodity status started the cannabis industry—an industry with a valuation projected to exceed $89 billion by 2024 (Financial news, 2019).
Current trends in CBD branding and marketing
CBD and its derivatives products are becoming increasingly important in modern civilization; different regulations affecting the use of these products keep increasing. With the passage of the 2018 Farm Bill in the United States, hemp was removed from Schedule 1 controlled substance, considered a simple agricultural commodity, and legalized for production in the United States. This allows for interstate commerce and listing of CBD products in the stock market as a tradable commodity. In response, different companies have leveraged the legal status of cannabis by experimenting with different branding attempts using cannabis as a tool of appeal. Globally, cannabis branding and marketing can be found in different niches of human endeavor. CBD is currently trending in the fashion and beauty industry with reputable brands like Levi’s incorporating hemp in their brands.
Following an announcement by the Football giant, Barcelona, to sell the naming right to the Camp Nou stadium, Mike Tyson’s cannabis company—Tyson Ranch, has expressed interest in securing the naming rights in an attempt at global recognition. With a successful bid, Tyson Ranch is set to enjoy unprecedented patronage that, by extension, will improve the global cannabis market. In 2019, Acabada, a fashion company specializing in the production of women outfit, launched the very first set of CBD-infused active wears with each product containing about 25 grams of 99.9% pure CBD isolates. Other Fashion outfits are in the process of producing clothing with fabrics derived from hemp, which is considered sustainable and eco-friendly. With the level of popularity that CBD has enjoyed lately, it is an understatement to describe the CBD industry as a budding enterprise.
Valuation analysis and funding sources for the CBD industry
In 2018, the valuation of the global CBD market was pegged at $4.6 billion. Compared to the bitcoins dramatic valuation of 2016, different market analysis reports forecast scary valuations for the CBD industry in years to come. These forecasts are unconnected with the fact that CBD-based products are currently considered an alternative therapeutic approach in the management of different human diseases. Marketing initiative has seen increased CBD product options, including hair care, cosmetics, gummies, pharmaceuticals, intimate lubricants, and infused beverages (Grand View Research Report, 2019).
The CBD industry’s funding sources are generated right from contracts, business collaborations, and sale of CBD-derived products. Production companies like Aurora and Canopy growth have embarked on cultivation campaigns that have expanded their cultivation in a bid to match global demand for CBD. Other players in the industry are collaborating with media influencers and pro-cannabis personalities to increase awareness for their products and expand their customer base.
Roadblocks the CBD industry must overcome
The most prominent roadblocks facing the cannabis industry are legal in nature. Different federal and state regulations limit the industry’s expansion by strictly dictating the terms of cannabis sale and distribution. In other regions of the world, the cultivation of cannabis is still considered a punishable offense. For example, cultural bias against the cannabis plant and strict regulations governing the cultivation, licensing, and sale of cannabis products are the primary limitations facing cannabis branding and marketing in Africa. In regions where these roadblocks are more pronounced, the cannabis industry does basically not exist. To overcome these roadblocks, branding experts have proposed a campaign for the legalization of cannabis and widely communicated awareness moves to reverse the cultural bias against cannabis in developing regions of the world. In all, the CBD industry is fast hitting some high vertical grounds in the global market scene.
