The Hemp Revolution Rolls In

Shân Osborn

Source: Nielson, via Hemp Industry Daily

The Signal: The hemp-derived cannabidiol (CBD) market is on track to explode.

It’s already a ~$1.85B business in the US, and is forecast to reach $6-7B by 2025 (a ~32.5% CAGR from 2019).

Hemp is a non psychoactive form of the cannabis plant. It contains CBD with only trace levels of tetrahydrocannabinol (THC).

CBD is a relatively prolific and well-researched cannabinoid, shown to have medicinal use in a list of conditions including pain, cancer, and neurological disorders.

As the space takes off, rarer cannabinoids are also growing in popularity. Examples include cannabigerol (CBG), which is being touted as the new CBD, and the sedating cannabinol (CBN). Current market growth forecasts have not yet taken these into account.

Like marijuana, hemp can be smoked, ingested, distilled in oil, or used in topical creams to leverage the cannabinoid properties (without the high).

With changing legislation and attitudes towards hemp, the industry’s role is definitely not slowing. Here are some opportunities:

Smokables: One of the fastest growing (and most lucrative) segments, smokable hemp is forecast to achieve 5x growth in the next 5 years. 

This puts the US market at $300m to $400m in 2025.

Trendster Sean Patrick Barrett has a frontrow seat to the rise of hemp smokables. He recently told our Facebook group about his newly launched pre-roll biz -- that is on track to blaze in $17m+ this year.

Josh Gutierrez also knows someone in the space who’s netting $200-$240k annually from each of their 10 acres of hemp in Texas.

CBG and CBN infused pre-rolls, roll-your-own kits, and bringing a variety of strains D2C are all high-growth opportunities.

Oils and Edibles: Interest in edible CBD products is soaring; but not all are created equal.

Entrepreneurs could compete by focusing on high quality oils and edibles. Product innovation could help to set you further apart (gummies, drinks, snacks… the opportunities are endless).

You could concentrate on product niches, tailored and marketed to specific needs: e.g., CBN products for sleep and CBG for gut health.

CBG is cost-intensive and difficult to farm. Firms are starting to focus on alternative production methods as popularity rises. This January, San Diego-based Creo announced that it had successfully produced CBG at scale -- via fermentation.

This space is worth watching. The global market for cannabinoids produced by fermentation is forecast to grow from $10B in 2025 to $115B by 2040.

Topical Creams: Hemp-derived CBD creams for pain, inflammation and general skin health are receiving rising interest.

Source: Jungle Scout

Revenue examples from Amazon (US data, via Jungle Scout) include this pain relief cream ($364k/month) and Hempz whipped body cream ($328k/month).

Entrepreneurs could enter the growing space (and incorporate CBG as its popularity blooms).

As with edibles, the attraction of niching down is strong: current players target a broad market. You could focus on specific products for athletes, aging, arthritis symptoms, eczema treatment, etc. 

Topical cannabinoids for acne treatment is likely to be a high growth niche, as more promising research is published. Opportunities include body and face washes, masks, serums and even make-up lines.

Nano-Cannabinoids: Cannabinoids can be conjugated to nanoparticles, allowing for more effective and targeted treatment. Preliminary studies with therapy-resistant cancerous stem cells are particularly promising.

Beyond targeted medical therapy for a range of illnesses, nano-cannabinoids are also set to shine in day-to-day use.

Cannabinoid products produced with conventional distillates/oils tend to have inconsistent effects (leading to highly mixed product reviews). Nano-technology allows for consistent quality, dosage levels and increased bioavailability.

The use of nano-CBD/G/N could set your product ranges apart from the rest.

The Pet Niche: The pet-friendly cannabinoid space is also set to soar.

Source: Google Trends

This niche is particularly appealing. Not only is the pet industry notoriously recession-proof, owners are also increasingly searching for ways to extend the life and good health of their animals.

CBD treatment for animal arthritis and other aging issues is gaining fast traction. Lower regulatory hurdles in the pet space may also work in your favor.

The market for cannabinoid foods, treats, oils, and creams for furry companions will be full of opportunities. This hemp oil for dogs and cats already brings in $91.6/month on Amazon. 

Why you should focus on foods over supplements, the future boom in the number of aging pets, and more tips on how to capitalize in our piece, here.

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