How Hemp CBD Oil is Fueling a $22 Billion Industry
Industrial hemp and the CBD industry are seeing something of a renaissance. States are moving to legalize cannabis products, regardless of THC content, but some people may not realize that hemp and CBD oil share a privileged status.
Thanks to the 2018 Farm Bill, it is now federally legal to grow hemp, make hemp-derived CBD oil, and sell it in any state you choose, with some caveats. Although it is federally legal, some states do not allow the sale or use of any products containing even just a trace amount of THC; check your state’s laws to be certain. The hemp CBD market is set to rake in $22 billion by 2022, which is more than all other cannabis products combined. All told, a $22 billion CBD market represents a three-fold increase from 2018.
Besides its relatively new legal status, what explains the growing popularity of hemp-derived CBD? To answer this question, let’s explore the nature of industrial hemp first.
What is Industrial Hemp?
Hemp is a type of cannabis sativa plant with far less tetrahydrocannabinol (THC) than traditional cannabis. The Farm Bill specifies that industrial hemp cannot contain more than 0.3 percent THC by composition. Instead of significant amounts of THC, hemp plants contain cannabidiol (CBD), which is considered an active ingredient of hemp.
While THC is a naturally occurring, psychotropic chemical that provides the “high” people associate with cannabis use, CBD is a naturally occurring chemical that is not psychoactive. Therefore, CBD hemp oil does not produce a high in the user.
Industrial hemp is hemp that people grow to make a variety of products for the market. This practice goes back thousands of years, with hemp figuring as one of the most significant crops for mankind throughout the ages. According to the Massachusetts Institute of Technology, “Hemp was probably the earliest plant cultivated for textile fiber.” In ancient China, they used it to make cloth. The oldest known texts — which are Buddhist texts — were written on paper made from hemp. Ancient folk remedies and medicines relied on hemp, and people used it to make canvas sails, rope, and clothing during the middle ages.
Industrial Hemp Uses
Today, people use industrial hemp to make a wide variety of products. These fibrous products include:
- Specialty papers;
- Bank notes;
- Technical filters;
- Construction fiberboard;
- Carpets and upholstery;
- Biodegradable Landscape Matting;
- Animal Bedding;
- Moulded Plastics;
- Thermal insulation;
Additionally, hemp seeds and flowers have the following uses:
- Confections and baked goods;
- Salad oil;
- Hygiene and cosmetic products;
- Animal food;
- Gamma-linolenic acid dietary supplements;
- Specialty industrial oils;
- Insect repellant;
- Essential oil;
- Medicinal CBD oil;
Among these products, CBD oil is unique, in that consumers use it for a variety of medicinal, therapeutic, hygienic, and dietary purposes. For example, topical CBD oil can be used to soothe achy muscles and joints, as well as to treat dry skin and rashes.
Furthermore, CBD is making waves in medicine. In 2018, the FDA approved an oral CBD solution called Epidiolex for the treatment of severe epileptic seizures — the first of its kind.
Industrial Hemp Farming
According to Michael Bowman, founding chair of the National Hemp Association, when it comes to industrial hemp farming, there are two types of operations: traditional hemp farms for textiles and bioplastics, which can grow about 400,000 plants per acre, and CBD farms, which can grow about 1,000 to 1,600 plants per acre.
For farmers, CBD plants fetch the highest demand, and therefore the highest value. These plants are individually tended, which is why farmers can only grow so many per acre. According to Bowman, the challenge for farmers is to grow plants that don’t exceed the 0.3 percent THC limit. Much of the seed supply for these plants comes from other countries, and farmers don’t know how the plants will react to American soil.
“Those of us who have used CBD oil or have family members who have used it have seen some pretty amazing health responses,” says Bowman. “We are going to have a significant market demand that can’t be met yet by domestic production.”
What Do CBD Companies Do?
Before the Farm Bill of 2018 passed, CBD companies didn’t have a very uniform business structure, easy access to the marketplace, or a clear legal status relative to both state and federal laws. In states that had previously legalized cannabis, retailers might have already been offering a full range of cannabis products, including both hemp-derived CBD oils as well as products containing THC. Now that the federal status of CBD products has been more clearly distinguished from marijuana, the field is more level, and the pathway to offering legal CBD goods is more clear in states that have not legalized cannabis containing THC. Nevertheless, it should be mentioned, not all states are CBD-friendly, and the legal status of any cannabis product at the state-level may not match the status at the federal level.
Regardless, thousands of companies are lining up to compete for market supremacy, specializing in a whole range of hemp-derived CBD products. Industry growth is branching into the mainstream. Most recently, Martha Stewart joined Canopy Growth, a Canadian company, as an advisor for a line of CBD products.
The best CBD companies make a wide variety of products, including oil, capsules, vape oil, edibles, topicals, and pet products, because they know consumer demand is broad and will continue to grow.
Why is the CBD Market Booming?
The passage of the Farm Bill finally cleared the way at the federal level for more hemp production, consumer goods, and medical research, as well as increasing access to financing and market participation across the country. This means more companies can proliferate and compete to meet high levels of consumer demand.
Consumer demand is spurred by just how many positive applications there are for CBD. As a skincare supplement, it provides high levels of gamma-linolenic acid, which can help to treat conditions such as systemic sclerosis, psoriasis, and eczema. Moreover, CBD hemp seeds are nutritious. Hemp seeds are packed with omega-6 and omega-3 fatty acids and are a great source of protein; they may help prevent heart disease, and may reduce symptoms of PMS and menopause; even further, they may help with digestion. These are just some of the applications and uses being investigated and researched for definitive evidence.
In short, the CBD market is likely booming because hemp-derived CBD is federally legal unlike its other cannabis-based relatives. Hemp-derived CBD offers benefits that cannabis products traditionally do not: users relate that they can relax without worrying about any adverse reactions to THC, and can still bask in the therapeutic and medicinal benefits of CBD.
Why Are CBD Oils So Popular Now?
CBD oils are popular because they have a clear analog in other essential oils, making them easy for consumers to recognize and customize for individual use. Like other essential oils, they are also a simple and effective way to take advantage of the benefits of CBD. These benefits may include relief from problems such as insomnia, pain, anxiety, and skin ailments. While it is impossible to guarantee these benefits to the individual consumer until more research is completed and verified, it’s true that consumers are voting with their wallets when it comes to confidence in the efficacy of CBD oils.
What’s Next for the Hemp-Derived CBD Business?
Combined with the Farm Bill’s legalization of hemp production, The FDA’s approval of Epidiolex for epileptic seizures is a good omen for hemp-derived CBD.
However, until all forms of cannabis are legalized federally, farmers must keep the THC level of their hemp plants below 0.3 percent in states where cannabis sale and production is illegal. Even still, some state laws represent legal gray areas in this debate.
Production won’t reach its peak until American farmers know they’ll get legal hemp plants from the seeds available for bulk purchase. Expect 2020 to be the year when hemp-derived CBD will really hit its stride, because farmers who are growing in 2019 will know what to expect from the seeds, and consumer demand will continue to grow alongside the plants.