Considering the fact that the CBD oil market is predicted to hit $20 billion by 2024, there are likely lots of CBD-based startups on the horizon. It’s also becoming a household brand with it being found in food, soaps, and even pet products.
CBD is a substance extracted from any form of cannabis and it’s isolated from other cannabinoid like THC. Because of this, it doesn’t get anyone high and it’s desired by even non-pot lovers for its health benefits.
The production and national distribution of hemp was essentially legalized with the 2018 Farm Bill, with the exception of marijuana with more than a 0.3% concentration of THC. It isn’t much of a victory for recreational users, but it opens things up for the health supplement, pharmaceutical and textile industries.
The Hurdles of a CBD Startup
Starting a CBD business requires the same sort of plan as any other business, but there could be extra steps depending on your location and complexities of your product. You have to keep in mind that hemp-derived products are now out of the hands of the DEA and now under the supervision of the FDA. Although there is now relative freedom in the market, you have to consider that regulations could change rapidly.
Some producers of CBD oil and hemp-based products may decide to cut costs by producing their own hemp. You may need to hire a lawyer in case you have to abide by local growing regulations, and that could always be subject to change. In that regard, if your CBD business isn’t really about volume, you can simplify things by contracting with a farmer that his it all sorted out.
With the CBD-based pharmaceutical drug Epidolex being approved by the FDA, there is always uncertainty how over-the-counter treatments will be regulated. Current CBD companies will have to go with the flow until regulatory agencies make up their minds.
Who is Consuming CBD?
It isn’t just trendy millennials that are into CBD, although more of the novelty products may be more prevalent among them. Baby boomers are actually driving the market, mainly due to the pain relieving effects of CBD oil.
What’s interesting is the fact that Gen X and Z both make up a very tiny fraction of the market, suggesting that CBD oil or cannabis may not be in their tastes. If younger generations past millennials don’t pick up the CBD oil craze, this could be a long-term limiting factor for startups.
In any case, the cannabis market in general is quite young an unpredictable, similarly to the cryptocurrency market. If you want to get into the startup scene with CBD or cannabis, now seems like a better time than ever to take advantage. Otherwise, the market could expand or collapse due to what regulators around the world decide upon.