The Rise of the Hemp-CBD Industry

Submitted by Mary Meade on
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One of the biggest trends of 2019 was green, but not in the circular economy sense—hemp and cannabidiol (CBD) experienced a meteoric rise in popularity, with industry growth surging at 706 percent throughout the year.

What is Hemp-CBD?

The Farm Bill of 2018 legalized hemp and CBD at the federal level for the first time in 80 years, making it easier for farmers to enter the market and for the crop to move across state lines. There are two kinds of CBD: CBD derived from hemp, and CBD derived from the federally illegal cannabis plant. To classify as hemp, the plant must contain less than 0.3 percent THC, a chemical that induces psychological effects. Unlike THC, CBD does not dampen mental acuity. In this blog, we will focus on hemp-CBD, which is legal on the federal level. 

While the chemical is claimed to have a myriad of benefits, it is most widely known to relieve anxiety, depression, pain, inflammation, and epilepsy. The versatility of CBD has made it attractive to the food and beverage industry as well as health and beauty markets in the form of tinctures, balms, oils, and more.

A Popular Plant-Based Alternative

As a plant-based product, hemp-CBD aligns with many health and wellness brands that market vegan lifestyles. The budding industry hit the market at an opportune time since 2019 saw the plant-based alternatives hit the mainstream with Impossible Foods and Beyond Meats products sold in numerous fast-food chains. Between the growing interest in plant-based lifestyles and the consumer acceptance of hemp-CBD, the market is estimated to hit $22 billion by 2022 in the US alone, according to the Brightfold Group.

Additionally, hemp-CBD products have found a niche on social media. Over the last year, Google Trends shows that there has been a significant increase in searches for the word CBD. Instagram, Twitter, and Reddit have communities dedicated to sharing knowledge and views about CBD, where official media accounts and everyday people advertise the purported benefits of CBD products. Demographic studies also show that CBD appeals to both men and women—it is just as popular with older generations as it is with young professionals for its supposed benefits.

More Research Needed

While many entrepreneurs have jumped on the CBD train, the Food and Drug Administration states that it cannot conclude that CBD is “generally recognized as safe” since there is little research and data on the chemical’s short and long-term safety. The agency updated its stance in late 2019 to say that marketing CBD by adding it to food products or labeling it as a dietary supplement is illegal.

These remarks are a warning to be cautious. The FDA is still exploring uses for CBD, including pharmaceuticals, which may affect its standing as an over-the-counter product as research continues. So far, the only FDA-approved CBD oil is Epidiolex, which treats rare and severe forms of epilepsy.

Despite these limitations, most CBD businesses' main source of revenue is tinctures—liquid concentrates administered orally—which are not at risk under the FDA’s statement. Balms and other CBD-infused products are also okay if they do not claim to be a dietary supplement.

"It ultimately needs to be regulated so the end-user knows what they're getting," says Robert Rosania, a consultant to the hemp industry. "When I talk to people now, they're confused, mostly because of marketing."

An Opportunity for Certification

Despite the recent abundance of hemp-CBD products, some consumers report discrepancies between products—some oils would work while others wouldn’t. The market is saturated with different brands, but the industry is missing universal standards.

Today’s consumers are conscious of ingredients and check for certifications. As the hemp-CBD business booms, more people will be on the lookout for businesses that are certified by credible third-party organizations. Some hemp-CBD farms are already starting this process by passing the USDA organic certification. Other businesses are tapping into other innovative uses of hemp, such as Green Business Network member Dama Distributing, which offers hemp-made packaging.

Organizations that are interested in adding hemp-CBD to their business strategy should budget for certification. While Green America does not have a CBD certification, we do certify businesses in the hemp industry for social and environmental responsibility.

Learn more about certification and if it's right for your business.

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