CBD market projects for 2020




As the books close on 2019 and we look ahead to 2020, we start to take stock of the year that was in the CBD market and look ahead to what opportunities the future might bring. As with any burgeoning market, there certainly are challenges ahead but there is also a great amount of opportunity for investors to find potential goldmines. Here, we will look at the market as it stands at the end of 2019 and what experts are saying about CBD market projections for 2020.

CBD market in 2019

As expected, 2019 was a banner year for CBD products. In December of 2018, the Farm Bill was signed into law which, among many other things, legalized the production of hemp plants by American farmers. Cannabis and legal marijuana also won big victories in 2019 with Illinois becoming the 11th state to fully legalize it and the governors of states like New York, New Jersey, Pennsylvania, and Connecticut all endorsing their states doing the same. However, there were some setbacks as well with the President reiterating his support of states’ rights for CBD and cannabis laws as opposed to a national solution.

Positives. CBD products have reached a new level in 2019 with the market growing to around $5 billion. That represents a 700% increase from 2018. The Farm Bill, coupled with growing scientific research about the benefits of CBD has led to a consumer explosion. There is now an incredible number of CBD-infused products available with everything from CBD water to cosmetics to pet treats hitting the shelves in 2019. Although new products abound, the majority of the velocity is still being driven by CBD oil and tinctures, which are explained in this CBD Daily Mag article.

Negatives. While the hemp and CBD markets have done great things in 2019, cannabis company stocks have had a troubling year. Even with the legalization of hemp and the explosion of CBD popularity, these companies have not made the leap in profits of inevitability that analysts had hoped. These companies have faced many of the same issues as tech-darling stocks such as Uber, Lyft, and Slack. Not being able to turn a legitimate profit and added competition has slowed their speculative growth. Even the best CBD oils, such as the ones mentioned in Giftwits 20 best CBD oils list, have faced massive competition and lowered retail pricing.

CBD market in 2020

There were definitely both positives and negatives for the CBD market in 2019, but most experts are still bullish on the CBD market going into 2020. As CBDKyro explains, there are a number of reasons that investing in CBD oil is a very good idea right now.

 

Bullish predictions

As the CBD market stands in 2019, at around $5 billion, the projections that even the most conservative analysts offer are calling for major growth over the next 4-5 years. CBD market watchers at the investment research firm Cowen & Co. have predicted that the CBD market would grow to around $16 billion by the year 2025. BDS Analytics, a cannabis-specific market research and data company expects that number to be closer to $20 billion in the United States a year sooner. The Brightfield Group, another industry analyst is the most bullish of the bunch predicting a $22 billion industry by 2022. No matter whose projections you take stock in though, the message is the same; the industry is trending upwards.

Companies betting big on the US CBD market in 2020

If the experts and the analysts are not able to convince you that 2020 will be a big year for CBD in the U.S., you only have to look to some of the biggest companies in the industry to see that a lot of people share this opinion. Aurora Cannabis, a Canadian cannabis company is one of the world’s biggest businesses in this space. What is their 2020 plan? Bet big on the U.S. CBD market in the coming year. The company has eschewed some of the bigger and flashier American investment partnerships in the last year and instead, has decided to go all-in on the hemp-derived CBD American market. As their chairman, Michael Singer told CNN Business, “We expect to have a significant footprint in the US in the coming quarters.” Companies like this seeing the value in the market is a very good sign.

Growing pains continue

Even with all bold predictions and major players jumping into the game, most agree there will still be the typical growing pains that are experienced by most fledgling industries in 2020. Some of the issues that will continue to crop up in the coming year will make the market continue to fluctuate quite a bit, making investment complicated despite the growth trends.

Kate Huber, chief editor at NJGamblingFun has previously worked as a CBD market analyst. She had this to say: “There will be increased competition in the market which may depress prices of even the best CBD brands. The legalization (or not) of cannabis and, in turn, cannabis-derived CBD will continue to make the market volatile and not as lucrative as it could possibly be. Also, as more studies come out about the benefits and uses of CBD there is always the chance that science will put a slight damper on some of the benefits that many companies are now touting.”

Speaking of advertised benefits, the FDA still has not fully come around on exactly how they are going to regulate CBD. If they make any regulatory changes in 2020, that could affect the overall value of the market as well.

Conclusion

The CBD market projections for 2020 can really be summed up in 2 words: cautious optimism. CBD and the related products are an amazing, growing category with the potential to truly explode and create a huge windfall for investors. However, much like many of the disruptive companies and industries that have shown so much promise but ultimately did not live up to their potential (see WeWork), there are plenty of pitfalls that the CBD industry could experience in the coming year that will hurt the overall value of the investment. All in all, it does seem like 2020 will be a net positive for the industry and if you are able to hitch your investment wagon to the right CBD bull, 2020 can be a great year for investors too.

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