The Market for CBD and Cannabis is Exploding
Unless you’ve been living under a rock in the last few years, you’ve probably heard about cannabidiol or CBD products. This non-addictive, non-psychoactive chemical compound is found in the cannabis plant has been hailed as the powerful plant-based medication that is extremely promising for a wide variety of conditions and ailments. CBD packs preventive properties that may help the following symptoms:
- Helps prevent pediatric seizures
- A natural anti-inflammatory for skin and soft tissue
- This antioxidant helps fight tumor and cancer cells
- Fights germs and bacteria
- Can enhance brain health
- Eases chronic pain
Supercharged Growth in CBD Oils, Tinctures
The marijuana legalization movement in the U.S. has spurred huge investment in an industry that simply didn’t exist just a few years ago.
The great shift in public perception has not only allowed huge swaths of the population to gain access to a product that was once only available on the black market – it has also allowed entrepreneurship to flourish in a new and exciting industry, giving rise to a plethora of U.S.-based “canna businesses.”
Cannabis is now viewed as The Next Great American Industry and according to market research provider, Arcview Market Research, it’s only just beginning. In a “State of Legal Marijuana Markets” report, Arcview found:
— North American marijuana sales grew by an astounding 30% in 2016 to reach $6.7 billion in sales
— North American projected sales to top $20.2 billion by 2021 as markets expand in Canada and USA
According to Arcview’s editor-in-chief Tom Adams, those are hyper-growth projections that draw similarities to cable television (19%) in the 1990’s and the broadband internet (29%) in the 2000’s. And a huge part of that will be fueled by the rapidly accelerating CBD market as well.
According to The CBD Report, published by The Hemp Business Journal, “Hemp CBD market rose from a market that was barely noticeable a few years ago to $90 million in consumer sales for hemp-based CBD products in 2015 alone.”
Projections to date for 2016 indicate that the total CBD market is poised to grow 27% to reach $115 million across channels. In addition to hemp- based CBD products, HBJ estimates another $112 million in cannabis products were sold through dispensaries in 2015, for a total CBD market of $202 million.
As sales of CBD products continue to increase, HBJ forecasts the entire U.S. CBD market will increase to $2.1 billion by 2020 and that $450 million of those sales will be from from hemp based sources, and the rest from marijuana sources.”Amazingly, these projections are only focused on the U.S. CBD market. When you factor in the CAGR of the cannabis market in places like Canada, Australia, the U.K., and Europe, these numbers could be staggering.
In fact, Matt Karnes of Greenwave Advisors is even more optimistic about its growth growth prospects, saying, “In terms of the CBD market size, I estimate an almost $3 billion market by 2021.” A growing number of investors believe those lofty projections may even be too conservative.
Big Pharma Concerned About Powerful, Natural CBD
GW Pharmaceuticals is a UK company that’s developing Epidiolex – a novel CBD treatment for severe, orphan, early-onset, treatment-resistant epilepsy syndromes including Dravet syndrome, Lennox-Gastaut syndrome (LGS), Tuberous Sclerosis Complex (TSC) and Infantile Spasms (IS).
Now keep in mind, the global epilepsy drugs market alone was valued at $4.1 billion in 2015. However, these treatments have proven to be highly ineffective in controlling epilepsy syndromes. What’s worse, existing anti-epileptic drugs often have brutal side effects that can cause permanent damage to a patient’s body and mind. Because Epidiolex was developed to compete against these ineffective and harmful drugs, it has the potential to seize control of the antiepileptic drug market completely – which could quickly translate into blockbuster sales figures.
Not surprisingly, this potential upside has boosted the stock value of GW Pharmaceuticals (NASDAQ:GWPH) significantly over the last few years. From a share price of just $8.46 on June 12, 2013, the company’s stock has exploded higher – reaching a price of $136.95 per share on March 3, 2017.
That’s a gain of 1,518% in less than 4 years. Their market capitalization today (which can be viewed as the current market value of the company) is almost $3 billion.
This goes to show that even though this company loses tens of millions of dollars every year and has never turned a profit, investors are betting heavily that GW Pharmaceutical’s CBD drug will deliver blockbuster profits in the future. That upside is being priced into their stock today.
And that’s just for epilepsy.
CBD has shown immense promise for the treatment of many other conditions as well. We won’t go through the entire list, but here are just a few conditions in which researchers are investigating CBD’s potential for future drug treatment:
- Alzheimer’s Disease
- Heart Disease
- Metabolic Syndrome
- Multiple Sclerosis (MS)
- Osteoporosis/Bone Health
- Parkinson’s Disease
If GW Pharmaceuticals can succeed in displacing traditional medications for epilepsy, then watch out. That could potentially clear the way for the development of CBD to combat numerous other conditions – potentially making today’s ineffective and potentially harmful medications obsolete.
Next Article: Cannabinoids and Orthopedic Health