In 2019 cannabidiol – better known by its abbreviation “CBD” – became the #1 dietary supplement in the United States. There are many reasons why consumers (and investors) should see this as only a starting point for the CBD market and CBD sales.
1) Boosting the immune system
Consumers have never been more health-conscious than they are in 2020. And at the top of the list of consumer concerns is boosting/supporting our immune system.
A recent Seed Investor article highlighted the role of CBD in fortifying the human immune system. We listed four ways in which CBD consumption provides either direct or indirect support for our immune system.
- Increasing natural “killer cells” that fight disease/infection.
- Supporting a healthy inflammatory response.
- Maintaining healthy gut microbiota
- Relieving stress/anxiety
Supporting the rise of CBD usage is that it is as economical as it is beneficial.
CBD-rich hemp can have ~20% CBD content. With large-scale hemp cultivation at cash costs at/below $1 per gram, this means that pure CBD can be extracted from hemp for roughly $5 per gram.
2) Increasing use of CBD in professional and amateur sports
Both professional and amateur athletics are temporarily suspended for public health reasons. Ironically, this provides the governing bodies of these sports more opportunity to study the health benefits of CBD – and loosen regulations on CBD use.
Major League Baseball is the highest profile sports body to remove CBD (and cannabis itself) as “a banned substance”.
Other major professional leagues in North America, including the NFL, NHL, and NBA are actively reviewing their policies on cannabis usage in general and CBD use in particular.
A growing list of retired professional athletes have publicly (and strongly) endorsed the use of CBD for pain relief, recovering from games and training, speeding up healing from injuries, and general health promotion.
Current U.S. soccer star (and Golden Boot winner), Megan Rapinoe, has publicly expressed the importance of CBD to her own career.
Elite athletes (both professional and amateur) are going to rapidly jump on the CBD bandwagon. And. As always, ordinary “weekend warriors” can be expected to emulate those athletes.
3) Increase in licensed and approved CBD-based drugs
In June 2018, the U.S. Food and Drug Administration (FDA) approved the use of Epidiolex – the world’s first CBD-based pharmaceutical product. Epidiolex is already proving to be very successful in the treatment of two rare/severe forms of epilepsy.
Epilepsy treatment is a multi-billion dollar market. Because of the remarkable safety/tolerance profile of CBD, Epidiolex has been approved for use in patients two years of age and older.
GW Pharmaceuticals (US:GWPH), the maker of Epidiolex, has recently obtained additional approval of Epidiolex for the treatment of seizures associated with Tuberous Sclerosis Complex. At almost the same time, the FDA removed Epidiolex as “a controlled substance”.
Dozens more CBD-based pharmaceuticals are also moving through the clinical trials process. Cannabis biopharma companies are racing to be the next to produce a CBD-based licensed pharmaceutical – with billion-dollar potential.
While the clinical trials process can be a long road, ultimately these licensed-and-approved CBD drugs may be the single largest driver of CBD revenues. And because it is so safe, CBD-based clinical research is eligible for regulatory fast-tracking.
4) Celebrity endorsements
The last two years has seen the rise of “influencers”. Instant communications and the increasing commercial use of social media has made endorsing consumer products big business.
A cannabis industry article compiled a list of some of the most prominent CBD influencers.
Apart from the growing “A-list” athletes who have endorsed CBD, a flock of actors, musicians, and other celebrities have publicly (and often passionately) endorsed CBD – for numerous reasons.
Seth Rogen, Martha Stewart, Morgan Freeman, Willie Nelson, Kim Kardashian, Michael J. Fox, Montel Williams, Gwyneth Paltrow, Alessandra Ambrosio, Gene Simmons, Tom Hanks and Oliver Stone are just some of the celebrity influencers who back CBD usage.
Few consumer products – in any sector – can approach the CBD market in terms of both the quantity and quality of influencers promoting its (safe and healthy) use.
5) FDA regulatory movement
What makes the rise of CBD especially impressive in the United States is that (to date) the FDA has been a major roadblock in the growth of CBD commerce.
The World Health Organization (WHO) unequivocally endorsed the usage of cannabidiol—two years ago.
Sadly, the FDA remains mired in the dinosaur mentality of the U.S. “War on Drugs”, arguably History’s most deeply-flawed law enforcement campaign.
While the FDA has removed Epidiolex as a controlled substance, it is using research on Epidiolex itself as an excuse to continue to stall on a commercial regulatory framework for CBD.
Typically (as a health supplement) CBD is recommended in daily doses of less than 50 mg per day. Empirical research indicates that even at up 1,500 mgs per day CBD is “tolerated well by humans” (i.e. safe).
But the FDA has been pumping the (human) equivalent of up to 8,000 mgs of CBD per day into lab rats – and then calling CBD “potentially harmful”. Even water is poisonous and toxic in excessive quantities.
The FDA is continuing to pull CBD products off of store shelves and generally undermining CBD commerce. When sanity finally prevails and the FDA removes its irrational restrictions, CBD sales in the U.S. can be expected to catapult by several multiples.
CBD is already big. It’s going to get much bigger. And this year there are more-and-stronger drivers of CBD demand than ever before.
Published at Wed, 15 Apr 2020 10:00:02 +0000