While the cannabis industry as a whole is expanding, it is the use of CBD extracted from hemp that is proving to be the perfect entry point into the industry for businesses both small and large. According to Statista, the U.S. consumer sales of cannabidiol (CBD) are expected to reach $1.8 billion by 2022, while other studies find it is on track to grow to a whopping $2.5 billion by 2023. But the question remains, are there still opportunities available in the hemp industry? Absolutely. Here’s our take on what the year ahead could mean for those in the hemp extraction business.
New Opportunities for Hemp Growers
At the end of 2018, the U.S. Congress passed the Farm Bill, a somewhat controversial distribution of aid and legal changes for farmers across the country. One of the most significant changes is that it opened the doors to growing a highly desirable cash crop: hemp. The bill removed hemp from the list of controlled substances and left it to states and territories to establish growing requirements or restrictions.
Another enticing change for farmers was new access to federal farm programs. With hemp no longer a federally illegal substance, farmers can grow and sell the plant without hindering their ability to receive federal aid.
The Farm Bill caused a ripple effect across the United States. CBD oil is suddenly in high demand as companies look to add it to a number of products: food, beverages, beauty, skincare products, and more. For growers in North America, this means a greater demand for high-quality hemp plants.
Increase of Importance on Pure CBD Extraction
The changes caused by the Farm Bill also mean greater opportunity for extraction companies. As long as the CBD oil extracted from hemp contains less than 0.3% THC and meets the standards set by the Food and Drug Administration, it is legal to produce.
The FDA has strict requirements regarding the purity and potency of hemp CBD oil. As extractors look to add the product to their list, they are also focusing on their methods to maintain the quality and purity regulated by the FDA. Every state is different in their management of purity, but those most concerned with producing the highest quality CBD are choosing CO2 extraction. Considered to be one of the most effective and safe methods of extraction for food, health, and skin products approved by the FDA, CO2 extraction has three major benefits when it comes to producing CBD oil. The solvent is environmentally safe and leaves behind no residue, making the extracted product safe for consumption and application. CO2 allows extractors to select the specific compound they wish to extract, producing CBD with only small traces of THC (if any) and meeting FDA requirements. Finally, CO2 is incredibly versatile, leaving extractors with opportunities in other industries outside of hemp and CBD oil, should the future market take a different shift.
As the desire for CBD products increases in the U.S., the FDA will continue to expand its efforts to clamp down on low-quality CBD oil, which will only reinforce the need to choose methods that deliver pure products.
More CBD Retailers will Join the Market
Once hemp CBD oil was legalized in the U.S., a multitude of products started to appear. CBD donuts, coffee, water, and a number of speciality sports drinks joined the more common products like balms, tinctures, and lotions. Now, consumers are even purchasing CBD biscuits and food for their pets.
Along with the expanding use of CBD oil is the growing list of retailers that are making these products available in their stores. CVS, Kroger, Walgreens, and Rite Aid are among the top brands that have already started offering CBD topicals and other products in many of their stores. Products are also available in over 10,000 gas stations.
As CBD oil products become more widespread and available outside of local pot shops, demand for high-quality CBD will continue to grow, adding to what analysts are predicting to be part of an $80 billion cannabis industry by 2030.
Accessing the Billion Dollar Hemp CBD Industry
What do these 2020 trends in hemp production mean for your extraction business? While the global cannabis industry is growing, the slow legalization of marijuana in the U.S. is contributing to more widespread use and acceptance of CBD.
Regardless of where the numbers land the trajectory for CBD is headed upward, creating opportunities for growers, extractors, and investors alike. Legalization doesn’t only create consumer demand; it also opens doors for easier financing for those in production. Even the smallest extraction operations will have access to big opportunities in hemp this year.
Vitalis helps prepare farmers and extractors in the hemp industry. Our state-of-the-art extraction equipment, services, and financing lead to better partnerships, higher quality products, and cutting-edge opportunities. Contact us.