Global Cannabidiol (CBD) Market (by Product, Source, End User, Distribution Channel, & Region): Insights and Forecast with Potential Impact of COVID-19 (2022-2026)
CBD is a chemical compound produced from hemp and marijuana plants that is commonly used to treat medical conditions such as pain relief, anxiety, dystonia, Crohn's disease, Parkinson's disease, and many more. As a result, CBD is becoming increasingly popular in a number of regions around the world. CBD is available in many different forms, including pills, patches, oils, extracts, vape pens, and topical skin treatments.
CBD's medicinal properties have raised its demand for health and wellness purposes. CBD-based products are already being purchased by consumers and traditional merchants because to its medical benefits. The increasing number of regulatory approvals is a significant market driver.The global CBD market is forecasted to reach US$6.17 billion in 2023, progressing at a CAGR of 27% during the forecast period.
- By Product: In terms of product, the report identifies eleven segments, namely, Oil, Tinctures, Capsules, Cream and roll on, Isolates, Transdermal Patches, Suppository, CBD Inhalers, Vape oil, Tablet and Others. The oil segment accounted for the largest share of the market. CBD oil is used to treat most common illnesses such as chronic pain, psychological disorders, nausea, etc. The non-psychoactive qualities of CBD (Cannabidiol) oils compared to other products like buds and resins, and legislation pertaining to extracts are pretty lenient. Moreover, the market is expected to grow at the highest CAGR, due to increasing medical uses of the product.
- By Source: The report splits the global market into two segments, based on source: marijuana and hemp. The marijuana segment dominated the market by occupying maximum market share. The key factors benefited the marijuana based CBD market is the increasing adoption of medical marijuana for the treatment of chronic diseases like arthritis, Alzheimer’s, and cancer along with mental disorders such as depression, anxiety, and epilepsy. Demand for hemp based CBD is also increasing because hemp plant contains high amount of CBD and low THC.
- By End User: According to the end user, the market is divided into two segments: medical and other end users. The medical segment dominated the market by occupying highest share of the market. The medical segment is further divided into six segments on basis of application: Pain Management, Anorexia, Nausea, Muscle Spasms, Seizures and Others. Due to various medicinal benefits, medical business has started offering CBD infused products to the consumers. Small and large corporation in the medical business have invested heavily in CBD. Moreover, various government around the world legalized medicinal use of CBD.
- By Distribution Channel: The report includes bifurcation of the market into two segments on the basis of distribution channel: online and offline. The offline segment dominated the market with largest market share. Offline marketing's main objective is to inform and interact with clients directly about the benefits of CBD. To enable CBD goods to be properly displayed in retail stores, some CBD companies have formed partnerships with pharmacies, clinics, yoga studios, and even pet stores. Since the industry is still in the infancy, a bigger share of sales are anticipated to come via offline distribution channels. However, online segment is also coming with new ways of marketing strategy. Increasing paid advertisement in social medial platform would support the online segment growth in future.
According to this report, the global CBD market is divided into four regions: North America, Europe, Asia Pacific and RoW. The countries covered in North America region are the US, Canada, and Mexico, while Europe includes France, UK, Italy, Germany, Netherlands and Rest of Europe. Moreover, China, Japan, Thailand, India and Rest of Asia Pacific are included in the Asia Pacific region.
North America dominated the market by occupying largest share of the market. North America was the largest market in terms of legalization of CBD for medical and research purposes. Presence of number of major market players is a remarkable factor for the market growth in the region. Furthermore, increasing investment by various companies and favourable government initiatives would drive the market growth in the coming years.
Top Impacting Factors:
- Increasing Millennial Population
- Rising Government Approvals of CBD Products
- Growing Application of CBD in Skincare Industry
- Increasing Prevalence of Chronic Pain
- Availability of Duplicate & Synthetic Products
- Lack of Awareness Among Consumers
- Rising Online sales of Cannabidiol (CBD)
- Use of Blockchain Technology
- Rising Demand for Natural Products
- Expanding Research Areas
- Driver: Increasing Millennial Population
Among millennials, the multipurpose cannabis compound has made a name for itself, and its future appears bright. Compared to adults in general, millennials are roughly twice as likely to have tried food and drink items containing both CBD and THC. Pain relief is the health benefit of CBD that is most commonly mentioned. But millennials, the generation credited with normalizing discourse about mental health, are particularly drawn to CBD for its benefits for mental wellness, which include easing symptoms of depression, reducing anxiety, and enhancing sleep. Popularity of CBD among millennial is increasing and millennial population is increasing as well, which would boost the market growth in the coming years.
- Challenge: Availability of Duplicate & Synthetic Products
Products containing cannabidiol have become more popular in recent years as a result of widespread awareness for a variety of medicinal conditions. Because of this, it is now possible for unlicensed producers to create synthetic products devoid of cannabidiol that have the same effects as the drug while also being harmful to the user's health. For instance, more than 2,800 patients had been hospitalized for e-cigarette, vaping, use-associated lung damage (EVALI) as of February 2020, and about 68 fatalities had been recorded in the US alone. As a result of these instances of mislabeling and the use of synthetic marijuana, the FDA had sent warning letters to numerous businesses after testing their products and discovering that they had no traces of CBD, consequently reducing market demand.
- Trend: Rising Online sales of Cannabidiol (CBD)
An interesting opportunity for CBD online enterprises is presented by the growth of online sales and the rising popularity of CBD in general. Majority of the sales of CBD products are being made through online channels as people prefer to use e-commerce platforms because of the convenience provided by them and also the heavy discounts offered by retailers. Online marketplaces would provide tremendous opportunities to the CBD product manufacturers to sell their products. Rising e-commerce platforms also widen the reach of the manufacturers and enable them to sell CBD products even to those customers who were not aware about the CBD based products. Growth of the e-commerce sales of CBD would affect the CBD market positively, enabling CBD product makers to widen their customer base.
The COVID-19 Analysis:
People all throughout the world have been impacted financially and psychologically by the COVID-19 pandemic. Till the end of 2019, the CBD market growth trend was positive. However, the COVID-19 outbreak restricted market expansion. The CBD business, which requires substantial research to generate a specialised product, was unproductive because of a decrease in government funding during the lockdown period. From the standpoint of the researcher, a single study constitutes a substantial financial investment. Government was unable to meet demand because of the mandated lockdown.
Despite COVID-19's implications and uncertainty, the CBD market continued to see merger and acquisition (M&A) activity in the first half of 2021. Furthermore, as various governments recognized the health benefits of CBD infused products, research and development in the sector has increased. Government and various research organizations started investing in the research and development of CBD and to understand the various dimensions of CBD infused items. The technological developments brought after COVID-19 outbreak is expected to assist the market growth further.
Analysis of Key Players:
The global CBD market is fragmented. Global players has strong dominance in the market, however, domestic players like ENDOCA has been a pioneer in the field of CBD. The key players of the global CBD market are:
- Medical Marijuana, Inc.
- Jazz Pharmaceuticals PLC
- Aurora Pharmaceutical, Inc.
- Canopy Growth Corporation
- CV Sciences Inc.
- Elixinol Wellness Limited
- High Tide Inc. (NuLeaf Natural LLC)
- Tilray Brand Inc.
- CBD American Shaman
- Isodiol International Inc.