CBD Market Trends in 2020 – The CBD industry is one of the most promising (albeit unpredictable) business sectors in the world. Unfortunately, it is quite difficult to develop clear projections due to the volatility of the industry. This is especially apparent when comparing 2019 hemp industry projections against our current 2020 outlook.
For example, though the hemp market is still on the rise, it is not growing at nearly the pace that experts previously projected. According to a recent Bloomberg article, the CBD market should reach about $4.7 billion in sales in 2020, which is almost half of what they projected in 2019. Though demand is still on the rise — primarily for CBD-based products — both product and demand are finally starting to level off.
Today, we’ll discuss current CBD market trends and what they mean for hemp farmers everywhere.
Fewer CBD Industry Players
COVID-19 has thrown quite the wrench in the hemp market. Business closures throughout the nation have forced many small business owners to close their doors, perhaps never to reopen. Delayed COVID relief funding may be partially to credit for this trend. However, it is the strict or inconsistent hemp industry regulations are also a major culprit.
2020 has notably fewer industry participants than the previous year. However, politics and financial distress are only part of the equation. More often, it is simple business mismanagement that drives hemp companies out of business. To be clear, many who are new to the industry do not understand the complexities of CBD hemp farming and go all-in before they see the flop. Whether the result of poor planning, insufficient labor, or overly-frugal spending habits, those who were not prepared for the long-game simply had to fold their hands.
CBD Product Demand
CBD has certainly had its time in the spotlight, finally proving that therapeutic cannabinoids are not all psychoactive. And, with the passing of the 2018 Farm Bill (which legalized commercial production of hemp products), CBD quickly gained mainstream acceptance.
As CBD’s popularity grew, so did its market value. The cost of CBD products skyrocketed to make up for the high cost of cultivation and processing, and for a while, consumers were happy to pay. Of course, the exponential cost of CBD products would have to level out eventually, and in 2020, it certainly did. Customers will no longer pay exorbitant prices for CBD products, thus forcing rates to stabilize. Fortunately, the cost of production is also shrinking, thus improving margins despite the lower average price tag.
Additionally, many consumers and hemp processors are discovering new cannabinoids on which to focus. CBG hemp strains and CBD-derived Delta-8 THC give consumers more cannabinoid options, thus deferring the focus from CBD-only products. As such, the demand for CBD is leveling, though it’s certainly not going away.
What These CBD Market Trends Mean for the Hemp Industry
At the risk of sounding cliché, the hemp industry really does weed out the weak ones. This is not to say that only experienced cannabis growers can cultivate hemp successfully. However, it does highlight the relentless drive hemp industry professionals must have to be successful. Those who are willing to study the plant, follow detailed protocol, learn from their mistakes, and pace their business growth will have staying power and a much greater chance of hemp industry fortune.
This trend is also ideal for the consumer who will gain affordable access to quality hemp-based products. The quality of CBD products will stabilize, with only the highest caliber items making it to store shelves. Consequently, as the industry develops, both price and predictability will level off.
Final Thoughts About Current CBD Market Trends
Though the demand for CBD products is leveling off, it is certainly not declining. There is still ample time to carve a niche in the hemp industry, though not without plenty of drive and dedication to the process.
Regardless of where you are in your hemp journey, we encourage you to absorb as much information as possible. Also, remember to practice your craft diligently to establish and maintain yourself as a leading industry player.
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