CBD Products Garner Credibility as Regulators Change Tact

Since the removal of hemp from the controlled substances list, the commercialization of hemp-based products has been booming. Researchers have been able to conduct more trials on the benefits of CBD and its highly beneficial therapeutic effects. With research flourishing, CBD products are expected to grow nationally. Andy Rodosevich, CEO of Hemp Depot, credits the vast amount of products of which CBD is a fit. With wholesale numbers of CBD growing, the upcoming products we can expect to be derived from the plant are growing also.


Following the removal of hemp from the federal prohibition under the Controlled Substances Act of 1970 (CSA), the cannabidiol or CBD market has been positioned to witness exponential growth. Hemp is derived from the cannabis plant and has been used for centuries for its multifaceted applications. However, nearly a century ago, federal regulators deemed hemp unsafe because it was classified under the cannabis family. The common misconception about hemp was that the plant caused psychoactive effects on the consumer. However, emerging studies have completely contradicted the misunderstanding. Consequently, U.S. federal regulators decided to delist hemp from the controlled substances list. Shortly after, the U.S. passed the 2018 Farm Bill, which authorized the commercialization of hemp-based products and within a short period of time, hemp-derived CBD products began to appear at retail locations throughout the nation. CBD is the active compound found within the hemp plant while THC is the active ingredient in the marijuana plant, which also falls underneath the cannabis family. While the two plants both derive from cannabis, they are widely different in their biological makeup. As such, after extensive clinical trials, researchers have noted that CBD offers highly beneficial therapeutic effects without the stimulation of psychotropic effects. In fact, both THC and CBD have been praised for their therapeutic benefits, but regulators presumed CBD to be much safer for consumers. Notably, the U.S. Food and Drug Administration approved the first cannabis-based drug last year, Epidolex. The orally-ingested drug is used to treat Dravet and Lennox-Gastaut syndromes, which are severe forms of epilepsy that occur predominantly during childhood. Now, the FDA acknowledges that CBD can potentially become an effective alternative medicinal treatment to a number of traditional treatments. However, the agency is requiring researchers to provide more data on the efficacy of CBD. And as research continues to ramp up clinical trials, industry experts believe the marketplace is positioned to flourish. As a result, the U.S. hemp industry is expected to expand at a healthy CAGR of 18.4% throughout a five-year period from 2018 to 2022, according to data compiled by New Frontier. Smart Decision, Inc. SDEC, -15.00%, HempAmericana, Inc. HMPQ, -5.20%, Aurora Cannabis Inc. ACB, -0.61% (ACB), iAnthus Capital Holdings, Inc. ITHUF, +0.42% (IAN), MariMed Inc. MRMD, +4.83%

The removal of hemp from the CSA is anticipated to create a financial domino effect, according to New Frontier. In particular, the firm noted that banks will gain the confidence to provide accounts and more robust financial products to hemp companies. In return, it will allow credit card processors to process hemp-derived CBD accounts, both online and in major retailers. Subsequently, more and more retailers will explore the possibility of adding CBD-based products onto their shelves. As of late 2018, New Frontier estimated that the hemp-derived CBD market witnessed less than USD 1 Million in product sales. However, by 2022, it is anticipated that the mass CBD market will grow up to USD 430 Million in sales. Notably, CBD products have already tapped into major retailers such as Walmart, CVS, Walgreens, and Amazon. And as the craze around CBD products continues to accelerate, more retailers are expected to start commercializing products in order to keep pace with competitors. “Because of the tremendous range of products in which CBD is a fit, we expect to see it on shelves, literally, everywhere. Wholesale order numbers are climbing dramatically, which is one of the first signs of significant market expansion,” said Andy Rodosevich, Chief Executive Officer and Co-Founder of Hemp Depot.

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