CBD Industry Soars in Wake of Farm Bill; Massive Growth Projected to Continue
DENVER, March 19, 2019 /PRNewswire/ --Following the passing of the 2018 Farm Bill, CBD sales have continued their massive growth in the United States and beyond.
- Cannabidiol (CBD), a chemical found in cannabis, has seen a huge growth in sales over the past few years.
- CBD can be derived from hemp, and the passing of a new farm bill in the States makes this form of cultivation legal at a federal level.
This forms part of wider growth in the cannabis market, as companies expand their operations in North America and even beyond.
Wildflower Brands Inc. (OTC:WLDFF) (CSE:SUN) (WLDFF Profile) is among the companies benefiting from this market, with an increase of more than 300 percent in online sales for its CBD products last year. Some companies are specializing in particular niches, such as Green Organic Dutchman (OTC:TGODF) (TSX:TGOD) with its focus on sustainable organic plants. Aurora Cannabis Inc. (NYSE:ACB) (TSX:ACB) is making moves into Europe, with cannabis oil sales in Germany and investment in a Portuguese grower. Green Growth Brands Inc. (OTC:GGBXF) (CSE:GGB) is launching new products and opening its own shops across the United States. And HEXO Corp. (NYSE:HEXO) (TSX:HEXO), which recently expanded from medical cannabis into the recreational space, has seen gross revenue increase more than 1,000 percent as part of this rising tide.
To view an infographic of this editorial, click here.
CBD Drives Growth for Hemp
Hemp, a plant that has long been out of the public eye, is returning to the spotlight in a big way. A nonintoxicating form of cannabis, hemp was primarily used for centuries as a natural source of fibers, which were used in cloth, rope and even building materials. Many ships in the great age of sailing relied on hemp for their riggings.
But in the sweeping anti-drug crusades of the 20th century, hemp became caught up in attacks on cannabis. Campaigners who were determined to save consumers from their own pleasures had cannabis outlawed at a time when there was little effective way of distinguishing between hemp and other forms of cannabis. No longer needed for cloth and rigging, hemp was made illegal.
Now all that has changed — nowhere more dramatically than in the United States of America.
The Farm Bill
Hemp is making a comeback thanks to the growing popularity of cannabidiol (CBD), an active ingredient found in many forms of cannabis. It's an ingredient that companies such as Wildflower Brands Inc. (OTCQB:WLDFF) (CSE:SUN), a creator of plant-based health and wellness products, have been making extensive use of in recent years. Combined with other naturally occurring plant compounds, full-spectrum CBD is used in a range of Wildflower products, including capsules, topicals, soaps, tinctures and vaporizers.
Until recently, the production of CBD in the United States faced serious restrictions and uncertainties. Many states had legalized the production of cannabis in some form, either for medical or for recreational use. In addition, there were licensed trials of the cultivation of hemp, which can be rich in CBD. But all of these plants were illegal at a federal level, meaning that even with state-level approval, cultivators faced financial limitations and the threat of government action.
All that changed in December with the passage of the 2018 Farm Bill. One of a regular series of bills governing the U.S. agricultural sector, this bill removes hemp from the list of controlled substances, making it unambiguously legal for farmers to grow hemp. This changes the landscape for CBD products in the States. Companies such as Wildflower, which has already got its products into many outlets in the health and wellness sector, will be able to expand their reach even further.
States have the right to set their own rules around restricted substances, and some states have taken an unsympathetic attitude to CBD. The Farm Bill doesn't force states to change this attitude, but there are already signs that public opinion on all levels are changing. The regulations in many states assume adherence to the federal guidelines, and some states, such as Alabama, have already softened their stance since the Farm Bill became law.
Under the Farm Bill, hemp production will be tightly regulated. Most states already have existing regulations in place, and the U.S. Department of Agriculture will be developing its own regulations as well. But for an established company such as Wildflower, which already works in California, Washington and New York, this shouldn't be a problem. Cannabis companies are accustomed to working in a tightly controlled environment and meeting the legal standards set by state legislators, as well as the product standards required by retail outlets. In that context, working within new federal regulations shouldn't present a significant challenge, while the existence of consistent national standards will create opportunities for growth.