Friday, September 29, 2023

Growing CBD Market Lures Mainstream Businesses

Innovative companies that are committed to the sector may be in a stand-out position to capitalize on a rise in demand along with long-term trends toward growth and maturation.

By Margaret Jackson

With the production of hemp legalized under the 2018 Farm Bill, some mainstream supplement companies are positioning themselves to get into CBD-infused vitamin products — a market that was estimated at $1.64 billion in 2020 and is expected to reach $13.9 billion by 2028, according to a report from Grand View Research.

While the Farm Bill did not legalize the extraction of cannabidiol (CBD) for infusion into food, beverage and nutritional supplements, some mainstream vitamin and supplement manufacturers believe it’s only a matter of time. Rather than wait until the CBD supplement market is saturated, they’re carving out their niches now.

hemp CBD
Photo by HenrikNorway/Getty Images

Many CBD companies also are enlisting the help of former professionals in the mainstream consumer packaged goods businesses in their efforts to gain legitimacy. Aurora Cannabis Inc., for example, appointed Procter & Gamble Co. Director Nelson Peltz as a strategic adviser, and Los Angeles-based Ignite International Ltd. tapped former P&G executive Curtis Hefferenan as global head of sales.

Hemp is a cannabis plant, but it’s different from marijuana in that it cannot contain more than 0.3% of THC — the compound in the plant that’s associated with getting high. CBD can be extracted from both the hemp plant and the marijuana plant, which contains a higher concentration of THC.

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CBD is often sold on its own because it doesn’t cause the high that comes with THC. It’s available through many mainstream retailers, including grocery stores, pharmacies and online. Many people believe it’s an effective remedy for pain and other health conditions, including inflammation, multiple sclerosis, epilepsy and Crohn’s disease.

As supplements infused with hemp-derived CBD become more mainstream, companies like Nevada-based Grove Inc. are banking on consumers recognizing the benefits of the compound and incorporating it into their daily lives.

RELATED: 10 Mainstream Businesses Betting On CBD

Since its initial public offering (IPO) in June, Grove has embarked on a journey that will establish it as a leading manufacturer of hemp-derived CBD-infused nutritional supplements. The Nevada-based company offered 2.2 million shares at $5 per share to raise about $11 million in its IPO.

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Photo by BATCH by Wisconsin Hemp Scientific via Unsplash

Grove used the proceeds to acquire VitaMedica, an online seller of nutritional supplements, in an effort to gain access to the global nutraceuticals market.

The gummy vitamin market is estimated at $5.9 billion this year and projected to grow to $10.6 billion by 2025, according to a recent report from ReportLinker, which attributes the rising incidence of vitamin deficiencies, undernourishment and growing demand for on-the-go supplements that taste good.

The overall landscape of the market has taken shape rapidly. Innovative companies that are committed to the sector, like Grove, may be in a stand-out position to capitalize on a rise in demand along with long-term trends toward growth and maturation.

This article originally appeared on Benzinga and has been reposted with permission.


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