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The global cannabidiol (CBD) market size was USD 2,770.8 million in 2020. The global COVID-19 pandemic outbreak has had an unprecedented and staggering impact on the global economy. This has negatively affected the demand for cannabidiol across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 26.42% in 2020 compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 3,675.1 million in 2021 to USD 55,791.3 million in 2028 at a CAGR of 47.49% between 2021 and 2028. The substantial rise in CAGR is attributed to the market’s demand and growth, coupled with the market functioning returning to pre-pandemic levels once the pandemic is over.
Cannabidiol is extracted from cannabis or hemp, but more specifically from hemp due to its naturally high CBD content. The product is often mistaken for its psychoactive counterpart tetrahydrocannabinol (THC) extracted from the same plant. It has several benefits in treating anxiety, helping prevent seizures, inflammation, and reducing pain. The market is evolving faster due to its increasing utilization in the cosmetics, food, and pharmaceuticals industry. The market exhibits immense growth potential as consumers are becoming aware about the benefits possessed by the product.
The manufacturers are focusing on formulating new product offerings infused with CBD oil to provide the consumers with easy access. For instance, in February 2020, Colgate acquired Hello Product, LLC to launch a brand collection of CBD oral care. The company aims to provide consumers a range of highly effective, naturally-friendly products that will elevate their everyday life. Such factors are expected to fuel the demand for the product in the upcoming years.
In-Store Closure Due to COVID-19 Negatively Affected Sales of CBD Products
The COVID-19 outbreak and measures imposed by several governments such as social distancing and lockdown have resulted in the aggravation of the market. The food services sector and other businesses such as the bakery, beverage servings, and dairy have observed a huge decline in their revenue generation since January 2020. The lockdown has impacted several table services worldwide, and the operators are concerned about the cash flow and weathering the storm. According to the International Facility Management Association (IMFA), 84% of in-store operations were affected due to the pandemic, of which food services represented a significant share in 2020.
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Demand for CBD in Health & Fitness to Boost its Popularity Among Consumers
Consumers seek innovative and healthy food products enriched with nutrients for achieving fitness goals and avoid injuries such as inflammation, pain, and others. The manufacturers are introducing products infused with novel ingredients such as CBD oil. Cannabidiol oils are the legalized and non-psychoactive element of cannabis that has conquered several industries such as food, health products, pharma & beauty, and others. According to the Harvard Health Institute 2018, CBD is commonly utilized to address human life's health issues such as insomnia, anxiety, etc. Thus, the demand for such innovative CBD products from the consumer end proliferates to maintain a healthy life balance.
Increasing Government Approvals for CBD Products to Aid Market
The rapid development of therapies, medicines, and other consumer products derived from cannabis and its positive health benefits has resulted in increased approvals for CBD products. The United States Food and Drug Administration (FDA) has recognized several potential opportunities that CBD may offer and acknowledge the possibilities to infuse it in various food and non-food applications. However, the FDA is working towards protecting public health and improving the efficiency of regulatory pathways to market appropriate products (including cannabidiol acids). The manufacturers are increasingly focused on sourcing CBD to incorporate it into food and other products. Thus, the rising dependency on products will aid global CBD industry growth during the forecast period.
Abundant Utility of CBD in Pharmaceutical Sector to Propel Market Growth
The rapidly growing pharmaceutical industry globally recognizes the importance and benefits of cannabis and its by-products. CBD is one of the major elements of cannabis adopted by the pharmaceutical industry to offer health safety assurance over several disorders. It has properties such as plant-based in nature and natural alternatives to several conventional medicines that are vigorously marketed among manufacturers and consumers worldwide. Thus, the governments in several regions and countries are approving its utility in medicines and other medical therapies, which is expected to expand and increase the sales and distribution of these products during the forecast period.
Additional Barriers in terms of Marketing of CBD Products and Lack of Consumer Awareness
The CBD-based products are gaining wide popularity among consumers in developed economies such as the U.S., Canada, U.K., Russia, and others but not in the developing economies, especially in Asia and the Middle East. The myth associated with the product delivering psychoactive effects due to its popularity among consumers for recreational purposes hampers its market performance. The consumers are not well aware of its benefits, functions, and offerings that are beneficial in several ways. However, the manufacturers are constantly working on creating consumer awareness and developing informative packaging to clear the consumer’s intention towards the product. Thus, the efforts to reinforce the marketing activity will offer growth opportunities for the global cannabidiol market.
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Wider Availability of Marijuana Leads to its Increasing Utility in CBD Production
With the increasing adoption of serving innovative and refined products in the market, the manufacturers are utilizing a huge quantity of marijuana to produce CBD. The availability of marijuana, especially in Europe and North America, has promoted its dominance over hemp-derived products in the market. Furthermore, the increasing legalization and acceptance in developing countries have spurred competition among companies.
Hemp is also gaining popularity, as the demand from consumers is evolving in different regions.
Pharmaceuticals are the Major Consumers of CBD owing to its Health Benefiting Offerings
The pharmaceutical industry is one of the sectors that constantly focuses on innovations, discovery, and research on new and effective medicinal products. The manufacturers have found a huge significance of CBD in their product manufacturing, owing to its wider offerings such as neuroprotective properties, pain relief properties, etc. According to the IQVIA Institute for Human Data Science 2018, the global pharmaceutical industry was valued at USD 1.2 trillion. It was further expected to reach USD 1.5 trillion by 2023 at a 4-5% CAGR. Thus, the rapidly growing sector further ensures a huge demand for cannabidiol and its products in the forthcoming years.
The food & beverage sector fuels the utility of CBD in their processing with the response to meet the demand for fortified foods in the market.
North America Cannabidiol Market Size, 2020 (USD Million)
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North America accounted for the largest cannabidiol market share and stood at USD 1,276.7 million in 2020. Countries such as the U.S. and Canada, have started to liberalize their laws for cannabidiol products in the past few years that has led to an increased acceptance amongst people. The demographics of consumers continue to shift radially, and the utility of CBD has become mainstream among several manufacturers such as food, pharma, and cosmetics. The surging demand among different age groups and gender are expected to prompt their spending toward the product.
The sales of these products, especially smoking, vaping, and edibles, are gaining huge traction in the European market, owing to the rising influence towards tobacco-free products among consumers. The growing demand for such products in the region is expected to create huge competition for North America in a few years.
Asia Pacific holds a significant share in the market, and countries such as China, Japan, and India are representing a developing market scenario for such products. The increasing legalization and approvals of cannabidiol to use in several products offer several manufacturers potential opportunities to operate in the market. For instance, in 2019, Thailand became the first Southeast Asian country to legalize cannabis for medicinal use and research purposes. It also legalized the utilization of hemp for the production of textiles, garments, and others. The capitalization on consumer awareness and product marketing by the manufacturers are some of the key factors driving the market growth.
South America is experiencing a significant boom in cannabis legalization with Uruguay being the first country to legalize it for recreational purposes in 2013. The explosion of this industry in the region is driven by the consumers changing viewpoints as there is more to cannabis than simply getting high. Medicinal use of cannabis is permitted in Peru, Uruguay, and Colombia, while the rest of the countries in the region decriminalized the possession of marijuana for personal use. Thus, these factors have cumulatively aided in driving the regional market.
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Middle East and Africa exhibits a slower growth in comparison to other regions as the use of cannabis and its derived products is prohibited in UAE and Saudi Arabia. However, Lebanon became the first country in the Middle East to legalize cannabis for medicinal use. In Africa, cannabidiol is legalized for medicinal use and it must not contain more than 0.03% of THC. Africanpure an online CBD store in South Africa has emerged as one of the largest commercial CBD oil brands in the country. Thus, these factors are contributing to fueling the regional market growth.
Extensive Focus of Key Players on Launching Innovative CBD Products
The global market is highly regulated by various government bodies across the world. The companies operating in the countries that have received the approval status for cannabis products well earlier than other countries dominate the industry. The product's better know-how, raw material production, extensive research and development for launching various product categories, and a stronghold on the supply chain are a few of the advantages aiding these companies to gain a competitive edge in the market. This is further helping the companies to expand their presence in other countries.
Medterra CBD is one of the major players and focuses on delivering new and innovative products such as oils, gummies, capsules, etc. For instance, In April 2020, Medterra CBD launched innovative CBD Gummies, new benefit-focused products to meet the demand. The strong dominance of key players and their reinforced production and distribution capabilities has resulted in a consolidated market globally.
An Infographic Representation of Cannabidiol (CBD) Market
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The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading distribution channels. Besides this, the report offers insights into the market trends and highlights key industry developments.
Value (USD Million)
Fortune Business Insights says that the global market size was USD 2,770.8 million in 2020 and is projected to reach USD 55,791.3 million in 2028.
In 2020, North America stood at USD 1,276.7 million.
Growing at a CAGR of 47.49%, the market will exhibit steady growth during the forecast period (2020-2028).
The marijuana segment is expected to lead in this market during the forecast period.
The increasing legalization of products is one of the major factors driving the growth of the market.
Medical Marijuana, Inc., ENDOCA, and Cannoid LLC are the major players in the market.
North America dominated the market share in 2020.
Innovative offerings within lifestyle and cosmeceutical products are expected to drive adoption in the global marketplace.
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