Demand for CBD (cannabidiol) products is experiencing strong growth, which we believe will only accelerate following the recent passage of the Farm Bill. From lotions and balms in the topicals category to edibles and beverages targeting health and wellness, the expanding variety of CBD products is matched only by the increase in reasons cited for their use. With a growing class of companies targeting this opportunity and a looming regulatory update from the FDA, we thought it timely to take a closer look at everything CBD.
In this overview, we offer our detailed forecast for CBD product sales in the US and review hemp-derived CBD’s current regulatory status. We also examine some of the science behind CBD’s rise and take inventory of its therapeutic benefits. The hemp CBD supply chain is fleshed out as well, from the cultivation of hemp and extraction to brands and retail distribution. In our view, the overall picture that emerges is compelling: despite lingering FDA uncertainty, we believe CBD’s broad range of therapeutic applications, dramatically increasing consumer interest, and recent federal legalization in its hemp-derived form bode well for future growth.
Many of the companies in the Canaccord Genuity coverage universe have meaningful exposure to the US CBD market. Backgrounds can differ broadly, including companies focused largely on marijuana and hemp-based consumer-branded products, traditional multi-state operators (MSOs) primarily intent on building out dispensary networks, and Canadian LPs developing US-facing revenue streams. For a full discussion of CBD exposure for covered companies, please refer to page 40 of this document.
Notable content includes a state-level forecast and US estimates that differentiate between hemp CBD and marijuana CBD channels, an overview of regional US hemp production, and descriptions of over 30 public and private CBD companies along with their roles within the emerging supply chain. Following an executive summary and high-level takeaways, we begin with a discussion of the science underpinning CBD’s substantial therapeutic promise.