Investors, whether new or experienced, are always looking for the next big company or area to invest in, but with so many different options available it can be difficult to identify an area with high potential for long term growth and profitability.
However, over recent years there is one particular market that has increased in popularity at a higher rate than ever before – CBD.
In fact, many investors have already seen great returns on their investments over the last few years as the CBD market has continued to expand, becoming popular in countries across the world including the United States, UK, and France.
With that being said, many investors are still weary of the CBD market as it is often perceived as volatile and too closely related to cannabis. This is not the case and there are a number of reasons that you should consider investing in CBD now before it is too late.
Why invest in CBD: a summary of the facts
- Cannabis/CBD was legalized for medicinal use in the UK in 2018
- An estimated 6,000,000 people in Britain have tried CBD
- Increasing interest means that the CBD industry is on a rapid growth trajectory
- As of December 2020, cannabis is officially recognized as a medicine by the UN
- CBD has a variety of uses and applications
- CBD is considered safe for humans
The popularity of CBD
CBD has been steadily increasing in popularity across the world for a number of years due to the fact that more and more people are beginning to understand the uses and applications it has which can help treat a number of different ailments.
However, recently the popularity of CBD has begun to skyrocket due to a number of external factors including the fact that the UN has recently voted to recognize cannabis, and therefore CBD, as a medicine. Furthermore, the number of reports CBD has received from the likes of Bloomberg, Forbes, and the New York Times has helped increase knowledge of CBD and bring it into the mainstream.
The CBD market has also experienced significant growth due to the recent COVID19 pandemic with many industry news outlets reporting that the sales have soared during the coronavirus pandemic with expected sales to surpass $20billion by 2024.
Online CBD sales, in particular, have increased as opposed to physical CBD stores, which naturally came as a result of lockdowns and government restrictions.
Why has this happened? The sad reality of the pandemic has left many in financial trouble, worrying about their next pay-check and whether they can afford to keep a roof over their heads and dinner on the table.
This increase of worry, anxiety, and stress from the pandemic has led people to consider other medical alternatives to steady their nerves and ease their pain, as Doctor Surgeries remained closed during the early stages of lockdown.
It also helps that CBD is so widely accessible now compared to what it was in 2014 and that online eCommerce stores are popping up daily. Now you can order your CBD products online and receive them the same week.
With this increased popularity comes increased CBD sales. In fact, in 2014 the US reported 108.1 million CBD sales despite the fact that very few states had legalized the sale of CBD.
Popularity is always essential when looking for the next big industry to invest in as it signifies the potential for long-term growth and significant returns on investment and has helped contribute to the success of many different companies including Apple and, most recently, Tesla.
Although your big names help when it comes to investment, don’t shy away from the many indie businesses that are cropping up and making their mark on the CBD market and who are actually leading the market in some areas, especially in the beauty sector.
Innovation is a key driver within the CBD market as consumers are always looking for something that’s different but safe and familiar. On top of that, you now have a generation of buyers who are concerned with the sustainability of products and how they are sourced, which for most of these indie brands is key to them receiving more interest and sales which is keeping them relevant against some bigger names.
The Safety of CBD
One of the main concerns that people have regarding CBD is its safety for use and the potential side effects it can cause as well as the fact that CBD and cannabis are often used interchangeably. However, CBD contains none of the THC that cannabis does meaning that the psychoactive effects are nullified, helping to make CBD safer for human consumption.
Furthermore, the World Health Organisation declared in September 2017 that CBD was safe for human consumption meaning there is no reason to be concerned about the safety of CBD negatively impacting the industry in the future.
This has also been reflected as the novel food status of CBD extracts had been confirmed in Jan of 2019 and the Novel Foods catalog has been updated to reflect this change.
Attractive Valuations
There are currently a number of CBD companies already being openly traded the majority of which have already received encouraging valuations which is a strong signifier of the potential the CBD industry has.
In fact, the two CBD companies with the largest market share, Charlotte’s Web and CV Sciences have a combined estimated value of 1.912 billion.
This figure is only expected to grow as CBD becomes more and more well known amongst Americans and the world. Over the next few years as awareness of CBD begins to spread and join mainstream culture, CBD companies could quickly become a lucrative investment opportunity.
The uses and Applications of CBD
As mentioned previously the rise in popularity of CBD is in no small part thanks to the number of conditions and ailments it can help treat. Due to its relaxing and soothing effects as well as its anti-inflammatory properties, CBD has emerged as a useful tool to help treat things such as:
- Anxiety and stress
- Inflamed joints and muscles
- Epilepsy
- Back pain
- Muscle pain
Furthermore, new discoveries are being made every day, meaning that the list of ailments CBD can be used to treat is only set to grow as time continues which is sure to help boost the valuation of the CBD industry and make it ideal for both new and experienced investors.
Aside from the reasons people take CBD, investors should also take note of the variety of products that are on offer on the market. It’s not just your usual CBD oils but CBD has placed itself among the health and wellbeing section of the isle as the beauty industry takes their slice of the CBD pie.
In Europe especially, Hemp and medical products have been a success within the beauty community and currently, CBD skincare alone could generate $959million in revenue by 2024. One reason for CBD being quite popular among the beauty industry is its low-risk factor, meaning people can try hemp and CBD products without having to physically consume it, allowing for people to still reap the benefits but in a way that’s more familiar to a consumer.
So next time you’re looking around the industry and seeing what’s trending, don’t forget to check out the health and beauty section. You’ll find a spectrum of popular products from skin balms to bath bombs which have been able to disconnect themselves from the negative stigmas attached to oral CBD products.
How to invest in CBD
As we have discovered there are a number of different reasons why you should invest in CBD and why now is the right time. However, understanding how to invest in CBD is a different matter as the industry is still so new.
Before placing any money into the CBD industry, it is essential to conduct your research into the numerous different brokers available it is recommended that you find one which suits your specific goals and aspirations for your investments.
Whilst a broker isn’t essential having someone more knowledgeable that can help guide you through the process can be hugely beneficial, especially to new investors.
After finding a broker you can trust you will need to conduct research into the method you will enact your investment in CBD. There are a number of different ways of doing this and your broker will be able to advise which one is right for you based on your skills, knowledge, and understanding of CBD and investing.
Alternatively, you could invest in a CBD retail store either by starting your own or buying shares in existing companies like the ones mentioned above. Essentially, investing in CBD all comes down to one thing – research.
If you have conducted all the essential research and fully understand your investment there is no reason that you won’t be able to see large capital growth over the next few years as the CBD industry becomes more popular and continues to grow and expand across the globe.
Author Bio
Dave Hartshorne, Managing Director of Simply Canna has a background in online retail & has made it his mission to ensure others do not fall victim to being sold low-quality CBD products by sourcing a range of good brands. By creating his brand with a team of passionate people, they help spread the word about the benefits of CBD.
