Editor’s Note: Today’s post comes from Mike Luce, co-founder of High Yield Insights, one of the cannabis industry’s first marketing and strategy firms. Here he presents the first in his two-part series on the mysterious world–and spurious marketing–of CBD, a product I’m sure you’ve seen advertised and made available nearly everywhere. His follow-up will run on Tuesday next week. Stay tuned!
Americans are consumed by fads in food, drink, and wellness. We swing from one subject of fascination to another: antioxidants, açai, resveratrol, fat free, healthy fats, active cultures, spiked seltzers, organic, biodynamic, anything free range, you name it.
Yet the latest fad to hit the USA Today-level is unique in post-WWII America. Interest in CBD, the three letters you see everywhere, has reached a fever pitch. This does necessarily set CBD apart from other fads in consumer goods, but hitting the mainstream radar so fast and so hard puts CBD in the upper echelon. The potential of CBD is largely unknown and the future scale of what’s starting to be known as the CBD industry is unpredictable. Consumers, including those using CBD today, poorly grasp the nature of CBD, lack any precise understanding of how CBD works and what it does, and express significant concerns about safety. Yet forecasts place the CBD market at $15-20 billion by 2025. Contrast those figures with the latest numbers by some household products, and CBD’s estimates truly pop:
- Anxiety and depression treatment: $18 billion
- Organic produce: $66 billion
- US fast food restaurants: $273 billion
Sales of CBD will net out close to $5 billion in 2019, a puny number in comparison. But the last industry on the list above can’t expect more than low single digit annual growth rate. To reach the market size forecasts, CBD will experience compound annual growth rates over 100 percent. That new users will drive that growth should be obvious.