With the legalization of marijuana in an increasing number of countries, more people are being curious, if not getting confused, about it. Of most particular interest are the specific laws that govern marijuana. People want to be certain on how they can legally take advantage of the claimed health benefits of the world’s next “wonder drug.”
For starters, marijuana products that are accessible to people legally are divided into three groups, namely: medical, recreational, and cannabidiol (CBD). Medical marijuana is accessible through prescriptions. On the other hand, recreational marijuana refers to all types of products used for non-medical purposes. To understand the latter fully, one also has to know the basic description of the third group, the CBD products.
Essentially, the cannabis plant contains about 113 identified cannabinoids and the most popular are CBD and tetrahydrocannabinol (THC). The difference between these two can be explained with scientific technicalities. The basic distinction, however, can be simplified by saying that CBD lacks the psychoactive effects which make users feel high. THC, meanwhile, is the main psychoactive component of cannabis. Since CBD cannot make users feel, in colloquial terms, “stoned,” it is largely the most common ingredient of products that are legalized across different countries.
The overarching interest on the legal use of the previously illegal plant has since been propelling a multi-billion market worldwide which is expected to reach $146.4 billion by the end of 2025. Getting ahead of this massive market potential are countries like Canada, the United States, and many European countries.
With regard to CBD alone, the European CBD market is projected to swell to nearly $1.7 billion by 2023. The market for CBD in the U.S., meanwhile, is estimated to reach between $16 billion and $22 billion until 2025. Projections are more conservative for Canada at $1 billion in the next five years.
Interestingly, however, Canada has more simplified laws surrounding the use of marijuana. Essentially, both medical and recreational cannabis is legal nationwide in the country.
By contrast, laws differ per state in the U.S. even with the passing of the 2018 Farm Bill in December. In Europe, however, laws generally differ per component and according to use.
CBD in the United States
The CBD market is the most confusing in America. Imagine having 50 states in one country, and all have varying laws on how cannabis products are being regulated. On top of that, the federal government that oversees all these states has its own cannabis legislation.
It should be noted that cannabis per se is illegal nationwide. With the passing of the 2018 Farm Bill, however, industrial hemp and CBD derived from hemp is made legal across the country. Still, states are given their own discretion on how they can work around under the legislation. In Wisconsin, for example, the state can design its own hemp program or work with a federal agency to manage a project with the state.
Even with the 2018 Farm Bill only legalizing hemp, there are nine states where both recreational and medical marijuana are already legal. These states are California, Colorado, Maine, Massachusetts, Nevada, Oregon, Vermont, Washington and the District of Columbia in Washington DC. For context, only medical cannabis is legal in Oklahoma, New Mexico, New Jersey, New Hampshire, Georgia, Delaware, Florida, and Connecticut.
Despite this tricky landscape of the U.S. cannabis market, analysts at Brightfield Group said that the hemp-CBD market alone could reach $22 billion by 2022, while Cowen analysts said CBD revenue can reach $16 billion by 2025.
Brightfield Group, which is an intelligence firm for the legal CBD and cannabis industries, said the biggest drivers of the CBD market in the country are big-box retailers and national chains that are integrating the compound into the lifestyle of people — from coffee and cocktail drinks to food and daily skin care and bath essentials.
For example, Colorado-based West Coast Venture Group Corp. (WCVC), the parent company of fast-casual dining concept Illegal Burger, has recently announced plans of setting up a cannabis-themed restaurant. The initiative will be the product of the previously announced joint venture with the AmeriCanna Café. As of January, WCVC has been perfecting cannabis-infusion technology with a few of its collaborators.
CBD in Europe and the United Kingdom
In a separate report from Brightfield Group, the firm estimated that the European CBD market could potentially reach $1.7 billion by 2023 compared to the $318 million in 2018. This was because the European Union’s Food Safety Authority is looking into the possibility of allowing CBD to be integrated into food supplements as long as the daily intake is limited to 130 mg. Also, the World Health Organization has recently recommended rescheduling cannabis and removing CBD from international control.
Another report from Prohibition Partners pegged the entire European cannabis market at $138 billion by 2028 on the basis that six additional countries have recently announced new legislation. The latter was mainly because medical cannabis and CBD are largely considered one and the same across countries in Europe.
For one, medical cannabis is legal in Austria, Belgium, Denmark, Netherlands, Romania, Spain, and Italy. This also makes CBD legal across these markets. Furthermore, industrial hemp cultivation is also allowed in much of Europe as long as hemp variants with less than 0.2 percent of THC are being grown.
In the U.K., CBD and hemp cultivation are legal as well and there are no known restrictions surrounding cannabinoid as long as it is obtained from hemp and not from marijuana. The U.K. is, in fact, currently the largest European CBD market in the region alongside Austria. The markets in these two countries are projected to be worth about $440.8 million and $137.4 million, respectively, by 2023. Germany is expected to catch up with the U.K. and Austria by 2023, with its CBD market potentially reaching $605 million.
Interestingly, the Netherlands — where only medical marijuana is legal under extremely limiting legislation — has coffee shops and other establishments where recreational marijuana products are being sold. If such sales are to be considered, the legal marijuana market in the country will reach $1 billion by 2023. Another tricky market is Switzerland, where cannabis products with less than one percent of THC can be produced and sold.
Growing CBD market
A lot can happen in the evolving cannabis market, as proven within the significant shift of legislation in countries as big as the U.S. and as diverse as the European region.
While the specifications of such legislation remain to be complex and confusing at present, the massive market potential is undeniable. The next possible development could only be that of other smaller countries or regions joining the space.
Hopefully, these big markets could soon make their laws more specific, with less room for loopholes. This way, smaller markets can learn from them and replicate them along the way.