Cannabidiol (CBD) is seeing exponential growth in the European market. Many experts believe this growth is just the beginning, and that CBD sales will continue to increase.
The product has gained plenty of attention from those with medical issues, recreational consumers, and other onlookers who have had little or no interaction with this commodity. While cannabis has a somewhat jaded reputation, consumers are beginning to understand the fundamental differences that separate cannabis from hemp-derived CBD products which may bring significant benefits.
Increasing Use of CBD in Europe
CBD-infused products are legal in the majority of EU member states for recreational use. While estimates vary, the CBD market in Europe is worth around €450 million, and experts expect it to grow by 400% over the next 3 years.
To put that number into context, it equates to just over 30% of the CBD global market. Only America has a larger market share at 40%, making Europe a formidable force in both the production and consumption of CBD.
Market analysts from the Brightfield Group predict impressive growth in the industry. Still, there are hurdles and manufacturers must work hard to produce large-scale supplies of CBD, which then requires distribution throughout the region.
Complicating matters further, the European Medicines Agency (EMA) has not yet approved cannabidiol for medicinal use, and they currently consider it to be a Novel Food. The European Food Safety Authority, which oversees food standards, takes the same stance, and CBD is not considered a food supplement.
The lack of strong direction one way or the other from regulatory authorities has left the position of CBD open to interpretation. European countries are reacting in different ways, with markets such as the United Kingdom allowing traders to sell CBD in pharmacies. In contrast, other countries such as Bulgaria are more cautious in their approach.
However, the current outlook remains positive, and the future for CBD in Europe is likely to be long-lasting and profitable. One of the critical aspects is that researchers are unable to show that cannabidiol causes adverse side effects, especially when compared to a considerable number of EMA-approved options.
Challenges for Producers
While researchers and regulators continue to study the potential effects of CBD, manufacturers continue to invest heavily in what they believe will eventually become a mainstream product.
However, production is a large-scale operation and requires significant investment in staff and facilities. Growing on a scale that can impact positively on the market takes hundreds, if not thousands of hectares of land on which to grow industrial hemp plants.
Producers then need to process the plants to refine their ingredients until they have the best product. This process requires facilities that have hygiene standards equal to factories that produce medicines, and highly-qualified and trained staff that are skilled in their craft.
After this, there needs to be a distribution network capable of transporting large quantities of finished products to EU countries. Overall, the investment required to create and maintain such an operation may cost millions of euros. Many investors see CBD as a growth industry, but they expect to see returns sooner rather than later, so there is little time for trial-and-error when setting up a business.
Lessons from Canada
Cannabis is a plant that produces two main cannabinoids – CBD and tetrahydrocannabinol (THC). THC creates a psychoactive effect, whereas CBD does not. Producers can only label a product as CBD if it has 0.2% or less of THC, and at that level, it is not possible to have a psychoactive experience.
For example, cannabis is illegal for recreational use in every country that is part of the European Union. However, you can still drive a vehicle after using CBD in countries such as the UK.
The EU can still learn lessons from other countries that have tried to introduce a new product into the market. In October 2018, Canada legalised the use of cannabis for recreational use.
They aimed to regulate the use of cannabis, take it away from the black market, and have legal, professional dispensers who contribute to the economy.
The result has been a mix of successes and failures. As many producers saw the opportunity for a quick profit, they rushed their product to market, providing an inferior crop to what black market traders were already supplying.
As there were overheads to cover, the cannabis was also more expensive than an illegal supplier. The distribution network was inadequate, with not enough stores selling the product to satisfy demand.
Consumers had a choice of travelling further and paying more money for a white label product that wasn’t as good as a cheaper product that a supplier delivered to their door. Many legal producers went bust, and many investors lost considerable amounts of money.
Now that Europe sees a massive surge in demand for CBD products, they must learn from these errors. They cannot compromise quality in exchange for quantity, and their processes must be efficient to allow for affordable pricing.
Distributors must be ready and waiting for the rush from consumers because if they don’t supply them, someone else will.
These aspects can only be implemented by professional, legal, and agile companies that meet consumer needs across all these metrics. A key element for companies to understand is why consumers are showing an increased interest in CBD.
What Is CBD?
Producers derive hemp extracts from the industrial hemp plant and then refine the extracts even further. They can produce different kinds of CBD, each with its own unique strengths and weaknesses.
Full-spectrum CBD contains an extensive profile of cannabinoids and terpenes, all of which many experts believe to be beneficial. Known as the entourage effect, researchers hypothesise that each compound works with the others for maximum results.
Although it is the purest form of CBD, as it does not contain any other ingredients, some experts believe it is not as effective as a full-spectrum version, as it can not benefit from the entourage effect.
Should I Use CBD?
There is already a substantial number of users that extoll the benefits of CBD for their quality of life. CBD oils, balms and creams, and CBD e-liquids are popular choices for consumers who want to maintain overall balance within the body and to promote relaxation and relief.
As research is ongoing, it is possible experts may prove a connection between CBD and wellness benefits soon. Until then, it is vital that you carry out your own research, consult with your doctor, make the decision you feel is right for your needs, and only deal with reputable suppliers.
Many analysts believe global CBD use will soar in the coming years, and predictions indicate the European market may even overtake demand in America. The reason for such a call from consumers is the potential benefits that CBD can bring to its users.
While we wait for research to provide expert information, expect anecdotal reports to increase as the availability of CBD offers the opportunity for many people to make their first purchase.
When choosing your CBD brand, ensure you are dealing with a supplier who is honest about what the products may or may not do. Check that they sell organic CBD that is sustainably grown and cruelty-free.