The global CBD Oil market size was valued at USD 426.5 million in 2018 and is anticipated to grow at a CAGR of 30.9% during the forecast period. Wide applicability in industries ranging from food to cosmetics, media attention towards any new development and rising interest among millennials are some of the factors that have benefitted the market growth in the past and this trend is expected to continue over the forecast period. Easy availability and broad product portfolio are some of the other factors that have benefitted the market demand.
Preliminary clinical studies and research has pointed out the various health effects of CBD oil. These include anti-inflammatory properties, ability to cure anxiety and stress, ability to improve quality of sleep, as well as to boost cognitive abilities among others. CBD oil is also instrumental in enhancing the overall skin tone and health, and in countering acne and ageing effects. All these benefits have resulted in the development of wide products for a variety of applications, thus prompting the CBD oil market growth.
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Inclination towards preventive healthcare and better awareness regarding the same is also benefitting market growth. It has been observed that urban youth is looking and is also willing to try new ways to tackle health related issues as well as to boost cognitive abilities. They are looking for products which are effective, are easily available and can suit their customized requirements. Due to the flexibility of CBD oil they are used from the food industry to the cosmetics industry and hence perfectly serve the needs of today’s urban youth. This trend has benefitted the market demand especially in developed regions such as North America.
Strong growth of the global industry has spiked interest of many companies from a wide spectrum such as beverages, cosmetics and pharmaceuticals and has prompted them to invest in CBD oil related avenues. For example, Constellation group of which Corona Beers is a brand, has made an investment aimed at developing a CBD beverage. Another prominent beverage company, Cocoa Cola is in talks with Aurora Cannabis company, to create a CBD beverage. Also, major retailers, both online and offline in the US, have started dedicated shelf places for the product.
The market is primarily segmented on the basis of Product, By Application, By Distribution Channel, By Form, By Source and geographic region.
By Region Type
· Hempseed Based CBD Oil
· Marijuana Based CBD Oil
· Hospital Pharmacy
· Retail Pharmacy
· North America (U.S., Canada)
· Europe (France, Germany, UK, Italy, Russia)
· Asia Pacific (Japan, Korea)
· Latin America (Mexico, Brazil, Colombia)
· MEA (Saudi Arabia, Israel)
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Hempseed based CBD oil segment is expected to benefit the fastest growth over the forecast period. Hempseed based oil is widely used in cosmetics as well as pharmaceutical industry owing to its properties such as anti-inflammatory, ability to moisturize the skin, and to unclog pores. Hempseeds are cold pressed to obtain oil that finds applications in cooking, skin products, paints, among others.
Marijuana based CBD oil is particularly used in the pharmaceutical industry as a treatment for mental illness, chronic pain, and other neurological cases. Marijuana based products are also used for niche applications such as usage for Phyto remediation. In countries such as the US, these products have to face strict regulations as compared to hempseed counterparts. The absence of a proper auditing forum, committee or a regulatory agency across the globe has resulted in companies not being allowed to use the word organic for their marijuana-based products, and this factor is considerably restraining the segment growth.
Pharmaceuticals dominated the application segment in 2018 and is expected to do so over the forecast period. CBD oil infused pharmaceutical products enjoy the distinct advantage of a highly developed delivery system module in which the medicine can be directly transfused in the body through the mucous membranes of the tongue, thus providing fast action time. This makes the product useful in a variety of treatments such as inflation, fluctuating sugar products, cardiovascular diseases, inflammation among others. Such factors have considerably benefitted the segment growth in the past.
CBD oil is increasingly gaining acceptance as a wellness and beauty ingredient in cosmetic products. Loosening of laws surrounding cannabis, inherent properties of CBD oil and social media information burst has resulted in a rise in usage of CBD oil based cosmetic products such as lip gloss, skin creams, among others. Due to all these factors, it is anticipated that the segment will witness the highest growth rate over the forecast period.
Online distribution channel for CBD oil is expected to witness the highest growth rate over the forecast period. Online retailers have a dedicated shelf space for these types of products and are using aggressive marketing campaigns to promote them. Broad product portfolio, ease of availability, greater control over the purchase are some of the reasons benefitting the segment growth. Furthermore, the companies advertising their products online are also indulging in SEO campaigns for increasing the awareness of the product.
Retail pharmacy had the highest penetration in 2018, however it may lose its share to online channels by the end of forecast period. Some of the products that are sold in the retail pharmacies include pain creams, bath bombs, patches, sprays, lubes, vape pens, capsules, among others. It must be noted that the retail pharmacy sales percentage is considerably higher in developing regions of the globe.
North America emerged as the largest market for CBD oil in 2018 and the region is expected to continue its dominance over the forecast period. US is a key contributor to the overall regional demand. Strong presence of companies, loosening restrictions, high awareness and easy availability are some of the factors benefitting the US demand. Companies operating in the country have put up concentrated efforts pertaining to the branding of their products and are pushing their products through a variety of distribution channels.
Europe emerged as the second largest market in 2018. The European Food Safety Authority is one of the regulators for the product in the country and has not granted a successful application pertaining to food. In countries such as Germany, and France, the products are sold under the category cosmetics or fragrances. EFSA has expressed their intent of tightening CBD oil regulations and this factor is expected to considerably restrain the overall market growth of the region.
Established brands such as Coca Cola are planning to enter the CBD oil market and alleviate customer attention through their reputation. One of the key trends of the market is frequent mergers and acquisition. Small players who have established a considerable market share for themselves, are being acquired by bigger players. This trend is particularly visible in the US market.
Continuous new product development is a critical success factor in the market. Companies are trying to introduce new products such as CBD infused honey among others in the market. Companies such as Diamond CBD are leveraging their resources and are operating web market of their own along with maintaining brick and mortar stores at the same time. key leading players in the market include ENDOCA, Isodiol, Medical Marijuana, Cannoid., Canopy Growth Corporation, Elixinol Group, Folium Biosciences, Diamond CBD, NuLeaf Naturals, PharmaHemp, Aphria Inc. and Gaia Botanicals, among others.