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Even though CBD has been valued medicinally for thousands of years, it’s only been relatively recently that it’s gained mainstream recognition in the UK. This is arguably thanks to the internet, which has provided a platform for information and support.
It has also provided a channel for pressure to be applied to politicians to accept the validity of CBD as a medical treatment. As a result, the demand for CBD products just keeps rising.
The global perspective
It is extremely difficult to get detailed statistics on CBD usage across the entire world, particularly given the massive difference in its legal treatment not just across different countries, but, in some cases at least, in different parts of the same country (e.g. the U.S.).
There are, however, aggregate global statistics which show that in 2018, the global cannabidiol market was valued at US$4.6 billion. It is projected to have a compound annual growth rate (CAGR) or 22.2% up to 2025.
CBD use by region
It will probably come as no surprise to learn that the North America region has the largest market share by far, as in almost three-quarters of all global demand comes from this region.
There are several reasons for this, one of the most obvious being that the U.S.has a population of almost 330 million people and Canada adds about another 40 million.
Both countries have a fairly liberal attitude towards CBD use (in practical terms at least) and both are places in which it is relatively easy either to get CBD products on prescription or to be able to buy it privately at an affordable price.
The U.S. is also a place where getting formal healthcare is notoriously expensive, which makes it unsurprising that people would look for reasonable alternatives wherever possible.
What may come as a surprise is that Asia Pacific and Latin America are in second and third place respectively. Taken together, they account for just under a quarter of all global demand, with demand in Asia Pacific being about twice as high as in Latin America. At least, they do according to official statistics.
Unofficially, the simple fact of the matter is that both of these regions have long traditions of growing and using cannabis, which means that there is probably a high degree of medicinal CBD usage, it is just not officially recorded.
In practical terms, it is probably safe to say that any growth in the market for CBD-specific products, such as CBD oil, would have to come from the urban “convenience” market.
It is entirely possible that busy city-dwellers, who probably live in very small homes, would be perfectly happy to pay for a “ready-made” product, especially if they could pick it up from a local shop or have it delivered to their home.
The Middle East and Africa region only accounts for the tiniest sliver of the global CBD market. Again, however, this is according to official statistics. Unofficially, the Middle East and Africa region has a long tradition of growing and using cannabis so it is likely that actual usage is significantly higher than these statistics would suggest.
It is likely that the situation regarding growth prospects is also similar to AP/LA. In other words, it is probably going to be in the urban “convenience” market.
Europe makes up the rest of the market, however it should be noted that although Europe is, relatively-speaking, a small continent, it is made up of many different countries which have significantly different cultures, climates and CBD-related laws.
At this point, the main European markets for CBD products appear to be Germany, the Netherlands and the UK. The fact that the Netherlands is a significant market for CBD-specific products may come as a bit of a surprise given that it has long been tolerant of cannabis production. Again, this may be the “convenience factor” at work.
The Netherlands is very densely populated, which means that there are a lot of people living in small city dwellings and leading very time-pressed lives.
There may therefore well be quite a significant number of people who just want CBD-specific products and who are perfectly happy to buy them ready-made rather than devote the space and time necessary to grow their own cannabis and prepare their medication themselves.
A look at the UK specifically
Brexit is now underway, but it is still very much anyone’s guess what form it will eventually take or what it will mean for the UK’s market for CBD products.
On the one hand, Brexit could be a massive opportunity for producers of CBD products since it would potentially free the UK from the need to comply with EU regulations. In particular, it might relieve producers from having to navigate the complexities of labelling requirements.
On the other hand, there is no point in having increased freedom to sell CBD products if you can’t actually get them into the country. In the UK it is illegal to grow most forms of cannabis. Even the form of cannabis commonly known as hemp can only be grown under a licence which is extremely difficult to obtain. This means that the UK is heavily reliant on imports of CBD products, which raises some interesting questions about what happens after Brexit.
In theory, the UK could restrict the import of CBD products and/or place tariffs on them, but this would be surprising, at least in the short term.
The UK does not have a hemp industry and it’s very much an open question as to whether or not it could develop one. Cannabis plants tend to prefer warm, dry, sunny climates and this definitely does not describe the UK. Even in summer, the country gets a lot of rain.
In theory, the UK could get around this issue by growing hemp indoors, but this approach would raise all kinds of practical challenges. Hemp is a big plant which requires a lot of space to grow and the UK is a small, densely-populated country with a massive need for housing.
It therefore seems probable that the UK will continue to operate an open market for CBD products, although it’s entirely possible that Brexit-related issues might lead to delays along the supply chain, at least in the short term.
Want to find out more?
Don’t forget to check out our seeds blog for more insights into the cannabis industry or feel free to browse our CBD Cannabis Seeds. Got a question for us? We’re more than happy to answer any questions you might have on products, so feel free to get in touch.