Page 67 - Entrepreneur-November 2018

Opportunity Report

Is CBD Bigger

Than Marıȷuana?

A new report predicts it will be. Here’s what entrepreneurs
need to know. by JAVIER HASSE

eadlines are all about marijuana. Politicians
argue about marijuana. Consumers flock to
legalized states like Colorado and California
for marijuana. But for the savvy entrepreneur
who’s watching the numbers and looking
for where to jump in, marijuana may not
actually be where the greatest opportunity
H lies. It’s in hemp-derived CBD, which is
already legal across the nation and is celebrated by users
for reducing pain and inflammation. The CBD market
is $591 million today but is projected to reach sales of
$22 billion by 2022, surpassing cannabis sales by $1 bil-
lion, according to a new report released by the cannabis
and CBD research company Brightfield Group.
The surge in profits is largely due to two things:
politics and distribution. There’s more political will to
legalize hemp farming across the country than there is
to legalize cannabis. (Right now, both are a state-by- GET STARTED IN CBD
state issue. But hemp farming has notably more support
from Republican leaders.) And because CBD products It’s a complex industry. Here are three
are already legal across the country, consumers are things to do first, according to cannabis business
encountering them everywhere from spas to gyms to consultant Dasheeda Dawson.
small grocery stores, and in an increasingly broad array
1/ Don’t make claims.
of offerings. “When we researched the market a year
You can’t say your product will help consumers “prevent, treat, diagnose, or
ago, it was predominantly tinctures being sold either cure” a disease. Such statements will put your business at risk of running
afoul of the FDA, since most CBD health claims lack federally approved
online or through smoke shops,” says Bethany Gomez, research to support their validity. Consult a lawyer familiar with the industry
Brightfield Group’s director of research. “Now we’re see- on what you can say.
ing such a wide range of new products—from CBD face 2/ Research suppliers.
masks and soaps to prerolled CBD joints, bug repellent, Many reputable wholesalers source their CBD from Europe, where farmers
have had many years of experience growing hemp. (More recently, we’ve
pet treats, fruit roll-ups, and lemon water.” seen an increase in U.S.-based-hemp-derived CBD, too.) If a supplier
grows its own hemp, research its farming practices to confirm that it utilizes PHOTOGR APH BY ISTOCKPHOTO.COM/ WABENO
Within a few years, she predicts, CBD products will
standard practices and its raw materials meet or exceed industry standards.
start making their way into large national chains. “This
3/ Get a certificate of analysis (COA).
will open up the market and change the industry almost This is a report that confirms the levels of CBD, THC, and other molecular
overnight,” says Gomez. And that’s when an entrepre- compounds in cannabis products. It can mean the difference between your
product being legal or illegal, so if there’s any doubt, obtain a third-party test
neur’s groundwork today could really pay off. to confirm the purity and potency of the product.

70 / ENTREPRENEUR.COM / November 2018