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CBD Industry – Growth Over Obstacles

CBD Industry – Growth Over Obstacles

For many Americans, cannabidiol (“CBD”) products are relatively new even though modern medicine has been studying the compound since the 1940s.  Often confused with cannabis products, CBD is a different but related compound derived from hemp.  Unlike cannabis, CBD is legal at the federal level.  It doesn’t have a psychoactive impact; today it is sold much like other herbal remedies.

Today in the United States, CBD products are estimated to be a $4 billion market and some forecasts project a quadrupling of sales over the next several years.  This kind of growth has attracted capital and entrepreneurs.

However, plenty of uncertainty surrounds the future landscape of the space. Regulatory issues, brand proliferation, high prices, limited distribution (especially in the mass channel) and pandemic strains are just a few of the obstacles companies must face to succeed in this sector. These challenges are reflected in the performance of larger public companies that have struggled over the past year.

The Spartan Group has been talking to a few young companies in the space and we have studied the industry and its promises and challenges.  We believe a shake out is coming.   If you would like to discuss our findings, please reach out to Peter Morgan, Managing Director, at (415) 388-5684 or peter@thespartangroup.com.

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