Cannabidiol (CBD) Consumer Health Market

Market Overview

The global cannabidiol (CBD) consumer health market size was valued at USD 15.78 billion in 2022. It is estimated to reach USD 112.58 billion by 2031, growing at a CAGR of 24.4% during the forecast period (2023–2031).

CBD, or cannabidiol, is the second most abundant psychoactive compound in cannabis (marijuana). Due to reduced limitations, CBD has started to impact various industries, from food and beverage to health and beauty. Cannabis extract cannabidiol (CBD) treats various medical conditions, including anxiety, tension, and pain relief. Despite scant, still-emerging research, CBD is expected to upend the consumer healthcare sector's over-the-counter drug and dietary supplement industries.

The largest consumer health firms are starting to take notice of the trend as CBD products overtake shelves. Many are hopping on board despite regulatory laws, dose, effectiveness, and side effect uncertainty. Although businesses will need to evaluate their level of risk concerning entering the sector at this time, CBD products can become key participants in the consumer healthcare area.

Market Dynamics

Global Cannabidiol (CBD) Consumer Health Market Drivers

Growing Adoption of CBD Topicals Across the World

The growing popularity of CBD-based products owing to increasing awareness about its benefits is expected to propel the adoption of these products during the forecast period. CBD is increasingly used in dermatology and analgesics sectors apart from pharmaceutical and food and beverage industries. The adoption of CBD-based topical products is expected to significantly increase owing to their effective pain and inflammation management, soothing effects on skin problems, and wound healing properties. Numerous companies are incorporating CBD oils into their products to treat various skin conditions and reduce inflammation.

Moreover, CBD-based skin care products boost skin hydration, increasing adoption among individuals with skin-related conditions, including dryness, psoriasis, and eczema. Easy access to various CBD-based topical products, such as ointments, lotions and creams, roll-ons, sprays, and transdermal CBD patches through online sales channels as well as the availability of application-specific product lines, are among the key factors expected to drive sales of these products during the forecast period.

Rising Disposable Income Influencing CBD Products Demand

Developing countries in the Asia-Pacific, Eastern Europe, Latin America, and the Middle East and Africa exhibit a high growth potential for CBD consumer health products. The steady economic growth in developing countries has increased the disposable income. The aforementioned factor, coupled with a heightened focus on enhancing general vitality and well-being, has significantly increased consumer spending on health products. This factor has positively impacted the global demand for CBD consumer products.

Additionally, real disposable personal income increased on average by 11.5% in China, 7.5% in India, 6.6% in Vietnam, and 5.7% in Malaysia from 2001 to 2016. This surge in disposable income raised affordability for those willing to purchase innovative products and is estimated to positively impact the global demand for CBD consumer products.

Global Cannabidiol (CBD) Consumer Health Market Restraint

Availability of Alternatives to CBD Supplements

In various countries, cannabis and its derived products are illegal due to THC—a psychoactive compound. Therefore, people depend more on substitute herbal health supplements for various health benefits. The presence of alternatives, such as nutraceuticals prepared from herbs like Garcinia cambogia, raspberry ketone, echinacea, and turmeric, is impeding the growth of the CBD nutraceuticals market.

The availability of extensive clinical studies demonstrating herbal products' efficacy and therapeutic benefits over CBD nutraceuticals further restricts demand for CBD nutraceuticals. Customers favor plant-based products because they believe they are secure, all-natural, and capable of promoting wellness. These herbal supplements have dominated the global nutraceutical space for a long time and are available through all major sales channels worldwide. Therefore, the availability of alternative health supplements may hinder the demand for CBD nutraceuticals.

Global Cannabidiol (CBD) Consumer Health Market Opportunities

Growing Legalization of Cannabis-Based CBD Products

CBD-infused products such as cannabis oil, beverages, gummies, beauty and skincare products, and capsules are highly favored. They are anticipated to drive the demand for these products in the market. It can be consumed through various modes of ingestion, such as vaping, smoking, and through the skin. CBD is extensively used in the manufacturing of topicals and medical drugs in states of the U.S. where cannabis is legal. Legalizing cannabis-based products has provided a great opportunity for the end-user industries to expand.

As per Federal law in the U.S., the production and distribution of hemp-based CBD have been legalized owing to its medicinal benefits. The U.S. has deregulated the use of medical CBD in most states, such as Alabama, Georgia, and Indiana, among others. However, a few prominent states in the country, such as New Jersey, Oklahoma, Delaware, New Hampshire, Connecticut, Florida, and New Mexico, have legalized cannabis only for medical use and not for recreational use. Such favorable regulations in the country are anticipated to create opportunities for the cannabidiol (CBD) consumer health market over the forecast period.

Regional Analysis

Based on region, the global cannabidiol (CBD) consumer health market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

North America Dominates the Global Market

North America is the most significant global cannabidiol (CBD) consumer health market shareholder and is estimated to exhibit a CAGR of 18.31% during the forecast period. North America has the highest number of CBD companies globally, most concentrated in the U.S. and Canada. According to Vote Hemp and Hemp Business Journal, in 2016, the hemp CBD market in the U.S. reached an estimated retail value of USD 130 million. The increasing number of companies in hemp and CBD businesses can be attributed to the ease with which wholesale procurement of hemp or cannabis can be carried out and CBD product development can be achieved. Furthermore, there has been a notable increase in the demand and market growth for CBD products due to the legalization of cannabis and CBD-related products within the area. As an illustration, Elixinol, a company headquartered in the United States, experienced a growth in revenue from USD 2 million in 2015 to nearly USD 4 million in 2016. This observation suggests the presence of profitability within the market.

Moreover, the complexity of supply chain management for numerous companies is reduced due to establishing partnerships with local growers. The individuals in question are responsible for ensuring that the provision of cannabis meets the standards set forth by federal and state legislation. Hence, the market will experience substantial growth during the projected timeframe due to the reduced disparity between demand and supply, coupled with the growing presence of companies attributed to the legalization process.

Europe is predicted to exhibit a CAGR of 24.7% over the forecast period. There is surging demand in the European market for hemp and CBD-infused products. For instance, as per an article published by European CEO, the CBD industry is witnessing exponential growth due to increased demand for CBD-infused products in Europe. The market shows optimistic growth in demand and availability of a greater variety of CBD products. According to Statista, in 2018, 35.2% of the hemp-derived CBD market was in Europe, and it was the second-largest share at the global level. Based on research by Global Wellness Institute, the CBD market is expected to reach around 16.2 billion euros by 2023. Therefore, the market is expected to grow during the forecast period due to increasingly favorable policies, rising awareness about CBD benefits, and increasing consumption of CBD-infused products.

In Asia-Pacific, CBD regulations vary significantly between countries. These laws strongly depend on people's traditional, cultural, and religious beliefs. For instance, cannabis plays a major role in Afghanistan's predominant culture. Despite using cannabis in the form of hashish, its cultivation and use as cannabis or derivatives such as CBD is strictly prohibited. In many other countries of the region, CBD remains illegal, primarily because the countries do not differentiate between hemp and marijuana. However, this creates a problem for people intending to use CBD as a medicine. The emphasis on CBD's potential health advantages could contribute to the legalization of this substance within the region. In addition, countries where CBD is available for sale are China, Japan, Australia, New Zealand, South Korea, and India. They are considered emerging markets for cannabis and derivatives. There is potential for growth in Asia-Pacific due to favorable climatic conditions and increasing awareness about CBD benefits.

Latin America holds strict regulations regarding cannabis and its derivatives, primarily due to the drug trafficking history of the region. However, there are initiatives undertaken by many countries for the legalization of CBD products due to the non-psychoactive nature of the compound. Furthermore, many companies are keen on entering the region's CBD markets due to legalization in some countries.

Since regulations and government approaches toward CBD are more open in these countries, many players are trying to enter the CBD business, implementing various expansion strategies. For instance, Khiron Life Sciences, headquartered in Canada, is one of the early entrants in Latin America's CBD market. The company has formed a joint venture with Dixie Brands, a producer of CBD-infused products. This would help it create a foothold in the Latin American market. Therefore, as many players are extending their supply and manufacturing of CBD products in the region, the market will likely grow significantly in the coming years.

Segmental Analysis

The global cannabidiol (CBD) consumer health market is bifurcated into product type and distribution channels.

Based on product type, the global CBD consumer health market is bifurcated into medial OTC products and nutraceuticals. 

The nutraceuticals segment owns the highest market share and is predicted to exhibit a CAGR of 26.7% over the forecast period. Nutraceuticals are further segmented into CBD vitamins and dietary supplements, CBD sports nutrition, and CBD weight management and well-being products. Nutraceuticals comprise products made from natural food sources, primarily targeted toward delivering a significant health benefit. Due to changing lifestyles and inadequacy in gaining daily nutrition needs, nutraceuticals in the form of capsules, soft gels, and supplements are gaining popularity.

The nutraceuticals market is growing significantly due to increased awareness about daily nutrition, weight management, and health regimes with nutraceutical supplements and an increasing athlete preference over chemical-based products. As per Statista, the worldwide nutraceutical industry was valued at USD 160.1 billion in 2013 and rose to about USD 241.1 billion in 2019. This is a substantial increase and exhibits significant growth opportunities for companies soon.

The medial OTC products segment is further sub-segmented into analgesics, dermatology, mental health, sleeping aids, and other OTC products. Consumer medical products are increasing, primarily due to the availability of OTC drugs, self-medication practices across different geographies, and consumption and utilization of products for pain management and dermatology. Similarly, there is a paradigm shift from OTC medical products to consumer goods. Many companies aim to increase product visibility to sustain their position amid the changing nature of these products.

Furthermore, the enactment of the Farm Bill in 2018 and the subsequent legalization of CBD in various regions have facilitated the introduction of CBD-based products for daily use and consumer consumption. Since then, there has been a significant increase in consumers opting for CBD products and the number of companies providing them. For instance, CBD Sky in the U.S. manufactures Sleep Support Oral Spray, which helps provide a sound and relaxing sleep. Many such consumer CBD products help treat certain medical conditions, fueling the market growth.

Based on the distribution channel, the global CBD consumer health market is segmented into online stores, retail pharmacies, and retail stores. 

The retail pharmacies segment dominates the global market and is estimated to exhibit a CAGR of 24.3% during the forecast period. Although e-commerce platform has gained popularity for purchasing CBD products, certain customers still tend to buy these products through retail stores or shops. Retail stores include both direct sales and company-owned stores. Moreover, as many consumers buy these products through offline stores, many companies have increased the number of offline stores to cater to the increasing demand and enhance their product visibility across geographies. For instance, in March 2018, CVS Health announced it would stock its CBD topicals across 800 retail stores in eight U.S. states.

In addition, many other companies are adopting this strategy and aiming to stock their products in retail stores. These initiatives signify the interest of CBD companies to increase their sales and visibility, thereby fueling the overall market growth.

E-commerce, or online purchasing, has increased over the years, and this trend is likely to keep growing in the coming years, owing to a rise in the number of internet users, penetration of technology (even in rural areas), and increase in affordability of internet services and gadgets such as smartphones. For instance, as per Statista, in 2019, around 14.1% of global sales were registered to online portals. This percentage is higher than the retail sales recorded in 2015, which was 7.4%. Therefore, the e-commerce industry is expected to grow significantly during the forecast period. The increasing popularity of e-commerce platforms worldwide has also allowed companies to increase their revenues and profit margins.

Recent Developments

• April 2023- This quarter, BRITISH CANNABIS introduced its Non-Novel CBD Supplements range. The full spectrum, whole plant cannabis oils, capsules, and edibles currently available mirror the complex phytochemical profile of the cannabis plant, providing a broader spectrum of cannabis-related advantages than CBD alone.

• March 2023- Irwin Naturals Inc. announced the release of Irwin Naturals Cannabis' new CBD 25mg Softgels in Canada, now available nationwide via the Starseed Medicinal Medical Group platform.