Hemp-Derived CBD Oil Market Size, Share & Trends Analysis Report By Source (Inorganic, Organic), By Applications (Pharmaceutical & Personal Care, Food & Beverages, Others), By Distribution Channel (Retail pharmacies, Online pharmacies, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Market Overview

CBD (cannabinoid) is extracted from cannabis hemp plant leaves, flowers, and stems using two extraction methods, i.e., by removing the CBD and turning into an isolate and using full-spectrum CBD. Today, Hemp-derived CBD Oil is used in a range of applications, especially in the medical sector for pain relief and treating arthritis, joint pain, neuropathic conditions, skin conditions, and other medical conditions. Apart from this, it used in personal care, supplements, textile, and other industries.

The global hemp-derived CBD oil market size was valued at USD 1306.07 million in 2021. It is expected to reach USD 6536.64 million, growing at a CAGR of 22.30% during the forecast period (2022–2030). 

CBD Oil for Skincare Products

CBD oil is extensively used for the manufacturing of skincare products to treat acne and wrinkles. Today, a wide range of CBD based beauty products are available in the market. This can be attributed to the legalization of the use of CBD by several governments and growing awareness about the healing properties of CBD. For instance, Sephora had launched a unique range of CBD skincare products in its stores. Similarly, Ulta Beauty is planning to offer an exclusive range of CBD based products. In addition to this, several new companies are entering the CBD infused beauty products market. For instance, in 2019, Aphria, a Canada-based cannabis company, introduced its first-ever CBD-based cosmetics line in Germany.

Currently, several leading manufacturers are investing heavily in R&D activities to develop high quality and effective CBD oil.

• CBD oil has been found to be an effective treatment for seizures related to Dravet syndrome. Few epidemiological studies have suggested that the off label consumption of CBD hemp has reduced the incidences of seizures in Dravet syndrome patients.
• CBD oil has also been found to be effective in the treatment of anxiety and insomnia in children with post-traumatic stress disorder

Raw Material Analysis

The supply chain process starts with the collection of raw materials. Hemp flowers, stalks, and stems are the primary raw materials used in the manufacturing of the hemp-derived CBD Oil. In addition to this, several different solvents and gases are used during the extraction process. Europe is one of the largest producers of the hemp, whereas the U.S. is the major importer of the raw materials (hemp). On a large scale, Hemp is grown in Europe, China, and Canada. In the U.S., it was cultivated across 78,000 acres in 2018 up from 25,713 acres in 2017.

Top Five States Cultivating Hemp

• Montana: Over 22,000 acres
• Colorado: Over 21,578 acres
• Oregon: Over 7,808 acres
• Kentucky: Over 6,700 acres
• Tennessee: Over 3,338 acre

Market Dynamics

Trends in the Hemp Industry

Hemp cultivation acreage has tremendously increased across the globe with the legalization of Cannabis and booming demand for Cannabis, industrial hemp, and recreational marijuana. Demand has risen dramatically in the last year, especially in Canada, Thailand, and the U.S. Factors behind the rise in demand are increasing awareness, growth in the use of cannabis and hemp products, including oils to treat medical conditions, and escalating adoption of marijuana for recreational purposes.

For a decade now, governments and manufacturers are tracking the growing demand for Cannabis across the globe. At the end of 2017, global hemp trade was to the tune of USD 3,100.0 million. In light of the rising demand, the production of hemp, Cannabis, and marijuana has also increased at a high pace, thereby cropping up questions concerning building a big supply chain to match the rapid market expansion. With questions, there are several challenges to build a supply chain for cannabis and cannabis products.

Regional Analysis

Key Players Expanding their Production Capacity in North America 

North America is dominating the hemp-derived CBD Oil market. To cater to the growing demand, several players are expanding their hemp oil production capacities. In 2018, Canopy Growth, one of the leading cannabis producers, has tripled its licensed growing capacity to over 2.4m square feet and is planning to increase it to 5 million square feet by the end of 2019. On the other hand, growing applications of hemp oil in skincare and cosmetics industry is adding fuel to the market growth. For instance, Marijuana Company of America, Inc. launched hempSMART, a new cosmetic product, which is formulated with 300mg of organically grown, non-psychoactive cannabinoid, derived from industrial hemp. This body cream is a combination of CBD oil with a unique mix of Ayurvedic herbs and botanicals. 

Growing consumer awareness and acceptance of CBD are benefitting from a general normalization of cannabis through the rise of legal state markets. In addition to this, increasing investments by several players in the regional CBD industry for delivering new innovative products supported by the federal legalization is increasing the demand for hemp-derived CBD Oil across the region. For instance, in Canada, around 77,800 acres of hemp were cultivated for industrial applications in 2018, Health Canada. Also, after the legalization of cannabis, the hemp-derived CBD Oil market is experiencing a substantial surge, and the country has become one of the major exporters of hemp across the globe. For instance, in 2018, it exported around 5,400 metric tons of hempseed worth around USD 50 million, the USDA Foreign Agriculture Service.

China to Lead the CBD Hemp Oil Market

China is the largest producer of hemp, with more than 200,000 acres of Chinese hemp acreage in 2017. According to estimates and analysis, the Chinese hemp market was worth USD 1,100.0 million in 2017 with rapid and healthy movements in hemp cultivation and application opportunities for future market growth. The major share of Chinese hemp produced in China goes to the woven fabrics and consumer cloths. A significant share of the total Chinese hemp market, on the other hand, is grabbed by industrial applications of hemp across personal care, cosmetics, and nutritional products industries. Chinese hemp-derived CBD and products market accounts for the least share of the total Chinese hemp market.

According to Chinese law, exclusively Chinese companies are allowed to grow, cultivate, and sell hemp in China. With growing companies investing in Chinese hemp, the Chinese government is supporting more planting of hemp, which has ultimately increased acreage, making China a leader in Hemp cultivation, benefitting other Asian countries, including Japan and South Korea. According to Mazakali, an investment firm in San Francisco, the world’s largest CBD extraction facility was opened in 2016 in China, which was the first step towards establishing a comprehensive Cannabis and hemp supply chain.

Consumers across the globe are appreciating and embracing the versatility of Chinese grown hemp, which is expected to soar the demand for Chinese grown hemp for textiles. Demand is anticipated to rise from promising Southeast Asian markets, including Korea, Japan, and India. China is expected to focus its supply chain towards Southeast Asian countries, as these countries are primarily engaged in beauty and cosmetics products, nutritional products, and other personal care products infused with Hemp-derived CBD Oil.

Europe: Fastest Emerging Hemp Agriculture Market

Europe is the fastest-growing hemp-derived CBD oil economy. In Europe, hemp is coping up to becoming one of the fastest emerging agricultural markets. In 2016, around 33,000 hectares of industrial hemp was cultivated in Europe, which increased by 30% than the previous year, the British Hemp Association. The growth can be attributed to the increasing demand for hemp in the pharmaceutical, food and beverage, and cosmetic industries. Moreover, the consumption of hemp-derived CBD Oil is legally permitted for recreational purposes in most of the countries in the region. For instance, Switzerland permits the sale and consumption of CBD with THC content as high as 1.0%. Currently, growing R&D activities for harnessing the medical potential of CBD oil is bolstering the market growth. For instance, in 2016, the researchers at the University of Nottingham observed that CBD, when combined with another cannabis compound such as Tetrahydrocannabivarin (THCV), helped in lowering the blood sugar level and increasing insulin production in people with Type 2 diabetes.

Segmental Analysis

CBD is extensively used in the textile, pharmaceutical, and food & beverage industries, among others. Currently, Hemp-derived CBD Oil is gaining considerable popularity in the U.S. in light of the growing industrial hemp-cultivating activities across the country, which is supported by the legalization of cannabis. Moreover, in developing economies, increasing industrial hemp cultivation coupled with the growing acceptance of cannabis is offering lucrative opportunities for market growth. For instance, in Asia-Pacific, China has become one of the most powerful cannabis-producing countries and is known for its hybrid species.

Benefits of Organic CBD Oil

With the increasing awareness about cannabis and its benefits, consumers around the world are shifting their focus toward organic cannabis-based oils. In line with the growing demand, pharmaceutical companies are increasing the use of organic CBD oil in the manufacturing process.   For instance, Colorado Cultivars uses organic and regenerative farming practices to provide the highest quality industrial and medicinal hemp ingredients to its customers. Similarly, Avida offers a full-spectrum organic oil tincture.

Medical Properties of CBD

The pharmaceutical and personal care segment accounted for the largest share of the market and was valued at USD 613.67 million in 2019. Cannabis is an effective treatment alternative for the management of peripheral neuropathy, multiple sclerosis, depression, sleeping disorders, and other indications. Peripheral neuropathy is caused due to damaged nerve fibers, where it ends up sending incorrect signals to the central nervous system. In the U.S. alone, around 20 million people suffer from neuropathic pain. Peripheral neuropathy causes emotional, cognitive, and functional problems, resulting in high rates of medical and psychiatric comorbidities and occupational impairment, multiple sclerosis (MS) is a chronic disease that damages the myelin sheaths protecting the nerve cells of the brain and spinal cord.

Globally, around 2.5 million people are affected by multiple sclerosis every year, the Multiple Sclerosis Trust. Currently, there is no cure developed for the treatment of multiple sclerosis. However, CBD oil is found to be effective when it comes to the pain management of multiple sclerosis. Apart from this, CBD oil is gaining massive popularity in the cosmetic industry for its antioxidants and anti-inflammatory properties and is extensively used in the manufacturing of a wide range of beauty and skincare products. CBD is known to improve a variety of skin issues such as acne, wrinkles, and brown spots, among others. Major retailers like Sephora have already started introducing special categories of CBD products.

Impact of covid-19

The pandemic wreaked havoc on the smart home products market. The temporary shutdown and the restrictions on international and domestic travel created a large-scale impact. It leads to impaired production capability and restricts new deployments. The effect on the construction sectors has also contributed to the market hindrance.