Paul Norman, former Kellogg (K) North America President, is betting that market for CBD or cannabidiol products derived from hemp is going to expand enormously in the consumer sector.
Norman says that the market for CBD products will grow four or five folds to a 20+ billion dollar industry in terms of consumer value over the span of next five years. He further added that CBD will be widely available in different kinds of consumer products.
Norman is presently the CEO of HeavenlyRx, a CBD based wellness company which is growing through investments and acquisitions. Norman said the firm will proffer services and products within the traditional categories inlcuding topicals, tinctures, vapes, but they will also play around other products that will incorporate CBD like food, beverages and skincare as well.
HeavenlyRx recently announced a stake of about 25% in Jones Soda (JSDA). The firm also invested nearly $30 million in Blühen Botanicals, a hemp cultivator. HeavenlyRx has also acquired Airgaics, a Florida based wellness company, last month.
Earlier in 2019, pharmacies like Walgrees (WBA) and CVS announced they will carry CBD infused products in certain states. CV Sciences (CVSI) recently declared a new deal to sell their CBD based products in 945 Kroger (KR) stores.
According to the federal regulations in the United States, hemp-derived cannabinoid is legal. Products can contain a maximum of 0.3% THC or tetrahydro cannabidiol, the compound that is responsible for making users feel ‘high’ while smoking pot or weed, above which it will be considered illegal.
Despite the federal regulations, the United States Food and Drug Administration (FDA) has not allowed hemp-derived cannabinoid to be infused in dietary supplements. The agency held a public meeting on 31 May, 2019 to discuss about CBD with stakeholders, lawyers, enforcement officials, consumers, retailers and business leaders.
Though the results from the meeting are not disclosed yet, the agency will roll out some useful information in the coming months, said an official. Currently, it allows only one CBD based drug Epidiolex, which is used for treating two rare forms of epilepsy in children.
Till the time the agency clears off the legality status of CBD in food and beverages, companies and consumers remain in a gray area. Companies must comply with the policies laid out by the FDA regarding the marketing and advertising for CBD products – FDA does not support marketing of CBD products with claims of medica benefits.
It recently issued warning letters to a few companies for advertising their CBD prouducts as a treatment for ailments with claims about medical benefits. One of the eminent brands was Curaleaf, a medical and wellness cannabis firm in the United States.
Norman says that education will play a key role in the CBD industry, however there has already been a significant inclination of consumers towards CBD products than traditional medical prescription drugs. Many people have reported benefits after using CBD oil.
CBD is known for its healing capabilities throughout the world. It is an ati-inflammatory and non-psychoactive drug which is used to treat various ailments such as stress, depression, anxiety, insomnia, pain, acute aches, inflammation, swelling, irritation and many others. Though there is little science to back up the claims of CBD and its potential, patients have reported improvement in their health after using the compound just for a few days.
About 80% of people who try CBD can easily witness the benefit in some form or the other, said Norman. He further stated that the consumer behaviour is automatically taking place, and their main aim is to create a brand or build a business that leverages on that behaviour and bring real solutions to people everyday.