The status of cannabis component CBD as a trendy new superfood ingredient may be cemented this week by U.S. President Donald Trump.
The $867 billion farm bill, headed to the president for his signature, would remove industrial hemp from a list of federally controlled substances, a major step as weed culture pushes into the U.S. mainstream. That would create a legal market for CBD that could be worth more than $20 billion by 2022, according to research firm Brightfield Group.
Senate Majority Leader Mitch McConnell, a Kentucky Republican, championed the hemp provision, aiming to boost farmers in his home state who are looking for another cash crop as tobacco consumption wanes. Congress passed the farm bill last week, and the president’s signature would legalize hemp-derived CBD, a chemical compound that doesn’t get you high but whose proponents say can be used for relaxation and to treat insomnia and inflammation.
CBD, short for cannabidiol, is the lesser known cousin of THC, the psychoactive component in marijuana. Found in pot and hemp, CBD is also the key ingredient in Epidiolex, a seizure medication that is the first cannabis-derived drug approved by the FDA.
The easing of marijuana restrictions in several states and Canada has put CBD on the map in recent months, with the suddenly buzzy ingredient, virtually unheard of until fairly recently, showing up in drinks, beauty products and tinctures. Around New York, cocktails and baked goods with CBD have been appearing on menus to draw in customers curious about cannabis.
The formal signing of the current legislation would change that, potentially giving companies like Coca-Cola Co. a legal way to experiment with cannabis in the U.S. Next year alone, sales of hemp-derived CBD in the U.S. are expected to rise almost 10-fold to $5.7 billion, according to Brightfield.
Still, it’s not clear how CBD’s use as an ingredient will be regulated by federal and state authorities and it could be months before details are ironed out. And while drinks and face cream with hemp-derived CBD will start hitting shelves in short order, larger public companies will most likely wait until the regulatory dust settles, Nichols said.
But that won’t mean a dearth of CBD products. There are scores of companies ready to flood the market with what’s viewed as the latest superfood, akin to kale or acai berries. Azuca, a New York-based company that makes CBD chocolate, simple syrup and sugar plans to sell its products wholesale to bars and restaurants around New York. They’re also pitching natural food stores.
The company was co-founded by Ron Silver, the owner of Bubby’s restaurants in Manhattan, where CBD drinks have been on the menu for the past few months. Kim Rael, co-founder and CEO of the company, expects the CBD market to get “very noisy” in coming months. And while it could be more than a year before there’s regulatory clarity, it’s only a matter of time before cannabis products are on the shelves of national retailers like Target Corp. and Walmart Inc., she said.
“It’s just a question of when,” Rael said.