ANAHEIM, Calif. – Soy milk, almond butter, kale chips, chai … CBD.
Natural products businesses are no strangers to ferrying once-unknown ingredients and supplements into the mainstream, and if the prognosticators at the industry’s largest trade show are correct, cannabidiol could be “the next big thing.”
The cannabis compound took center stage at Natural Products Expo West on Wednesday when the massive trade show hosted its first-ever CBD Summit. The goal, organizers said, was to provide a glimpse of the market potential for products made with the hemp-based extract.
“(CBD) is like anything that’s innovative and on-trend and disruptive — it tends to start in health foods stores, whether it’s pomegranate or plant protein or almond milk or CBD,” said Todd Runestad, the ingredients and supplements editor for New Hope Network, the Boulder-based media company that puts on the expo, now in its 38th year.
Panelists at Natural Products Expo West’s summit were bullish on CBD.
“This is the hottest product in the history of natural products, and there’s an opportunity for retailers to really sink their teeth into this whole hemp category,” Josh Hendrix, director of business development for Las Vegas-based extract company CV Sciences Inc., told some 500 people in attendance.
A stream of doctors, lawyers, retailers and producers discussed how the non-psychoactive CBD — or, more specifically, “hemp-derived, full-spectrum phytocannabinoid” products — could contribute to a $140 billion industry focused on health-and-wellness products. They equated cannabinoids to the emergence of Vitamin C or fish oils, claiming untapped opportunities for members of the natural products industry to supply consumers’ dietary, nutritional and wellness needs.
Natural and specialty retail stores accounted for approximately 14 percent of the $190 million in U.S. hemp-based CBD sales in 2017, according to according to Hemp Business Journal data presented Wednesday.
But by 2022, natural products retailers should have a significantly bigger slice of a significantly bigger pie.
The U.S. hemp-based CBD market is projected to hit $646 million by 2022, according to Hemp Business Journal, with 28 percent of those sales occurring in the natural and specialty channel.
By that point, overall U.S. CBD sales could be north of $1.9 billion, with GW Pharmaceuticals’ CBD-based Epidiolex drug accounting for nearly one-third of sales and marijuana- and hemp-derived CBD splitting the remaining share.
Complicating growth projections the fact that the U.S. Drug Enforcement Administration considers marijuana- and hemp-derived CBD to be illicit.
The hemp lobby and its lawyers, on the other hand, argue hemp-derived CBD is not a controlled substance, citing a 2004 9th U.S. Circuit Court of Appeals ruling on hemp foods that exempted parts of the cannabis plant from the Controlled Substances Act.
The DEA rule shook the confidence of retailers, manufacturers and even Expo West’s organizers in CBD, said New Hope Network’s Runestad. The trade show embraced hemp-derived extracts this year as the legal status of full-spectrum cannabis products — those containing a variety of compounds from the cannabis plant, not just isolated CBD extracts — became clearer, he said.
“That opened the floodgates,” he said.
When the Natural Products Expo West kicked off Wednesday, the cannabis compound was listed as a top trend to watch in 2018, and the CBD Summit was a hot ticket, with attendees spilling out of a Marriott hotel ballroom, Runestad said. Two-dozen hemp-extract companies are exhibiting at the trade show, and long-established players in retail and consumer packaged goods prowled the floor to give hemp-based products a closer look.
When it comes to the cannabis plant, the natural products industry can see beyond THC, said Jim Hamilton, chief executive officer of Neptune Wellness Solutions, a Quebec-based nutritional products company.
“They’re looking for inflammation (treatments), they’re looking for sleep aids, they’re looking for anxiety relief,” he said.
Neptune, known for krill oils, recently expanded its offerings to include cannabinoid-based products.
“Think of all the people taking sleeping pills and all the people taking opioids,” Hamilton said. “I think there’s a whole community that is going to want to embrace elements of this business.”