Are cannabis, hemp and CBD companies competition for each other? Or are they integrated?
CBD requires cannabis and or hemp for its production. All CBD Oil products come from full spectrum extracts of either plant. The difference between CBD derived from cannabis or from hemp is the percentage ratio between THC and CBD.
The concentrations of hemp based CBD usually are at or under the legal THC content limit of 0.3%; while the concentrations of marijuana derived CBD are specifically farmed and contain significant amounts of THC, sometimes as high as 30%.
This creates tremendous competition in both spaces. While CBD from hemp is more prevalent in the marketplace the overall market value is impressive. In 2018, the global CBD market was valued at USD 4.6 billion. Today, in 2020 it is estimated to have quadrupled in the past 2 years and stands at approximately 25 billion dollars.
How is this competition manifested? Licensing for manufacturers have been a constant in markets around the world. In Europe for example, CBD is legal in Spain and Spaniards are legally allowed to manufacture CBD at home. The finished product however, must contain less than 0.2% THC. As you can imagine, this has opened up a thriving CBD market in Spain. More important to the growth of the CBD market here is the fact that residents can legally buy and sell cannabis seeds. Surprisingly, people living in Spain can also legally receive seeds in the mail, sent by post from countries around the world. These options are not related only to Spain, many European countries have similar policies.
The market though is segmented. Cannabis based CBD is more prevalent in the medicinal sector and hemp based CBD is commonly used in the recreational sector. Large scale producers are integrating and there is a cross-over between the two. Therefore the competition is between the companies and their distribution to the market, as opposed to the market and it’s consumption of CBD products.