Few products have grabbed the attention of a global consumer market within such a short period of time.
Cannabidiol – or CBD as most people call it – has generated a lot of buzz over the past couple of years following the legalization of cannabis in Canada and multiple US states.
CBD is one of the most prevalent chemical compounds found naturally in hemp and marijuana plants. While many tend to associate marijuana with feelings of psychoactivity, CBD by itself does not cause a “high” and is non-intoxicating.
According to a report from the World Health Organization: “In humans, CBD exhibits no effects indicative of any abuse or dependence potential…. To date, there is no evidence of public health-related problems associated with the use of pure CBD.”
On the contrary, studies have shown that this cannabis ingredient may bring health benefits such as anxiety and pain relief. Some even go as far as to call it a “wonder supplement”.
There are also claims that CBD may be used to combat medical conditions such as epilepsy and cancer, but those will take more research to gain public approval.
Prior to 2018, many Americans were still unfamiliar with CBD and the potential health benefits it entails.
This all changed with the passing of the 2018 Farm Bill, which made the growth and purchase of hemp plants legal in the US. Despite not completely legalizing CBD, the new bill made it much easier for industrial hemp growers to produce CBD.
Gallup survey of CBD use
Market interest and demand skyrocketed soon after, as more and more people began to recognize and embrace the compound’s therapeutic properties. A 2019 survey by Gallup shows that one in seven Americans consume CBD in some shape or form.
Now, CBD products have become one of the most popular ingredients in the wellness and edibles space.
The CBD market is the perfect example of an industry undergoing an exponential growth stage.
Last year, the global market size for CBD was estimated at around $2.2 billion last year, more than ten times its value of $200 million back in 2015. This represents a CAGR of more than 46% as we head into a new decade.
This type of growth will likely continue in the coming years as the social stigma surrounding CBD continues to evaporate.
North America CBD market growth
Industry analysts at Brightfield Group predict that the CBD market’s value will exceed $22 billion per annum as early as 2022.
In the US alone, the collective market for CBD sales is projected to surpass $20 billion by 2024, according to BDS Analytics and Arcview Market Research.
These figures are slight increases from the forecast made by New York-based investment bank Cowen & Co, which conservatively estimated that the market could pull in $15 billion by 2025.
While there are varying figures projected for the CBD market value going forward, the one common factor is that there is a prevalent “green rush” in the US and around the world.
UK’s CBD Boom
Last year, North America by itself constituted nearly half of the world’s CBD sales and is expected to remain a dominant force in the global market. But it is not the only major market where CBD figures are going off the charts.
In the United Kingdom, while still at an earlier stage of the cycle, is experiencing an unprecedented CBD boom. The UK CBD market was valued at £300 million in 2019, making it arguably the second largest in the world after the US.
Similar to its US counterpart, sales there are projected to be worth some $22 billion within three years. Surveys done in 2019 suggested that as many 6 million people in the UK have already tried a CBD product.
While Covid-19 has had a crippling effect on the British economy, demand for CBD in the UK remains on an upward trend. Total CBD users in 2020 (including those who intend to do so) are projected to reach 8.4 million, with nearly 40% of those expected to buy more products than before.
The main reason for the industry’s maintained growth? Again, it links back CBD’s health benefits including anxiety and stress relief; these may be what people needed the most during a pandemic.
Around 15% of UK adults are reported to have used CBD during the first four months of the year, and a third of CBD users were said to have increased their daily dosage during Covid-19.
In short, the Covid-19 has only reinforced the importance of self-care during 2020. As seen in major markets like the UK, the “mainstreaming” of CBD — from last resort to lifestyle — is accelerating at a rapid pace. Without a doubt, CBD products will be at the centre of wellness trends for years to come.
Love Hemp: UK’s Leading CBD Supplier
This brings us to Love Hemp Ltd., one of the pioneers of the European CBD scene.
Established in 2015 by two London entrepreneurs, Love Hemp quickly gained recognition in the UK with the launch of innovative products such as the Love Hemp water. The company’s product line has since expanded to a range of over 80 products including CBD oils, edibles, cosmetics and vapes, sold via its websites Love Hemp and CBDOilsUK. It also has a strong CBD wholesale presence through its LH Botanicals subsidiary.
Love Hemp products
Love Hemp’s founders, Tony Calamita and Thomas Rowland, recognized the lack of a premium CBD brand in the UK, but believed in its potential after seeing how it could grow to a stage where it’s mainstream and widely available.
Since its inception, sales have grown rapidly on a year-to-year basis, reaching a reported figure of £2.6m in 2019. This year, the company is aiming to hit £6 million in total revenue, thanks to a 122% sales growth through February-September during the Covid period.
Love Hemp online sales growth
CBDOilsUK sales growth
The company’s rising popularity has allowed it to secure listings in over 1,000 stores, including some of the biggest retailers in the UK, Ireland and Netherlands.
Among the list of retailers is Boots, UK’s leading pharmacy-led health and beauty retailer. This week, the Love Hemp brand was launched across 200 Boots stores nationwide and online. Available products include CBD oil liquid drops in natural, peppermint and cherry flavour, as well as CBD atomiser sprays in peppermint and Valencia orange.
“Launching nationally in-store and online with Boots is a real turning point in the UK for Love Hemp, as it’s important to reassure our consumers that they are buying credible products from credible retailers,” co-founder Calamita stated in a press release.
The brand could also be found at Sainsbury’s, Ocado, Holland & Barrett, WH Smith and even Amazon.
Finding Another Canopy Growth
Last year, Love Hemp’s continued success caught the attention of North American cannabis investment firm World High Life Plc (AQSE: LIFE) (OTCQB: WRHLF), run by Canadian entrepreneur David Stadnyk and former president and CEO of The Supreme Cannabis Company.
According to WHL, its business mandate is to build a portfolio of companies that could follow a similar path as the industry’s most successful forerunner, Canopy Growth Corp. (NYSE: CGC).
In a media brief earlier this year, Stadnyk stated:
“Essentially, our mandate was to find the innovators positioned where the Canopy’s of the world were 5-7 years ago. Innovators that were leading by example, operating with best practices, having established brand recognition in major retailers and a robust online sales and marketing platform, demonstrating substantial sales growth on all fronts, and companies built to be agile and responsive because we knew from experience that this is a rapidly changing industry and those attributes are essential.”
Love Hemp has not only met these criteria as an acquisition, but it is also proving to be the “agile and responsive” target that WHL demands from its investment portfolio, Stadnyk added.
Stadnyk pointed to the fact that Love Hemp had to shift its focus this year due to the Covid-19 pandemic, and despite the challenges, the company still came away with a stronger online sales presence.
In doing so, the CBD supplier managed to achieve a 39% increase month-over-month since January, while also expanding its product line to meet consumer demand.
Love Hemp’s success story culminated with an eventual £9m acquisition by World High Life last September, but the business’s growth is far from over.
Building on an impressive consumer, trade and business audience of over 1.7 billion, Love Hemp is now looking to expand its brand across the rest of Europe and worldwide.
An expansion into North America is planned for Q1 2021 and Japan by the end of next year, and the company is also in discussions with authorities in South Korea and Thailand to launch its CBD products.
While Covid lockdowns have curbed some of the company’s global ambitions, it was still able to boost revenues with the migration to online platforms and a robust marketing strategy.
With the holiday season around the corner, the company recently unveiled its first ever CBD Christmas collection, leading the next line of New Love Hemp products heading into the new year.
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