The CBD industry is well on its way to reaching maturity. Just as the brand-new CBD market posed challenges to brands and consumers alike, maturity is bringing its own sets of conundrums for the CBD industry to work out.
What, exactly, are the most pressing challenges that the CBD market will face in 2023, and how is the industry likely to respond? As usual, the best CBD companies within the industry will set the standard, making it all the more important to know which brands to trust in 2023 and beyond.
The Current Status of the CBD Market
Starting with the 2014 Farm Bill, CBD has been on a long journey toward widespread acceptance and reasonable regulation that is finally beginning to wrap up. CBD is no longer a controversial, hot topic of conversation. It is widely accepted around the nation, and those who are still opposed to it generally aren’t very vocal in their beliefs.
With acceptance comes its own share of difficulties, though. CBD companies that once stayed afloat on high margins and low competition must now behave for all intents and purposes like “regular business.” Meaning, there’s no more easy money in the CBD industry even though the hemp market is larger than ever before.
3 Challenges Emerging in 2023
As we enter 2023, three challenges facing the CBD industry stand out above all others:
1. Industry Slowdown
There’s no denying that the hemp industry (and the wider cannabis industry) has experienced a considerable slowdown over the last few years. CBD has reached a point of acceptance called “market saturation,” meaning that everyone who wants to buy CBD has bought it by now.
After an initial boom following the passage of the 2018 Farm Bill, hemp cultivation cooled in the United States, and now acreage is down considerably compared to 2019 highs. Early private investors in the CBD industry have generally received their cut, leaving 2023’s CBD industry consolidated in the hands of 25-or-so major companies grossing more than $5 million per year.
2. Delayed Regulation
One of the factors behind the domestic hemp industry’s stagnated growth is certainly saturated demand. It hasn’t helped, however, that the FDA and DEA have been so slow in clarifying CBD’s regulatory status.
Institutional investors are still leery of CBD due to its quasi-legal status. While federal agencies have indicated that CBD is no longer considered to be an illegal drug, the new status of CBD has not been clarified.
At the heart of the matter is an archaic policy mandating that substances currently regulated as prescription drugs cannot also be regulated as over-the-counter drugs. Since CBD is the primary ingredient of the prescription drug Epidiolex, investors and brands alike are well aware that real change to CBD regulation may still be years away.
3. The Rise of Alternative Cannabinoids
The last major challenge that CBD companies will face in 2023 is increased interest in alternative cannabinoids like CBG, CBN, and delta 8. While ultimately more of an opportunity than an impediment, it will certainly continue to prove challenging for companies to incorporate alternative cannabinoids without compromising their main focus on CBD.
It’s getting to the point that consumers will trust your brand less if you only offer CBD products. At the same time, not all CBD users are fond of delta 8, which has intoxicating properties despite being sold online. Determining how to adapt to the rise of alternative cannabinoids will be a key determiner of which CBD companies make it and which don’t.
How the Industry Will Respond
Though the current environment is certainly complex, the CBD industry has faced much greater challenges than those it currently faces today. All that’s happening is the natural contraction that occurs whenever an industry starts to reach maturity. As long as CBD companies weren’t in the business to make quick, easy money, there shouldn’t be any notable changes to the CBD market in 2023 — except, perhaps, products becoming slightly more affordable due to competition.
