Farm Bill passage to shake up CBD oil industry, lower prices: Industry insider
By Rick Schettino
Sep 06, 2018
Business is good for hemp-based CBD with 2018 expected to surpass $600 million in sales in North America according to New Frontier Data. The next two years are shaping up to be critical for the CBD market. Industry analyst Dr. Lloyd Covens, industry insider and publisher of West420 NewsWeekly asks, “will you be ready” as he gears up for the 5th CBOutlook Conference to be held at the University of Denver, October 16-17. Fittingly, the theme of this season’s conference is "Race for Market Share."
CBOutlook Conference coming to Denver this fall
The event which will focus on the "business and science of cannabinoids," will feature lectures and panels with 22 cannabidiol experts from around the globe speaking on topics ranging from medical research to branding and marketing, legal considerations, innovation in genetics and extraction, agriculture, and investing. Also featured will be an industry awards presentation for Design & Research Excellence.
In particular, the event hopes to give professionals in the industry answers to important issues such as how the 2018 US Farm Bill will affect the ability for domestic farmers enter the market, how GW Pharma's FDA-approved Epidiolex will impact consumer choices, and how clinical research and product innovation are expanding the consumer demand curve.
“Research is quickly ramping up,” Dr. Covens told PotNetwork. “Particularly, clinical trials for sleep, pain, and addictions will act to provide a larger market. For example, tobacco cessation products from CV Sciences which combine CBD and low nicotine combos are likely to be big sellers. In spite of tight FDA rules against making claims, CBD is getting a ton of word-of-mouth and social sharing about the good health outcomes of zero-THC CBD formulations for treating pain, mood, inflammation, and anxiety. Combinations of one-to-one CBD/THC are being linked to additional pain benefits.”
Hemp-derived CBD sales to outpace marijuana-derived CBD
Dr. Covens is not the only industry insider predicting big things for the CBD market. In a conference call this week, New Frontier Data suggested that 2018 will be the year that hemp-derived CBD will overtake total sales for marijuana-derived CBD in legal states such as California, Colorado, and Oregon, with 2018 sales likely to surpass $600 million. New Frontier’s projections for 2021 came in at $1.7 billion, including $600 million in estimated sales for GW Pharma’s recently approved CBD-based anti-epileptic drug Epidiolex — the first cannabinoid-based drug to be approved by the U.S. FDA.
“In addition to currently popular delivery forms such as capsules and pills, vape pens and topicals are expected to see future expansion,” predicts Covens. “Demand for CBD-rich hemp flower is also expected to expand, although it will likely remain a smaller segment of the CBD market versus oils and tinctures.”
Additionally, experts also expect favorable action by the United Nations World Health Organization in 2019 to further increase international acceptance of CBD as medicine.
“Pricing, now at a high of $150 for 1000mg of CBD can be expected to fall quickly as hemp-derived CBD becomes cheaper,” warned Covens. “2019 Farm Bill passage is 80 to 90 percent likely. It will take hemp off the [DEA controlled substances] schedule. CBD will then become readily available across state lines and also exportable to Canada and Mexico. Agile CBD makers who have a strong development plan for 2019-2020 have the opportunity to make substantial market advances — hence the theme of this event, ‘Race For Market Share.’"
High markups a thing of the past
When asked for his prediction for CBD prices Convens said, “Companies will no longer be able to charge 600 percent markups. My best guess is that the industry will deliver oils at a price of 10 cents per milligram [of CBD]. Full spectrum [oils] will be higher, but [CBD] isolates will be even cheaper. Consumers will have a wide variety of quality products at lower prices.”
Covens also pointed out that the Farm Bill will guarantee crop insurance for farmers. “This means that if a harvest rise over 0.3 THC [making the crop unsellable], farmers can recover their losses. More farmers are likely to enter the market, and the price of bulk hemp will be much cheaper.”
Dr. Covens expects leading companies to continue to “spend heavily on new delivery systems such as nano-sprays and quick release powders, and also on research to better understand the interplay of [cannabinoids] CBG, CBN, THC-A, and natural terpenes from cannabis — as well as other plants — and their positive impact on medical conditions.”
Covens also predicted that research into the production of biosynthetic forms of CBD [i.e., yeast, e-Coli, humulene] would compete, “but they won’t kill the natural [hemp and marijuana] plant options consumers are becoming most familiar with, and which will likely remain with favorite brands.”
On the retail front, Covens predicts, “local health food and specialty store sales will grow to be as large as Internet sales by 2021.”
CBD conference claims all-star speaker list
Here is a list of currently scheduled speakers and panelists for the 5th CBO:
Courtney Allen-Gentry, American Cannabis Nurses-RN (Omaha)
Eric Steenstra, Founder, Exec Director, VOTE HEMP (Washington, DC)
Dr. Stuart Titus, CEO, HempMeds/MJNA (San Diego)
Amber Wick, Senior V.P., Terp Center Diol (Colorado Springs)
Stephanie Wilson, Editor in Chief, SENSImedia (Boulder)
And here is a list of the some of the sessions currently scheduled:
Review of CBD Consumer Studies and Survey Data
Race for Market Share — Brands, Markets and Message
The Legal Road Ahead: The FDA, DEA, UN and California Health
HealthCare Provider Roundtable — CBD & Opioids, Pain and Mood
Innovation in Genetics, Extraction & Labs
Profile of a Smart CBD Investor: New Projects, New Funding
Improving Research Access — Best Practices for the Next Wave of Clinical Work
How can CBD Create A New Path to Opioid Help?
Innovation & Design Panel
Awards Presentation for Design & Research Excellence
When asked to provide the best reason why professionals in the CBD industry should attend this event, Dr. Covens says, “Our conferences provide value by creating a safe place to exchange knowledge and ideas about this remarkable, healing group of products.”
The cost to attend ranges from $222 for general admission tickets up to $945 for sponsorship, a booth, including tickets to the private events and the awards presentation. All participants will take home the 4th edition of the “CBOutlook CBD DataDisk.”