Across the board, professionals are (belatedly) standing up and taking notice of an industry with massive potential. Of course, we’re talking about the CBD industry and the myriad of products that are being infused with cannabidiols (CBD) at this very moment. The good news is that there are numerous opportunities for entrepreneurs looking to get a piece of the action and break into this exciting field. The bad news, though, is that few people really understand the CBD marketplace –– or what CBD even is! Thankfully, today we’re going to set the record straight and explain everything you need to about this burgeoning industry:
What is CBD?
As mentioned above, CBD stands for cannabidiols –– a biochemical substance derived from cannabis plants (otherwise known as hemp). CBD is not to be confused with THC –– tetrahydrocannabinol. THC is the active agent in hemp or marijuana with psychedelic properties. (In other words, THC is the stuff that gets you high.) Some legal marijuana products contain both CBD and THC. However, for our purposes, we’re going to focus solely on products that are infused with CBD and not THC.
What are the Benefits of CBD?
Though CBD has been purported to offer a wide variety of health benefits, it can safely be said that CBD helps reduce anxiety in patients. It also has been documented to treat certain forms of chronic pain. Lastly, it’s been approved to treat seizures for two different forms of epilepsy. CBD may not be the “miracle drug” that some prospectors claim it to be, but it does offer some tangible medical benefits.
What are CBD Products?
CBD can be infused in a vast array of products. From foods like gummies to cosmetic products like creams, many consumer products can be made to contain CBD. Dispensaries and CBD manufacturers utilize equipment like high-pressure homogenizers to break down cells and isolate chemicals from other properties and to ensure that creams and other products contain a uniform amount CBD or THC. One may not immediately associate a sophisticated piece of equipment like a cell homogenizer with marijuana sales, but the two are actually linked.
Is CBD Legal?
This is a tricky question for several reasons. First, while a number of states have taken measures to fully legalize marijuana products for both recreational and medical usage, others do not allow for the production or sale of marijuana products at all. In states like Kentucky, Louisiana, and Wisconsin, marijuana is fully illegal –– even in medical form. For what it’s worth, the federal government passed a law (the Farm Act) legalizing CBD products, but it’s still at the discretion of individual states whether or not to legalize marijuana products. CBD is becoming increasingly popular, and many speculate that it will, one day, become fully legalized, but we’re not at that point yet.
Risks & Benefits of CBD Investment
As mentioned above, investing in the CBD industry now presents a tremendous opportunity for savvy entrepreneurs. Because the industry is in its infancy, no business has a stranglehold on the market, and a “power vacuum” exists in this sector. If you really know what you’re doing, you can make a lot of money partnering with a CBD manufacturer or dispensary.
However, as with any investment, some risks are going to be involved. The murky legality of the product makes its future difficult to forecast. What’s more, many inexperienced opportunists populate this field, and they may start a company without having a true strategy for business success in place. Finally, it’s easy to overlook the many difficulties involved in starting a CBD-based business on your own, which include gaining proper licensing and government approval. CBD may yet prove to be the next “gold rush” so to speak, but investors should only pursue this channel if they’re well-versed in the product/industry.