Why CBD will become very Cost Effective over the next 18 Months
Recently, President Trump signed the bill that effectively legalized hemp and lifted all federal restrictions on CBD. This historic event now makes hemp cultivation, production, distribution, sales completely legal within the United States with the hopes of encouraging greater agriculture and increasing more jobs.
The CBD market, by itself is expected to reach $ 23 billion by 2022. Unlike recreational cannabis, there are major institutions behind the hemp cultivation efforts in the United States. This is no Mom and Pop shop scenario. The folks behind the hemp bill wants to create massive infrastructure and expand the hemp cultivation efforts on a mass scale.
As a result, the price per kilo of Hemp will become cheaper. With a surplus of hemp, the associated cost of CBD will also drop. More importantly, what can we expect will happen to other sectors when Hemp is in full momentum?
The Hemp Revolution
Popular Mechanics, in 1937 predicted that Hemp would be the first “Billion Dollar Crop”. In 1937, the value of the dollar is about $ 17.5 dollars today. In other words, the buying power a consumer had for every dollar in 1937 was equivalent to $ 17.5 dollars today.
Interestingly, the early predictions of the Hemp Market is sitting somewhere in the 17 billion dollars to the 25 billion dollar margins.
However, in 1937, the technology wasn’t remotely close to what we have today. Our understanding of engineering, cultivation, chemistry and the likes are infinitely more advanced. If in the early 1950s, there were more than 50,000 unique products that could be derived from the hemp plant, what would be the amount of products we could achieve using today’s technology?
What will Hemp start disrupting? Paper production? Plastic Production? It’s not hard to imagine that switching to a more sustainable crop makes sense within the current ecological narrative around the world. People are angry about the Amazon being desecrated for industry and turtles choking on plastic straws, hemp in both of these instances can provide a viable alternative.
I’m not saying it is going to do that, but if the current sociopolitical narratives remain steadfast, we could see the industry pushing into more sustainable solutions to major industries.
This disruption will also start upsetting the power structures within economies. Those who benefitted from the illegality of hemp might soon start seeing market shares drop.
One thing is certain despite all of this speculation, CBD infused medicines and products will be one of the flagship products that will hit the global market as a result of the hemp legalization efforts that just occurred.
Why CBD will be THE THING
Aside from the fact that CBD based medicines have been approved by the FDA, there are virtually no more restrictions on a federal level when it comes to CBD. This means, that if companies do not make medical claims about their product and CBD, they have the freedom to infuse it with everything.
You can have CBD lotions, tinctures, edibles, sprays…you name it. There will be no more restriction on how you can use it except for the side of making false or unproven medical claims.
As a result, one of the first things that we can expect to happen within the Hemp market is the explosion of the CBD market. Manufacturers will now begin to drop a lot of money into research and development and within the next 18 months you’ll start seeing new CBD products pop up on shelves in places like Walmart, Wholefoods and the likes.
In all likeliness, CBD will also be removed from the international banned substance list, meaning that international commerce will be readily available.
Next year will be a crucial time for the cannabis industry as a whole, but Hemp is now a viable legal market. If you’re an investor, start looking into hemp companies, manufacturers and the likes. There will be plenty of opportunities to make money in this New (old) industry that will most assuredly become a major economic power.
How to Prepare for the Hemp Revolution
As I spoke about in an earlier article, you need to plan for the future. There will now be a massive outpouring into the CBD market in the next coming year and a half. If you want to take advantage of this initial flood, then I strongly recommend you figure out some way to create an appealing, easy to use CBD infused product that has a low cost. Prices of CBD will drop as more hemp crops are cultivated. So your initial costs will depreciate over time, providing you with a greater profit margin.
For those who simply don’t have the capital to invest presently, start looking towards future applications of hemp. Things like constructions, plastics, clothing and the likes all will become viable markets to pursuit.