As CBD oil grows increasingly popular around the United States, it’s a potentially lucrative opportunity for investors. While the product has been prevalent among its core users for years, the progressive legalization of the substance means that it’s in more extensive use than ever.
As the stigma against cannabidiol dissipates, the growth potential for companies in the industry increases substantially.
For those who enjoy using CBD oil, the prospect of investing is also a chance to support the industry. Either way, there is an increasing number of opportunities for individuals to invest in the product.
In this article, we’ll look at how to invest in CBD oil, as well as factors you should consider when you weigh up the viability of the market.
The Outlook of the CBD Oil Investment Market
While CBD oil is a relatively new concept to some consumers, substantial investment in the product has been underway for several years. Research suggests that in 2020, the worldwide legal cannabis industry will exceed the value of $19 billion. Experts expect this estimate to exceed $40 billion by 2024.
While these figures encapsulate much more than just CBD oil, they’re an indication of the expected growth of all cannabis-related products. The rapid expansion of the market is primarily attributed to the changing attitude toward the legality of cannabis.
As governments grow more relaxed with cannabis regulation, there will be an increasing number of opportunities to capitalize on new consumers. New consumers mean there will be more investment opportunities as new CBD businesses start and existing businesses expand.
Is CBD Oil a Safer Bet Than Other Cannabis Products?
If you’re hoping to invest in the cannabis industry, you’re most likely searching for the least risky options. As regulation and legality continue to evolve in the American market, the prospect of investing might seem daunting for some individuals. CBD oil is often seen as a safer bet than other cannabis products, but is this true?
The benefit of investing in CBD oil is that it doesn’t have the same psychoactive properties as other cannabis products. Industrial hemp products are now legal across the entire country (if they don’t contain more than 0.3% of THC). While some people may refute the benefits of CBD oil, there is no argument to be made that it is harmful to society.
So, while many lawmakers still oppose the use of traditional cannabis, CBD oil is less controversial. If you’re worried about lawmakers backtracking on cannabis-related legislation, it appears that CBD products are safer than psychoactive cannabis products.
How to Invest in CBD Oil
If you hope to invest in CBD oil, you have a few options available to you. Below, let’s explore some different ways you can use your capital to invest in the CBD industry.
Involved Investment
If you’re an entrepreneur or you have previous business experience, you might consider direct involvement in a CBD oil company. Whether you purchase shares in a private CBD company or start your own CBD oil firm, there are plenty of opportunities to invest in your own CBD operation.
As many CBD oil companies are currently local operators, approaching firms in your region can be an excellent way to assess your available investment opportunities. There might already be companies in your city seeking assistance from local investors. If you can bring industry know-how to the table, this may increase your ability to gain access to early-stage investment.
If you plan to invest in a local CBD business, it’s critical to keep your eye on state regulations. While federal law is increasingly cannabis-friendly, some states are preventing full legalization from occurring. Assessing the region’s sentiment toward cannabis and CBD is critical for any investor.
Purchasing Shares in Publicly Traded CBD Companies
The easiest way to invest in CBD is to purchase shares in publicly traded companies that produce CBD oil or related products. Investing in established companies allows you to invest without having any day-to-day involvement in operations or menial decisions. There are now several CBD oil companies that trade on public stock exchanges in the United States and Canada.
Neptune Wellness Center, Valen GroWorks, and Charlotte’s Web are all publicly traded companies with direct involvement in the CBD industry. Numerous other firms also trade on public markets.
Many well-known American businesses are starting to invest in CBD oil and other cannabis products. While investing in these companies won’t provide you with as much exposure to CBD oil as the companies listed above, it’s still an excellent way to access significant brands that support the CBD industry.
Large American firms investing in CBD oil or CBD-related research include Anheuser-Busch, Teva Pharmaceuticals, and others.
Investing in Alternative Firms or Industries
While many investors want direct access to CBD oil companies, you can also invest money in businesses related to the CBD industry. For example, if you want to invest in CBD oil indirectly, you might consider an investment in a coffee shop that provides CBD coffee.
Alternative CBD Oil Businesses
If you would like to invest in CBD oil via an alternative business, various options are available to you. Let’s explore a few of the ways you can capitalize on the growing CBD oil market:
Coffee Shops
Coffee shops are emerging as a popular destination for CBD enthusiasts. Many coffee store owners now infuse CBD oil and other CBD products into their various coffees and drinks. Coffee shops are one of the most popular CBD-related businesses that you’ll find on the consumer market.
CBD Oil Edibles
While many people consume CBD oil using oil droppers or pills, there is a growing market for edible products. Many people associate edibles with psychoactive THC products, but they’re also popular with CBD users. Whether it be a restaurant or cookie producer, there are plenty of “CBD edible” businesses opening around the country.
CBD Marketing Services
As the CBD industry grows, firms are searching for marketing and promotion companies that understand the industry. There are now marketing services that specialize in helping CBD and cannabis companies expand into new marketplaces. This type of business is excellent if you want to invest in an industry that’s assisting the growth of CBD.
Factors to Consider
If you plan to use any of the investment methods detailed in this article, it’s critical to consider the viability of investing in CBD oil. Below, let’s explore some key points to keep in mind before you invest any money in this industry.
Legalization Appears to Have Legs
If you’ve kept your eye on the CBD industry in recent years, you’ve witnessed rapid legalization throughout the country. CBD oil is legal in all 50 states if the product abides by THC content standards set by the U.S. federal government.
It’s not just CBD oil that is experiencing rapid legalization across the United States and the rest of the world. Other cannabis products, such as recreational marijuana and medicinal marijuana, are also gaining legal status in various corners of the country. States such as Colorado, California, Washington, and Oregon allow adults to consume cannabis for recreational purposes.
While the legalization of other cannabis products doesn’t have a direct impact on CBD oil investments, it can change sentiment toward the industry. If more people are receptive to general cannabis consumption, it might create growth in the CBD oil marketplace.
Research is Continuing to Grow
As CBD oil’s legitimacy grows, so do efforts to research its benefits. While it’s already clear that there are medical benefits associated with CBD oil, this might be the tip of the iceberg. If researchers can prove that there are even more health advantages related to CBD, it could be a watershed moment for the industry.
The historical bias against cannabis products stunted research into its medical properties. The next few years could see substantial growth in the understanding of this unique health product.
This year alone, there have already been several published papers that examine the health impact of CBD oil.
Legality is Complicated
While legality is increasing, it’s also complicated. Cannabis regulation in the United States is in a critical transition period. As federal laws continue to offer progressive solutions for cannabis producers, some states are fighting back. This two-track system makes it hard to predict the future of the market.
Most people view the legalization of CBD oil as positive, but if the government becomes too involved, it may prove costly for smaller investors. Government regulation may restrict access to larger companies and create rules that are too costly for small firms to handle. If this happens, you might see a sudden shift in the viability of some CBD companies.
The bottom line is that CBD oil is still in a state of legal limbo. While there is no doubt that the market appears to be growing, overnight changes in regulation can have a drastic impact on the structure of the market. Investing in the early stages of a high-risk industry may prove costly.
It’s an Inter-Generational Product
While cannabis has an association with younger age groups, CBD oil has proven popular with all generations. It is growing in prevalence with older generations because it isn’t psychoactive and carries a host of health benefits.
A recent survey suggested that 8 percent of Americans over age 65 have tried a CBD product. This percentage accounts for a significant number of people, and it’s likely to grow if more CBD-related health benefits continue to appear.
Competition is Already Present
While the CBD industry is undoubtedly young, there have been several early actors in the market. If you’re hoping to access a market yet to develop any major players, you’re already out of luck.
As more investors enter the market, CBD products are increasingly competitive. In recent years, this has driven down prices and made it harder for small businesses to compete. GenCanna Global USA Inc. recently filed bankruptcy partly due to CBD price drops.
While these larger businesses do make the barriers to entry quite high, there are still plenty of independent producers experiencing success in the industry.
Potential Scams
Many investors and industry specialists consider the CBD industry as a “gold rush,” but all this activity can also create unwanted attention from opportunists. Almost all CBD products are experiencing a surge, so make sure to avoid potential scams. With any new industry, it’s essential to be wary of companies that don’t provide extensive financial information.
If you’re unable to verify a company’s key facts or financial figures, they’re likely to be a risky investment. Remember: If something sounds too good to be true, it probably is.
The CBD Oil Industry is Eager to Set Standards
As the CBD oil industry is still relatively new, it doesn’t experience the same regulations as other health products. The FDA may take issue with a company providing false information, but the overall regulatory climate is minimal. A lack of legitimacy can be a deterrent for many investors.
There is now a self-regulating body that upholds strict standards for CBD producers in the United States. The U.S. Hemp Authority provides certifications to hemp producers that uphold industry-leading production standards. This industry regulatory body ensures that CBD consumers can identify producers that act within reliable guidelines.
While this might not be the same as FDA regulation, it’s an excellent first step. By providing control and credibility to the industry, the U.S. Hemp Authority may help investors gain credibility with American consumers.
Start by Educating Yourself
If you’re planning on investing in CBD oil, it’s critical to understand the product and its industry. You don’t need to be a CBD oil user to invest in this growing market, but knowing the product and its applications can help you make a more informed investment decision.
Our website and blog are excellent resources for any individual who wishes to learn more about CBD oil and its benefits. Make sure to explore our content if you’re unfamiliar with the details surrounding this unique supplement.
FAQs About Investing in CBD Oil
Question: How to invest in CBD oil?
Answer: Involved investment, Purchasing shares, and investing in alternative firms are among the three common types of investment in CBD.
Question: Will the market value of CBD oil increase?
Answer: Research suggests that in 2020, the worldwide legal cannabis industry will exceed the value of $19 billion. Experts expect this estimate to exceed $40 billion by 2024.
Question: Is CBD oil safer to invest in rather than other cannabis products?
Answer: CBD oil is often seen as a safer route in investing than other cannabis products.
Question: Is CBD oil legal?
Answer: Currently, CBD oil is legal in all 50 states if the product abides by THC content standards set by the U.S. federal government.
Question: Are there scams in the CBD industry?
Answer: Yes. With any new industry, it’s essential to be wary of companies that don’t provide extensive financial information. If you’re unable to verify a company’s key facts or financial figures, they’re likely to be a risky investment. Remember: If something sounds too good to be true, it probably is.
Question: What is the first step in investing in CBD Oil?
Answer: Start by educating yourself. If you’re planning on investing in CBD oil, it’s critical to understand the product and its industry. You don’t need to be a CBD oil user to invest in this growing market, but knowing the product and its applications can help you make a more informed investment decision.
