Hemp-derived CBD sales reached $170 million in 2016 and the market is estimated to hit a billion dollars in the next three years, according to a Brightfield Group report outlined by Forbes. Brightfield estimates the industry will experience a 55 percent compound annual growth rate over the next five years.
Bethany Gomez, Brightfield director of research, explained that “one of the most surprising” aspects of the study “was how many companies are currently operating in the space, and how few of them are generating significant revenues.”
“Essentially everyone is trying to do hemp, but only a handful are doing it well,” she said in the report. “It’s seen as easy because it can be sold online but, with restrictions on traditional marketing, it is very difficult to connect with your core consumer and even communicate why they need your product.”
The research found that the bulk of sales, 64.5 percent, are through online channels, followed by 17.8 percent at smoke shops, with 9 percent of sales coming from dispensaries. The remaining sales are through doctor’s offices.
CW Hemp, produced by CW Botanicals, has a 7 percent market share, while PlusCBD Oil, manufactured by CV Sciences is second with a 5 percent market share. Elixinol, HempMeds, and CannazALL each comprise 2 percent of the market – the remaining market is shared by companies with relatively low sales.
The top 20 brands averaged $2.1 million in annual sales in 2016.