David Morey 
THC and CBD products are pretty much accepted within the health and wellness industry nowadays, and with more and more states across the US legalizing marijuana for both medicinal and recreational use, the stigmatism surrounding cannabis will likely begin to fade away within the near future.
Legalization aside, With an increasing interest in these types of products, it is worth considering how profitable the hemp market is, whether you are stock broking, retailing or distributing.
The Differences Between CBD And THC Explained
First, before going into the potential profitability of the market, it’s worth explaining some key terms surrounding the products contained within this segment of the health and wellness industry.
CBD and THC are often wrongly used interchangeably when discussing hemp and marijuana products, adding to the confusion that sometimes plagues businesses trying to establish a clear identity. Though both CBD and THC are compounds taken from hemp plants, their composition means they create different effects.
THC is a psychoactive chemical, whereas CBD is not. This means that THC products create a high, whereas CBD products will not.
Once again, the rules surrounding these products are a little hazy: products containing less or equal to 0.3% THC (the chemical that creates a high) are legal, though this can change from place to place. Some common examples of THC and CBD products include:
- Oils: The anti-inflammatory properties in the hemp plant are often used to create oils, which, when rubbed into the skin, can dull specific aches and pains.
- Vapes: Be careful when buying these and check their legality in your area. THCa vapes remain within the legal parameters of 0.3% THC content, but not all do.
- Gummies: Edible CBD gummies are thought to aid with a wide array of ailments, including anxiety, sleep deprivation and pain.
Since the passing of the 2018 farm bill, as you can tell through these product descriptions, there are a few problems when it comes to investing in the THC and CBD market. Firstly, the legality surrounding the products is often offputting for customers and sometimes creates difficulties in advertising.
Then there is the number of products and competition in the market. The hemp industry has grown overnight, and now, with the market maturing a little bit, many similar companies offer similar products with similar branding. This makes picking or creating a solid brand incredibly difficult.
The Influence of laws And Regulations
As mentioned above, the legality and red tape surrounding the cannabis industry are unclear. By November this year, a surprising 24 states had legalized the use of recreational marijuana. If the trend continues, cannabis will be legal in some form across the majority of America.
Mass legalization would equate to growth in the hemp industry, but it would coincide with the development of an already large pool of competitors. This market requires a ton of foresight and legal knowledge to navigate effectively.
As with any market subject to rapid growth and red tape, predicting the success of investments and businesses will prove difficult, but there are a few clear risks and benefits.
Benefits:
- Sustainability: Hemp is a highly sustainable, low-maintenance crop, making the plant favorable to environmentally friendly businesses and investors.
- Popularity: At the minute, CBD and THC products are at the forefront of media attention – making them perfect for collaborations with influencers and other advertisement campaigns.
- Increasing Research: Even though these products are still brand new, a lot of scientific analysis already proves they work. This research will continue to grow.
Risks:
- Insecurity: There are so many variables surrounding the market that will change its trajectory and overall shape. Though the return on investments is currently high, these figures could be subject to change.
- Lack of quality control: Currently, the market needs a quality standard or set quality control procedure. Sometimes, it can take time to gauge which products are best.
- Supply and Demand: With more and more states following suit and legalizing cannabis, the supply of hemp products could increase exponentially and prove detrimental to the demand for CBD and THC.
Final Thoughts
The hemp industry is an exciting puzzle for investors and retailers and is worth looking out for over the coming years. It’ll be interesting to see how the market reacts to new developments in laws and regulations and whether it can maintain its current trajectory on such uneven ground.
