CBD is undoubtedly on the rise, but don’t get too excited about recent Starbucks CBD headlines.
This week, Cowen & Co released the results of a new study on CBD market trends. In the report, analysts predict that CBD will end up in Starbucks beverages.
Analyst Andrew Charles wrote, “Should the regulation of CBD oil as an additive to food/beverage change or craft/independent coffee shops find a way to comply with the existing regulation, we could envision Starbucks ultimately piloting the ingredient.”
The prediction may be a stretch, though. In an interview with CNN, Starbucks CFO Kevin Johnson denied any plans of incorporating cannabis or hemp derived CBD into their menu, saying “We’re well aware of what’s happening around CBD, THC, and all the trends in the industry… Right now, that’s not on the roadmap.”
Cowen & Co’s study also shows that 7% of Americans use cannabidiol. The analysis predicts that number will grow to 10% by 2025, meaningly roughly 25 million Americans. This growth would put the cannabidiol market at $16 billion.
According to the 100-page report by Cowen & Co,18 to 34-year-olds consume CBD at the highest rates. The study shows the following breakdown on types of CBD consumed:
- Tinctures 44%
- Topicals 26%
- Capsules 22%
- Beverages 19%
One Cowen Analyst, Charlie Neivert, noted that no other crops in the US could match the return from Industrial Hemp CBD.
Neivert added, “We would thus expect the country’s two largest crops, corn and soybeans, to lose some acreage to CBD hemp.”
Cowen & Co already rates companies like Tilray and Canopy Growth as “Outperform” stocks, and they will likely boom with the expected industry growth. Both companies released plans to invest in the US hemp industry when Trump signed the Farm Bill in December 2018 to legalize Industrial Hemp. Tilray acquired Manitoba Harvest for $320 million. Canopy Growth plans to invest $100 million in a New York hemp processing industrial park.
Despite the projected growth, states like New York have shut down CBD infused food and drink sales, and the FDA still requires that any CBD product marketed as having a therapeutic benefit must be individually approved.
Image via Edibles Magazine.
