Why the world's largest corporations are invested in the development of hemp business

While the global hemp industry is at the initial stage of raising its life cycle. However, as in other industrial areas, hemp breeding will go through different phases, such as growth, shaking up, maturity, and a possible fall. It is at the beginning of the growth of the hemp market that large investment corporations invest in projects that provide them with the generation of new flows of financial resources, which are declining in the traditional economic sectors.

According to the rating agency Standard & Poor's, in the medium term, serious growth in the legal market cannabisa is predicted. Large corporations are struggling for a global hemp market share of more than $ 150 billion, trying to diversify the range of products offered. 

According to Standard & Poor's prepared report, hemp market growth will be observed in such sectors of the economy as health care, alcoholic beverages, soft drinks, tobacco, cosmetics. Large investment companies are looking for new growth opportunities in the hemp market at a time when their core business is declining, if not stagnating.

The report notes that young alcohol consumers consume it in much smaller quantities, preferring to use hemp for recreational purposes. However, not only in the alcohol sector there is a slowdown in growth. "In the market of alcoholic and non-alcoholic beverages, cosmetics and tobacco products, there are companies that are considering improving their financial condition by selling products based on hemp," the report says. A survey of the rating agency cites data from Euromonitor, which show that the global market for cannabis is already estimated at $ 150 billion, and 90% of them are illegal. Euromonitor expects the legal psychoactive cannabis market to reach $ 166 billion by 2025.  

“Large consumer companies are trying to capitalize on this growth, both through their own products, and through joint ventures with small cannabis companies with deep knowledge of the cultivation / processing / sales cannabisa,” the study said. It is emphasized that growth may be unstable due to the peculiarities of the market associated with the imperfection of the regulatory framework in individual countries and regions of the world. The largest market growth is expected in Canada, USA, Western Europe, as well as parts of South America.

In the coming years, the growth of the legal psychoactive cannabisa market will outpace the growth of hemp consumer goods, such as packaged food, soft drinks, tobacco and alcohol. For example, sales of traditional cigarettes in the United States are reduced by 4.5% annually, as new products in this market, such as e-cigarettes, are becoming increasingly popular with consumers. Therefore, Altria paid $ 1.8 billion for a 45% stake in the Canadian Cronos Group, which manufactures medical cannabis. Constellation Brands has acquired a stake in Canopy, a Canadian legal cannabis manufacturing company. According to S & P, this transaction should ensure the growth of the company amid falling sales of beer and other alcoholic beverages.

From the point of view of image losses, such large investors as Coca-Cola and Pepsi so far ignore the hemp industry. According to the report, the above investment giants do not want to be associated with hemp, because of the risk of negative perception of their products from traditional buyers.

Commentary of the Association "Ukrainian technical hemp"

While the global hemp industry is at the initial stage of raising its life cycle. However, as in other industrial areas, hemp breeding will go through different phases, such as growth, shaking up, maturity, and a possible fall. It is at the beginning of the growth of the hemp market that large investment corporations invest in projects that provide them with the generation of new flows of financial resources, which are declining in the traditional economic sectors. That is why the two largest investments in the global hemp sector of the economy belong to the corporation Philip Morris, the owner of Altria, and the Corona Beer Constellation Brands, which have invested more than $ 1 billion in products that include hemp. Scotts Miracle Grow, which specializes in garden products, has invested $ 1 billion in acquiring companies that help consumers grow plants without much soil. Despite the fact that Scotts Miracle Grow does not officially declare its entry into the market of psychoactive cannabis, in fact, the real goal of the company is to work in this particular sector of the economy.