CBD food market identified as priority for Canadian economic recovery

The medical products market based on the therapeutic properties of the hemp plant could bring the Canadian economy about $ 1.9 billion in the first year, with an average growth of about 7% annually. Five years after the change in legislation, the market size could grow to about $ 2.5 billion.

The Canadian Health Food Association (CHFA) ​​has released a report prepared by the Institute of Fiscal Studies and Democracy (IFSD) in which it tried to assess the potential size of the CBD / CBD market in Canada and its positive economic impact if the government of a country regulates the use of plant cannabinoids in such a category of goods as “health products”.

Most often, the category of “health products” refers to nutraceuticals (products containing healthful supplements that have medicinal benefits). They are followed by topical products, beverages, food, cosmetics, etc. The above report states that “assuming Canadian consumers are able to use CBD products and their tastes do not change over time, we can predict an increase in demand for each type products containing plant cannabinoids for an extended period of time. In particular, by 2023, the market volume of nutraceuticals, which will include plant cannabinoids, will reach $ 1 billion. ”

Consumption by type of CBD food

The authors of the report base their assumptions on the fact that “estimates of a number of analytical and consulting companies indicate that sales of CBD products in the United States doubled in 2019. This dynamics of market development was associated with the actions of individual administrative-territorial units of the United States, which abolished the need to regulate the use of non-drug cannabinoids of plant origin and allowed their sale as a food additive. Food and Drug Administration (FDA) regulations significantly constrain the potential for exponential demand for CBD products in the above states, so licensed dispensaries account for the bulk of their sales. A number of market experts predict a significant growth in the market for drug-free cannabinoids based on the research carried out if the FDA relaxes the regulation of the use of CBD products. Under the above scenario, sales of products containing plant-based drug-free cannabinoids are expected to skyrocket for at least the next five years as consumers become more aware of their potential benefits. ”

For example, Dan Demers, Vice President of Government Affairs and Regulatory Affairs at CHFA, states that: “We want to demonstrate the potential that this action can benefit multiple industries across Canada. This is especially important after the COVID-19 pandemic. Canada needs such opportunities to support economic recovery, be well positioned to enter new export markets, and create significant numbers of jobs, mostly in depressed regions of the country. The market for health products using cannabidiol is the economic potential of opportunity that Canada needs. However, in the global marketplace, we will lose if we do not take quick steps to regulate this activity. We have commissioned IFSD to explore the economic opportunities presented by the cannabidiol-only health products market in Canada. There is research on the size of the CBD market in other jurisdictions such as the United States or the United Kingdom, but we want to be able to show our country's key decision makers the size of the potential market for health products that include drug-free cannabinoids in Canada in the event that, when this type of activity will be regulated ”.

There are currently no legal mechanisms to bring non-drug cannabinoid-based OTC health products to the Canadian market. With an increasing number of citizens of the country using drug-free cannabinoids to maintain their well-being and the lack of legal mechanisms to bring them to the market, high consumer demand will contribute to the emergence of an illegal market for these types of products. 

“We have estimated the economic impact of the above mentioned regulatory changes, if they were adopted in 2019. Our simulations suggest that the non-medical market based on the therapeutic properties of the hemp plant could bring the Canadian economy about $ 1.9 billion in the first year, with growth averaging about 7% annually. Five years after the legislative change, the market size could grow to about $ 2.5 billion. The proposed changes could create thousands of full-time jobs for Canadians nationwide (about 9,000 direct equivalent full-time jobs and about 6,000 indirect and induced vacancies). The CBD health products market can benefit a wide range of industries in Canada besides wholesale and retail. By 2023, simulations show that the CBD market could increase real GDP by $ 2.1 billion and potentially create 20,000 additional jobs, ”said Kevin Page, President and CEO of IFSD.

“This regulatory imperfection is a significant missed opportunity for businesses looking to meet the demand for CBD health products both in Canada and around the world. The demand that can be met by regulated cannabinoid health products is currently mainly met by products from the illicit market. This is the case in other jurisdictions around the world, such as the UK, Australia and the US, but these states are taking steps to create a regulated market for drug-free cannabinoids. It would be embarrassing to see Canada lose its pioneering advantage in the global drug-free cannabinoid market as governments around the world develop a regulatory framework for CBD products with significant therapeutic properties, ”said Mr Demers. 

Commentary of experts of the Association "Ukrainian technical hemp"

According to the conclusions of the prepared analytical materials, the new market for health products, the basis of which is the therapeutic properties of cannabinoids, will ensure the growth of innovation and competitiveness in the world market for nationally produced products, create thousands of jobs for citizens, mostly in depressed regions of the country, will benefit a number of industries. , will attract investment in new research on this topic and the creation of exclusive products with high added value.

How national cannabis growers can benefit from the adoption of the proposed changes to the existing departmental regulations governing the use of the therapeutic properties of technical hemp with a therapeutic focus will be discussed during the 5th course of training for students of the Hemp University, which will be held on October 14-15 on the basis of the National University of Bioresources and Nature Management of Ukraine (Kiev).