Industry estimates put the total sales of both recreational and medical marijuana products in the U.S. at approximately $10 billion in 2018 alone while CBD products generated gross sales of more than $238 million in the same year. Both industries are still growing, and CBD registered a 57 percent growth rate in 2018. This brings an interesting possibility that if THC (marijuana) companies diversify into the CBD industry, they stand to benefit from both worlds. Here are some compelling arguments that show that working in both industries would be good for the THC companies.
No Significant Learning Curve
THC companies already have massive experience in sourcing the best marijuana raw material and processing it into products that are ready for the market. That same experience would come in handy when they open CBD segments within their businesses because the same methods that they use to source THC plants would be the same methods that they transfer to sourcing CBD plants.
In short, the benefits of branching out into the CBD industry would come without a major cost in terms of learning new systems.
You Address Both Sides of the Market
Some potential customers live in jurisdictions where marijuana isn’t legal either for recreational or medical use. Furthermore, some aren’t interested in THC but want to enjoy the benefits that other marijuana compounds offer.
A THC business which doesn’t have a CBD wing loses out on the two categories of customers described above. However, the THC businesses which start CBD sections have a foothold in both THC and CBD markets. This positions them to gain more since they have a bigger pool of clients to service.
It Pegs Back the Stigma
There is still a section of the population that thinks that marijuana is only for stoners. This stigma has done a lot to prevent the marijuana industry from reaching its full potential, although steps are being taken to maintain the trajectory of growth despite such attitudinal challenges.
By starting a CBD product line, THC companies hit two birds with one stone. First, they expand their pool of clients as explained earlier, and they also provide proof that marijuana has far more uses outside giving recreational users a high. As the population starts enjoying the other benefits of the cannabis plant, such as improving their overall wellbeing, the stigma directed at cannabis will drop by the wayside and the industry will blossom.
Industry analysts are of the view that the arguments above could have been at the back of the minds of the people at companies with interests in the CBD industry like The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF) and The Supreme Cannabis Company Inc. (TSX.V: FIRE) (OTCQX: SPRWF) as they assessed the potential of the CBD segment.
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