Europe's Cannabidiol (CBD) market is poised to grow quickly, according to analytics and research firm Brightfield Group.
A report released Tuesday found the continent's CBD market could reach $416 million and uptick quickly. The report forecasted the continent's CBD market is expected to grow $1.7 billion by 2023, with its 2019-2023 CAGR totaling 42 percent.
This growth relies on receiving the needed approvals and other key drivers.
“Although Europe’s legal CBD market remains relatively small...it is poised to grow more quickly with both the likely blessing of global bodies such as the UN, and the European Union’s Novel Foods Act (health and safety regulations) eventually permitting for CBD to be sold like other ingestible products on the mainstream market," the report said.
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Bethany Gomez, Managing Director for Brightfield Group, likened the current European CBD market to the U.S. sector from three to five years ago.
"[The European market] is highly fragmented, consumers are just starting to become more aware of CBD and its benefits which means that the market has a lot of room to run for years to come," said Gomez.
"The industry will face significant challenges until continent level solutions can be implemented, particularly restrictions around ingestible products. Right now companies are benefitting from country-level regulations (or loopholes) that allow for specific product types to proliferate."
2 Big Factors
Two driving factors could influence Europe's CBD market.
First, the report noted changes in tone concerning cannabidiol, namely the United Nations and the World Health Organization.
“Discussions and decisions within these circles - and at the state level - have been much more friendly toward CBD’s legalization and use than that of cannabis overall,†the report said.
Second, the continent's spending power, $17 trillion combined GDP in 2017, is expected to couple with many citizens' desire to find an alternative to smoking tobacco. Brightfield Group explained, “Tapping into this market - or even some small part of it - has the potential to be very lucrative, especially for those who join the market at a relatively early juncture.â€
The UK and Austria lead Europe's CBD market, with both expected to earn about $80 million In 2018. The report also pointed out Germany's growth, which is forecasted to generate a European-leading $605 million by 2023.
Other nations, including Switzerland and Spain, were also singled out for its efforts to build and improve regulations, which should give buyers more confidence in the market in the years ahead.
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