Cannabidiol (CBD) Oil Market Analysis

Cannabidiol Oil Market Analysis

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Based on the source, the cannabidiol oil market is categorized into hemp and marijuana. Hemp segment is expected to sustain its leading position with a CAGR of 18.9% between 2024 - 2032.

• Hemp-derived CBD oil, extracted from the Cannabis sativa plant with minimal THC levels is expected to fuel its widespread interest. Its dominance stems from hemp's adaptability, eco-friendliness, and legal status, which facilitate its broad cultivation and extraction.

   

• Furthermore, the legalization of hemp product sales and farming in numerous countries worldwide is poised to significantly boost shipments of hemp-based products in the foreseeable future. The 2018 Farm Bill (P.L. 115-334) notably eased restrictions and introduced the Domestic Hemp Production Program, simplifying hemp cultivation and sales for farmers. This legalization in the U.S. enabled farmers to utilize hemp to foster sustainable agricultural practices. Consequently, regulatory backing for hemp cultivation reinforces the demand for hemp-based products, including hemp-derived CBD products, thus solidifying the hemp market in the years ahead.

Based on product type, the CBD oil market is classified into original and blended. The original product segment is accounted for largest market share of 62.2% in 2023, maintaining its dominance throughout the analysis period.

• Original CBD oil boasts high concentrations of CBD, offering therapeutic benefits without psychoactive effects, hence catering to the increasing consumer demand for natural remedies.

   

• Also, the CBD oil market has experienced a surge in product innovation and a broad spectrum of offerings. This diversification caters to evolving consumer preferences, ranging from various formulations, concentrations, and delivery methods, such as tinctures, capsules, edibles, and topicals. As consumers seek personalized wellness solutions, the market continues to adapt, with an array of CBD-infused products designed to meet specific needs, ultimately shaping the industry's landscape and driving further growth.

   

Based on product category, the cannabidiol oil market is classified into flavoured and unflavoured CBD oil. The flavoured CBD oil segment is expected to achieve the highest revenue, reaching USD 14.6 billion by 2032.

• Consumer demand for enhanced taste experiences and a wide array of choices has propelled the flavored CBD oil segment into the market. Thus, to cater to diverse consumer preferences, CBD oil manufacturers prioritize incorporating natural fruit flavors to elevate product appeal.

   

• By infusing the organic flavors, the overall taste of CBD oil improves, appealing to a broader audience. For instance, Hempmeds, a Medical Marijuana subsidiary, expanded its Dixie Botanicals Dew Drops CBD oil tinctures line with strawberry and tangerine flavors. Also, the company's vanilla-flavored CBD oil has become popular due to its pleasant taste and the user-friendly design of the dropper, which facilitates easier consumption.

Based on application, the cannabidiol oil market is classified into nutraceuticals and pharmaceuticals. The pharmaceuticals segment is expected to exhibit 18.5% CAGR during the forecast timeframe.

• This dominance is driven by increasing recognition of CBD oil's therapeutic potential and its integration into pharmaceutical products for various medical applications including pain management, anxiety & depression, and other neurological conditions.

   

• In addition, increasing R&D efforts by pharmaceutical companies are leveraging CBD properties to develop innovative medications targeting diverse health conditions, ranging from epilepsy to chronic pain management. For instance, an article published in NCBI in 2020 suggests that CBD may offer potential benefits in alleviating chronic pain, enhancing sleep quality, and mitigating inflammation. This indicates a growing trend in the market for the therapeutic use of CBD products, including CBD oil, thereby fostering the market growth.

   

Based on formulation, the cannabidiol oil market is classified into pills & capsules, creams & roll-ons, transdermal patches, drops, and other formulations. The pills & capsules segment is projected to drive significant market growth, contributing to the largest revenue of USD 1.9 billion in 2023.

• Pills and capsules anticipated dominance in the market due to factors such as ease of use, precise dosing, and familiarity for consumers.

   

• Pills and capsules present a convenient and discreet method for ingesting CBD oil, appealing to individuals desiring its therapeutic effects without the inconvenience of dose measurement or the taste of oils.

   

• Moreover, these formulations are frequently favored by individuals accustomed to consuming supplements in pill or capsule form, further bolstering their dominance in the market.

   

Based on the distribution channel, the CBD oil market is classified into online and offline. Offline channels are expected to retain their market dominance, exhibiting significant market revenue of USD 13.7 billion by 2032.

• Offline channels including retail pharmacies and hospital pharmacies serve as primary avenues for consumers to access CBD products. These offline channels offer frontal interactions, consultations, and demonstrations, fostering trust and reliability among consumers.

   

• Moreover, they cater to a diverse demographic, providing personalized suggestions based on their needs and preferences. Thus, offline channels remain influential due to their established presence and direct engagement with consumers. On the other hand, the ascent of online pharmacies has enabled companies to broaden their reach and boost sales via online platforms, thereby augmenting the overall market growth.

In the global cannabidiol oil market, North America held significant market share of 59% in 2023 and maintaining its dominant position throughout the analysis period. This is due to the increasing adoption of CBD products for treating psychological disorders along with the growing legalization of hemp and marijuana.

• In addition, key players' strategic initiatives, including product launches, product innovation, approvals, and partnerships, are driving market expansion. For instance, in January 2021, Pure Extracts Technologies signed an agreement to procure 220 kilograms of high-potency cannabis dried flower from a prominent Canadian licensed producer and 1,000 kilograms of high-potency CBD biomass from a leading Western Canadian cultivator to bolster production of both THC and CBD extracts.

   

• Similarly, in February 2021, High Tide Inc., a retail-oriented cannabis company specializing in manufacturing and distributing consumption accessories, revealed that its e-commerce platform, grasscity.com, now offers hemp-derived CBD products in the U.S. and European Union. This expansion solidified the market for consumption accessories and CBD products, thereby supplementing the regional market size.