Why Investing in the Low-THC Cannabis and Hemp CBD Space Makes Sense
The low-THC cannabis and hemp CBD markets are rapidly expanding, despite recent economic challenges besetting the industry. Not all cannabis users are looking to get high. Instead, most are looking for specific, measured results. That’s where low-THC cannabis and Hemp CBD products come in. Users report numerous benefits in their physical and mental health after taking these types of products without the “high” associated with marijuana use. Due to these anecdotal reports and various clinal studies, low-THC and Hemp CBD products have seen a spike in popularity. In fact, the market has just begun to take off and is expected to reach astronomical heights. In this article, we’ll discuss why investing in the low THC and CBD space makes sense, including:
- Future Financial Projections of the Cannabis Industry
- Clinical Research that Supports low THC and CBD Benefits
- The Legal Landscape
- Changing Viewpoints on Low THC and CBD
- Rising Rates of Usage Among Seniors
Future Financial Projections of the Cannabis Industry
Since its legalization in certain states across the United States, the cannabis market has skyrocketed and is projected to continue to grow rapidly over the next few years. In fact, recent research from New Frontier Data found that sales of cannabis in legal states are projected to grow at an annual growth rate of 14% over the next six years. In 2025, they expect sales to reach nearly $30 billion. Researchers estimate that about 38.4 million U.S. adults consume cannabis each year. About 36% of those users report using cannabis daily, while 59% use it around once a week.
The people most likely to use cannabis are between the ages of 25 and 44, but not all of these users are looking to get high. A recent Forbes article reported that users are increasingly drawn to low-THC Cannabis options. Consumers want to try out cannabis without having to deal with some of the possible unwanted psychoactive side effects of THC, such as mood changes and anxiety. Instead, they want to sample all the benefits of cannabis without the high, and low-THC Cannabis products offer the perfect way to do that.
THC isn’t the only powerful cannabinoid in cannabis. The popularity of CBD, a non-psychoactive component of cannabis, has soared in recent years. The Farm Bill of 2018 made selling CBD with a 0.3 percent THC content legal across the United States. Since then, consumers have been flocking to the substance. In fact, Grand View Research predicts that the global cannabidiol market, which was valued at $4.6 billion at the end of 2018, is expected to grow at an annual growth rate of 22.2% through 2025. This spike in growth is due to increasing awareness of possible therapeutic benefits of the substance as well as mainstream retailers selling CBD products.
CNN Business recently reported that many experts believe that the cannabis industry may be recession-proof. In fact, cannabis sales could help inflate state budgets, many of which are currently struggling due to the economic disruption caused by the COVID-19 pandemic. While many businesses were forced to shut down to slow the spread of COVID-19, cannabis businesses were deemed essential in many legal states. Despite taking an initial hit in March 2020, sales have remained steady. A June 2020 market report from Stifel analysts showed that cannabis sales were up 26% in Washington and 46% in California, even during the pandemic.
Clinical Research that Supports low-THC Cannabis and Hemp CBD Benefits
More and more studies are finding that low-THC cannabis products may have therapeutic benefits over and above high doses of cannabis. In 2007, researchers found that cannabis was effective for pain relief, but only within a narrow dosage window. Participants reported relief from the medium or low-level dose, while the group taking the high THC dose of cannabis experienced more pain and adverse side effects. A study in 2012 that appeared in the Journal of Pain studied cancer patients with high levels of pain and found that participants who received the lowest dose of THC showed the most relief from pain. Those receiving the higher doses reported negative side effects and no relief from pain.
A review of low THC cannabis in the treatment of cancer also found its ability to inhibit the growth and proliferation of cancerous cells promising, but states that more clinical research is needed in this area. Most importantly, the review noted that low THC cannabis can deliver an alternative to traditional cannabis and eliminate the possible unwanted side effects associated with the use of THC, particularly in children and elderly patients. Additionally, it appears that users prefer low to medium doses of THC as opposed to higher ones. In a randomized-controlled trial (Vaporization as a smokeless cannabis delivery system: a pilot study), volunteers were given low, medium, and high doses of THC cannabis. Twice as many people preferred the medium dose over the high dose, based on outcomes such as how “high” they felt and how “enjoyable” they found the experience.
There is certainly no shortage of studies looking into the possible health benefits of CBD. Researchers have been studying the effects of CBD on pain for years with promising findings. A new study from the University of New Mexico was one of the most conclusive yet, finding that full-spectrum CBD oil greatly reduced pain in mice. CBD has also been found to enhance cancer treatment. A study in 2019 (Inhibition of ATM kinase upregulates levels of cell death induced by cannabidiol and γ-irradiation in human glioblastoma cells) looked at the effect of CBD on certain cancer cells called glioblastoma. It found that cannabidiol actually induced cell death and enhanced the sensitivity of the cancer cells to radiation, making them easier to target and eliminate.
Researchers also believe CBD may help improve sleep. A 2014 study (Effects of acute systemic administration of cannabidiol on sleep-wake cycle in rats) on Wistar rats found that CBD significantly increased total sleep time. Not only that, but the amount of time the subjects spent in REM sleep increased as well. A 2015 review found that CBD provides promising results in the treatment of seizures, while avoiding the psychoactive effects of large doses of THC. Additionally, researchers believe CBD may be helpful in treating anxiety and PTSD. A 2018 review concluded that CBD shows promising effects on relieving symptoms of PTSD with little to no side effects as opposed to typical pharmacological therapy. CBD has also been found to be potentially promising in the treatment of inflammatory bowel disease, depression, obesity, and much more.
The Legal Landscape
Currently, in the United States, marijuana is an FDA Schedule I drug. However, marijuana legalization is spreading across the country. Eleven states plus the District of Columbia have fully legalized cannabis, meaning licensed operators can sell marijuana for medical or recreational purposes. Medical marijuana is legal in 33 states. In Canada, marijuana has been fully legal across the country since 2018. Plus, the Farm Bill of 2018 made hemp legal across the entire United States if it contains less than 0.3 percent THC.
Projections indicate that eleven more states could legalize marijuana in 2020 and beyond. States that are attempting to pass bills to legalize marijuana include Arizona, Arkansas, New Jersey, South Dakota, Pennsylvania, Montana, New York, Virginia, New Hampshire, Florida, and New Mexico. States such as these are drawn to legalization due to the numerous benefits to their communities, including increased jobs, increased tax revenue, and the possible therapeutic benefits of the substance for consumers. Additionally, CNN Business recently reported that a wide swath of states are relaxing drug laws that criminalized cannabis use and possession. As more and more states legalize marijuana and decriminalize cannabis use, investors are jumping on board to this burgeoning industry. In fact, Business Insider recently reported that more venture capital money is flowing into cannabis and cannabis-related companies than ever before.
Changing Viewpoints on Low-THC Cannabis and Hemp CBD
The once-taboo idea of consuming or smoking cannabis has become more mainstream. A survey in February 2019 attempted to uncover the reasons why attitudes about cannabis legalization have changed so much in recent years. The survey found that it isn’t about actual marijuana use. Though marijuana use has seen an uptick in recent years, the increase is too small to have had much of an impact on attitudes. Instead, the survey uncovered that what has made the biggest difference is how the media has portrayed marijuana. Up until the 1990s, the majority of media stories about marijuana were related to drug trafficking and abuse. Gradually, more and more news stories came out about the possible therapeutic benefits of the drug on conditions such as pain and insomnia. In fact, the study’s authors report that the image of the stereotypical marijuana user has changed from the “stoned slacker” looking to get high to the “aging boomer” searching for pain relief. Due to this shift in attitudes towards cannabis, legalization is increasing quickly.
Rising Rates of Usage Among Seniors
One of the fastest-rising groups of consumers in the cannabis market are seniors. In fact, a study in the Journal of the American Medical Association found that cannabis use in seniors increased about 75% between the years of 2015 and 2018. In 2006, just 0.4% of older adults used cannabis. In 2018, that number had increased one-hundred-fold to 4.2%. So why has this segment of the market seen such an increase? Researchers from the University of Colorado School of Medicine found that older users used cannabis to improve their overall health, quality of life, and day-to-day functioning.
Seniors are increasingly dealing with health issues, such as pain, insomnia, and other ailments, and many consumers turn to low THC and CBD products in search of relief from these very issues. Clinical studies are starting to catch up to anecdotal data. In fact, a 2008 review (Cannabinoids in the management of difficult to treat pain) found that cannabinoids in cannabis, namely CBD and THC, may help relieve arthritis and nerve pain. Older adults are more at risk for arthritis, pain from prior injuries, and wear and tear on their joints than younger adults. In addition, older adults often deal with insomnia and difficulties achieving periods of deep sleep. Sleep quality is especially important in older adults to help prevent Alzheimer’s disease and dementia, not to mention its importance for maintaining their quality of life. While sleeping pills have a high potential for dependency and can cause numerous negative side effects, CBD and low THC products may be able to help older adults sleep better without the baggage. A 2017 Review (Cannabis, Cannabinoids, and Sleep: a Review of the Literature) found that that CBD and THC can help extend deep sleep, and may also be able to reduce the lighter and restless sleeping phases.
Additionally, a recent study by High Yield Insights found that over half of CBD users consume fewer prescription medications, and 20% of CBD users drink alcoholic beverages less frequently. This backs up the findings of a study in 2018 (The Grass Might Be Greener: Medical Marijuana Patients Exhibit Altered Brain Activity and Improved Executive Function after 3 Months of Treatment), which indicated that cannabis may actually be able improve cognitive functioning. Researchers believe this is due to improved sleep and pain control, in addition to the reduced reliance on pain and sleep medications. Both of these factors combined can greatly improve thinking, especially in older adults.
With more older adults imbibing than ever before and the market for individuals between the ages of 25 and 44 clearly established, investors have a huge opportunity to reach consumers of all legal ages.