The growth of the CBD industry has also led to a surge in investment. According to data shared in Investment Opportunity Assessment: U.S. Hemp, over $230 million was raised by hemp first in the first five months of last year. Further, Hemp Industry Daily market projections indicate that the hemp-derived CBD industry may grow to $7 billion by 2023.
This raises the question of whether there is something to capitalize on for those who are interested in investing.
A recent article by Market Watch discusses a big issues in the industry when it coms to investment, which is that many cannabis companies are dealing with legal risks. A few or those risks, as the article indicates, are confusion about health risks, no clear guidelines on how to warn, safety warnings may not be sufficient, companies may be tempted to cross the line, cannabis liability is largely unclear, and federal prosecutors can enforce federal marijuana laws based on their discretion. These are major issues that may affect the viability of an investment over the long term.
“There are real risks associated with (THC and CBD), and critical questions remain about the safety of their widespread use in foods and dietary supplements, as well as other consumer products — including cosmetics, which are subject to a separate regulatory framework. Given the new interest in marketing cannabis products across the range of areas FDA regulates, we will need to carefully evaluate how all these pieces fit together in terms of how consumers might access cannabis products.”
“And given the new interest in marketing cannabis products across the range of areas FDA regulates, we will need to carefully evaluate how all these pieces fit together in terms of how consumers might access cannabis products. Nowhere is this truer than with CBD. While we have seen an explosion of interest in products containing CBD, there is still much that we don’t know.”
Investor’s Business Daily reported that as a result of these statements, on the same day they were made, Aurora Cannabis sank 5% on the stock market, along with other marijuana stocks, such as Tilray, Cronos Group, and Canopy Growth, which fell 2.8%, 5.5%, and 4.6% respectively. In addition, it reports that Innovative Industrial Properties, ended flat.
If the FDA does become more involved in CBD regulation, it could create a more turbulent investment market. This consideration, among those discussed above, are just a few that individuals may want to consider.