Demand for CDB Products Having an Impact on Real Estate Industry

Demand for CDB Products Having an Impact on Real Estate Industry

CDB is being added to an increasing number of goods. Some examples include lotions, pain creams, bath products, dog treats, supplements, beverages, baked goods, lip balms, candles, massage oils, olive oil, honey, candy and a broadening variety of foods. The list is virtually endless. As the popularity of these and other CBD-infused items grows, cultivators and manufacturers will need to find more space for production to meet the growing demand, impacting the real estate industry.

Popularity of CBD-infused Goods

Cannabinoidol (CBD) is derived from the Cannabis stevia plant. Though it’s related to the marijuana plant, CBD contains no tetrahydrocannabinol; popularly known as THC, this is the psychoactive component in marijuana that delivers the “high” effect. Instead, CBD’s reputed beneficial effects rely on molecular pathways and interactions that are free of the mind-altering effects associated with marijuana.

Both scientific and anecdotal evidence tout the benefits of CBD, said to have a positive impact on health, wellness, mood, sleep habits, and pain control. It’s no wonder than, that consumer demand for this “miracle” product is high and continues to grow. New Frontier projects that hemp-derived CBD sales may grow to more than $1.15 billion over the next four years. The Cannabis market data firm predicts that changes in legislation under the 2018 Farm Bill will encourage mass market retailers to join the CBD goods industry.

The Legality of CBD

The 2018 Farm Bill was signed into law on December 20, 2018. This new $867 billion law makes the commercial cultivation and sale of hemp lawful. It also allows interstate hemp commerce. The law limits the production of hemp to cannabis plants that contain no more than 0.3 percent THC. This directly impacts CBD that’s harvested from industrial hemp, removing it from the controlled substances list and protecting is as an agricultural hemp-derived product.

The Food and Drug Administration still offers a bit of roadblock. It doesn’t differentiate between marijuana-derived and hemp-derived CBD. Instead it prohibits the addition of CBD to any foods. The FDA also claims that CBD isn’t a dietary supplement, but a drug, and requires FDA approval for use in food, drinks and supplements. This stance is one that bears watching. But, thus far, the FDA hasn’t been aggressive in enforcement of this CBD prohibition. It typically acts only when interstate commerce and online health claims are involved.

Production of CBD Items

With the passage of the new farm bill, CBD advocates are predicting a monumental shift in how CBD-infused products are marketed and sold. The legality of making CBD-infused products means large retailers will be eager to add these items to their shelves. This change in the law is likely to impact the entire supply chain, from cultivation and packaging to sales and marketing. Mainstream manufacturers, suppliers and distributors won’t want to miss out on a market as lucrative as CBD products.

Real Estate Needs for Hemp Cultivation and CBD Goods Production

To meet demand for CDB products, farmers need to grow more hemp crops. This means a need for more acreage. Once the hemp is grown and sold, manufacturing companies take over production of the CBD oil and CBD-derived products. An increased need for space and manufacturing facilities is anticipated.

This new law will encourage financial institutions to provide services to professionals in the hemp industry and offer loans to farmers and small businesses involved in the production of hemp and hemp-derived products. This will free up more operating capital and give these businesses and entrepreneurs the funds to lease and purchase necessary land and other real property.

Consumers are demanding CBD products. Smart business owners are eager to meet that demand and realize the profits associated with this booming market. Real estate needs are poised to increase in this industry in order to support this growth. It’s a fast-developing industry that will gradually impact a number of other sectors.

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December 27, 2018Comments Off

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