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As numerous US states legalize recreational marijuana, cannabis-related product sales have skyrocketed. Another niche within the cannabis industry that is performing incredibly well is that of cannabidiol (CBD).
CBD may be performing well at the moment, but are CBD stocks worth chasing? In this article, we will discuss CBD, its uses, and if the demand for this product will continue to grow sustainably.
What is CBD?
To understand why CBD is so popular, let’s look at this compound and its characteristics. Cannabidiol (CBD) is a cannabinoid that is produced by a species of the Cannabis Sativa plant. CBD is not to be confused with tetrahydrocannabinol (THC), a psychoactive cannabinoid that triggers feelings of euphoria.
Instead of interacting with receptors in the central nervous system like THC, CBD interacts with receptors in the immune system to alleviate pain and inflammation and to help users relax.
When you consume CBD oil, you are not likely to get high, unless there are high levels of THC in the oil. CBD is also believed to stop cancer cells from spreading, and there is anecdotal evidence that it is an effective treatment for seizures and autism.
Suitable for Use by a Broad Market
CBD extracts are suitable for use in a wide range of derivative products, including edibles, oils, beverages, vaping liquid, tobacco, topicals, and even sweets for children. The prices of these derivative products are much higher than that of raw cannabidiol, and it is for this reason that CBD stocks are worth chasing.
Since companies can use CBD extracts in all sorts of products, it allows for product differentiation to serve many different target markets. Consumers can access these products through a number of venues, including online stores, malls, coffee shops, convenience- and health-food outlets, as well as mail order stores. A consumer can also purchase a product derived from CBD through state-regulated medical programs.
Easy access and derivative products to suit every need are crucial contributors to the CBD industry’s growth. According to the Brightfield Group, CBD revenue in the United States may be as high as $23.7 billion by 2023.
Regulatory and Safety Issues
The CBD industry may be performing incredibly well, but it’s still in a hazy legal and regulatory situation, and many consumers still have concerns about its safety.
According to the World Health Organization, CBD has a good safety profile and is generally safe for consumption. There are, however, several risks to consuming CBD, and it can cause side effects such as dry mouth, diarrhea, drowsiness, and a reduced appetite. CBD can also react negatively with other medications, for example, blood thinners.
“The legality of CBD oil in the United States is another concern, and it is one that can potentially affect the performance of these products. CBD oil that is made from industrial hemp, and that has a THC content of 0.3 percent or less, is federally legal thanks to the 2018 Farm Bill.” says Daniel Smith of Royal CBD, a California-based vendor of pure CBD oil for sale.
The problem is that every state has different laws pertaining to CBD oil. For example, the states of Idaho, Nebraska, South Dakota, and Alabama are not friendly towards CBD, and they consider this compound to be on par with marijuana. Additionally, the laws of these states are still in the process of catching up with the 2018 Farm Bill.
So, Are CBD Stocks Worth
As the research on CBD and its effect on the body continues, it is likely to become less regulated and more popular as a treatment for ailments and health conditions. Because of these factors, the CBD industry may still be in its infancy and a worthy investment consideration.