How Industrial Hemp Could Drive Growth In The Cannabis Industry

These levels of expected growth rates and heightened demand show why this segment of the cannabis industry has witnessed a flurry of companies joining the market. As a result, research reports suggest the increasing number of players in the market could lead to an oversupply in the manufacturing sector, thereby affecting prices. This is expected to be one of the minor drawbacks in the industrial hemp market as the overall cannabis market continues to experience impressive growths across all segments.

Challenges facing the cannabis market

In medical cannabis, companies engage in long exploratory research studies before finally launching a product. They are then required to go through various approval processes before their products can finally hit the market.Despite such long and taxing procedures, medical cannabis continues to highlight some of the major breakthroughs in the cannabis industry. This section of the industry has gained legalization in 30 states in the U.S. so far while most countries across the world have also embraced it. Nonetheless, mainstream drug manufacturers are still a major threat to medical cannabis growth prospects because of the stigma the market receives from various regulatory bodies and market experts.

On the other hand, companies operating in the industrial hemp market tend to face fewer bottlenecks, with shorter research periods needed to develop products and gain approvals from relevant authorities. However, in terms of general legalization, a lot is still pending in many countries and this is a huge challenge.

For instance, in the U.S. hemp is yet to gain as many legal statuses as has medical cannabis. Industrial hemp for commercial production is only legal in 17 US states while a further 18 states have legalized hemp for research purposes only. This explains why its projected market value through 2025 of about $10 billion only equates to that of medical cannabis in the U.S. three years earlier in the time frame.

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Disclosure: No position in companies mentioned in this article. Investors should be wary of thinly traded micro-cap stocks mentioned as they have high-risk thresholds. Industry research reports ...

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Weed Investor 1 year ago Member's comment

Has your opinion changed at all since writing this article?