The legalization of hemp in the United States, pushed by the 2018 Farm Bill, has greatly contributed to the explosion of CBD in the United States. According to a recent study by the Brightfield Group, sales of CBD products derived from hemp could reach $23 billion by 2023.
The Hemp Cultivation Landscape report estimates that hemp growers /could earn $40,000 in revenue per acre (0.4 hectares) once the market is fully mature.
Today in the United States, only 4 states still prohibit hemp cultivation. The hemp boom in particular led to a fourfold increase in the area under cultivation between 2018 and 2019.
The study estimates that 87% of the area cultivated with hemp should be oriented towards the extraction of CBD, the rest towards the traditional industrial uses of hemp. This percentage is expected to decline to 82% by 2023 as the industry consolidates. Analysts predict that hemp cultivation will increase by 75% over the next four years, for a total of 2.7 million acres (1 million hectares) of hemp by 2023.
Colorado is currently the leading state in terms of the quantity of hemp grown, with 42,500 acres this year (17,000 hectares), the equivalent of industrial hemp cultivation in France. Oregon and Montana are almost tied for second place, with 29,859 and 29,400 acres. Then come Tennessee (20,000 acres), Arizona (18,000 acres) and Michigan (16,122 acres), which are becoming major hemp producers.
The report notes that many farmers choose cloned plants over seeds, mainly to ensure that only female plants are produced. CBD levels are highest in unpollinated female plants, and cross-pollination from male plants can reduce total CBD yields. This has resulted in a shortage of certified feminised hemp seeds and clones, which has increased the risk for farmers to grow crops with low CBD levels.
This is why some CBD companies build their business strategy with a focus on high product quality. Such is the case with Veritas Farms Inc. (OTC: VFRM) whose line of full spectrum hemp oil products are becoming increasingly popular with consumers. Veritas has a certificate of analysis for all of their product categories available online and rolled out innovative QR code packaging that allows customers to instantly verify the quality of their purchase by using their smartphones.
Their products are already available at 4,500 retailers across the U.S. including 1,350 Kroger Family of Stores locations, and recently the company managed to secure a deal with Winn-Dixie and Bi-Lo supermarkets. With this partnership, Veritas’ products will be available at 152 Winn-Dixie and Bi-Lo supermarkets in Florida and South Carolina. It is not easy to pass Winn-Dixie’s product due diligence, and the fact that Veritas Farms passed it, adds to the record of quality on the company’s impeccable reputation.
Veritas Farms has been very successful. The company generated more than $2.9 million in total revenue by Q2 2019, which is a 500% increase in comparison to Q2 2018, with gross profits skyrocketing by almost 800% to $1,523,413.