Startup Trends: CBD - KingsCrowd

May 24, 2022

Startup Trends: CBD

Recently, the cannabidiol (CBD) industry has seen a drastic increase in popularity. As public perception of CBD use has positively shifted across the US, state laws and production regulations have too. The medical use of marijuana was first legalized in California in 1996, and several states passed legislation legalizing CBD in 2014. At the end of 2018, the Farm Bill legalized the production, possession, and sale of CBD derived from hemp with a delta-9-tetrahydrocannabinol (THC) concentration no more than 0.3%. Today, each state determines its own regulations, which results in additional flexibility for CBD companies and new market opportunities for expansion. The map below depicts CBD regulations by state and programs to support CBD use.

 

Source: CBD.market

CBD popularity has grown largely because scientific research provides evidence that it has several medical uses, general benefits, and relatively few negative side effects. The COVID-19 outbreak and associated economic concerns, however, slowed down CBD industry sales as consumers favored more essential products. In 2020, the sales were expected to reach $8.1 billion, yet many relevant companies’ sales plunged by 50%. Nevertheless, CBD sales and popularity are spiking up again, resulting in an uptrend. The CBD market sales is expected to grow by 21.2% from 2021 to 2025, reaching $14.1 billion in 2025. Additionally, if the FDA approves CBD as a dietary supplement and further regulates the CBD industry, the market is expected to reach $19.5 billion by 2025. 

At KingsCrowd, we have covered multiple CBD startups utilizing online startup investing. Below are some recent raises from companies offering CBD products: 

UNITY Wellness

UNITY Wellness makes drinks with CBD and adaptogens as well as plant-based protein bars with CBD. The company has more than 20 regional distributors across the US and is continuing to expand. It brought in more than $1 million in 2021 revenue. UNITY Wellness is a seed stage startup that’s raising up to $1.07 million on Wefunder.

 

Stigma Cannabis

Stigma Cannabis is a retail CBD brand that plans to expand into the legal cannabis market in Michigan. The company was an early mover in the CBD market within Minnesota and currently offers CBD-based gummies, oils, creams, and capsules. It plans to focus on the Midwest as it grows both its CBD business and legal cannabis operations. Stigma Cannabis is a pre-seed stage startup that’s raising up to $250,000 on Silicon Prairie Online.

 

BeoFior

BeoFior is a skincare company that produces vegan, plant-based skincare products infused with CBD. The company focuses on sustainability by using renewable energy in its operations and producing goods in small batches. Its products have received recognition from Vogue and Amazon Indie Beauty. BeoFior is a seed stage startup that’s raising up to $1.07 million on Republic.

 

Zenlabs Holdings

Zenlabs Holdings is a plant nursery that grows hemp and cannabis clones for the production of CBD and THC products. The California-based company has a proprietary process for preventing disease or pests from damaging the plants it grows. It also offers gene banking and genetic restoration services for distributors that are focused on a specific strain. Zenlabs Holdings is a seed stage startup that’s raising up to $17.5 million on Dalmore Group.


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