The CBD market is booming. In 2018, it was estimated at $591 million USD, and is projected to grow to $22 billion by 2022. On the heels of the passing of the U.S. farm bill - which legalized CBD products derived from hemp - retailers are looking to leverage their existing supplier relationships to enter the market.
Tilray Inc., a major cannabis producer, recently signed a deal to acquire Manitoba Harvest, the maker of Hemp Hearts. Looking to launch CBD products in the U.S., the deal signals the Canadian-based pot grower's aims to enter the U.S. market with some momentum.
Tilray will be leveraging the Manitoba manufacturing facilities and its supply chain, which already has products in 16,000 stores across North America. With Manitoba Harvest planning to launch their own branded line of CBD-infused sprays, tinctures and soft-gels, its CEO Bill Chiasson views hemp-derived CBD as a vital growth vehicle for the company.
The food manufacturer's product line already includes Hemp Hearts, Hemp Oil, and granola, and Chiasson hopes the transaction will both expand existing business and foster new relationships with retailers. In January, Tilray announced a deal with Juicy Couture-owner Authentic Brands Group, to develop co-branded CBD products, such as foot cream.
Since the U.S. farm bill was passed late last year, cannabis companies across Canada have been looking for opportunities south of the border. But there are still some grey areas in the U.S. legislation. The Food and Drug Administration does not yet allow CBD in foods or beverages in interstate commerce. And while CBD is legal at a federal level, there are variations in legislation between states.
But analysts believe U.S. laws around CBD should clear up by summer, and we'll start to see products in stores. Once Tilray's deal closes, Manitoba Harvest will be a fully-owned subsidiary. Since hemp-derived CBD cannot currently be exported from Canada into the U.S., Manitoba Harvest plans to source and process the compound from U.S. partners for its upcoming product line.