Hemp market forecast to hit $20 billion by 2024
Roy Bingham, CEO and co founder of BDS Analytics, a relatively new data firm specializing in the space, gave a presentation on the market at the recent United Natural Products Alliance members meeting in Charleston, SC.
Long history in supplement industry information
Bingham has a long history in the natural products space. He was involved in the foundation of Nutrition Business Journal before the sale of that publication to what is now multinational firm Informa. He also was an early investor in the launch of the SPINS data service, and held a senior position at the probiotics manufacturer Renew Life Formulas.
BDS Analytics, which is based in Boulder, CO, got its start after Bingham teamed up with Liz Stahura, who had run a previous analytical business looking at the markets for outdoor products. The pair were able to more or less reconstitute the team Stahura had assembled, meaning BDS Analytics got a jump start.
The company first looked at medical marijuana and then started branching out into hemp/CBD after that market started to develop following the 2014 Farm Bill, which first opened the door for industrial hemp cultivation.
Market to hit $20 billion by 2024
Now that hemp has been further legitimized by provisions in the 2018 Farm Bill, the market is set to take off. Bingham says the market for hemp products in the US is now about $1.8 billion. But he tentatively predicts it will hit around $20 billion in 2024.
BDS Analytics’ data on hemp goes back farthest in those states that had early medical approval and full legalization votes, like Colorado. He said the pattern he saw there will likely be repeated on the national level for hemp products. After an initial period of steady growth, the Colorado market for went through a period of hyper growth, almost doubling every year. Now the market seems to be maturing with a return to more pedestrian levels of high single digit growth.
“I think what will happen is they’ll have quite exciting sales in the near term,” Bingham said. “I have been looking for an analogy and I think the best one is the initial sales after the approval of pharma grade omega-3s. Or what I experienced with Renew Life in the early days of probiotics.”
Timing could affect forecast; entry of big players likely won’t
Bingham said he’s confident in the $1.8 billion number for the size of the current market. The 2024 forecast depends on how quickly the market gets into the hyper growth phase.
“With forecasting tiny categories the problem is always timing. Will it happen in six months? In 12 months?” he said.
Like others on the fringes of the hemp market, such as contract manufacturers, lab operators and attorneys, Bingham said he has seen big CPG players putting their ducks in a row for entry into the space. Some of the more risk averse will hang back until there is further clarity in the regulatory picture. But the market will grow whether some of the big boys stay on the sidelines or not, he said.
“None of our projections are based on any sort of massive clarifying federal action. Enough major companies will forge ahead anyway,” he said.
