Prohibition Partners expects to see fully legal CBD food products being sold on the shelves of major retailers in every country in Europe in the next two to five years.
CBD businesses are serving millions of consumers with a variety of products across the continent, says Prohibition Partners.
New data explored in the European CBD Report: Health & Wellness highlights that the CBD market in Europe is set to see a massive influx of previous and new consumers over the coming years.
A new survey of over 5,000 people across Europe, conducted by Prohibition Partners for the report, indicates that the ‘number of consumers and the amount of consumption in Europe is still gradually increasing’.
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CBD is also now one of the most popular wellness products in Europe, with around 11% of the survey respondents stating they has used CBD in the past 12 months. The survey revealed that the most commonly used CBD products were oils and tinctures, followed by hemp flowers.
“These results confirm that CBD is now a commonly purchased CPG [Consumer packaged goods] product across most European countries, despite the lack of regulation and any enforcement of laws.”
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The report suggests that the next major step for the CBD market on the continent will be the acceptance of the products into the Novel Foods catalogues in the EU and the UK.
The report also details how the majority of revenue being generated in the industry is amongst smaller enterprises rather than large public companies, finding revenue growth across European public CBD companies to be strong.
However, it emphasises that the only company turning a profit is Jazz Pharmaceuticals due to an imbalance between revenue and cost of sales, and, as both the operators and market continue to grow in size ‘the losses are mounting’ with six of the leading European public CBD operators increasing their operating losses by 400% between 2019 and 2021.
Despite this, there are a number of companies that are standing firm by the European market, such as Tilray and Charlotte’s Web.
The report states: “This is attributable mostly to the early nature of the market, and the fact that most companies are still fighting for market share before regulations which properly support the industry are in place.
“While it is tempting to think that early arrivals to the market who catch a large part of the share will be the ones to survive consolidation after regulations and enforcement catch up with the industry, the lessons from the Canadian cannabis sector should be borne in mind.
“Over investment across multiple segments of a supply chain has seen the loss of billions of euros from large Canadian companies. While the scale is much smaller for European CBD companies, the lesson remains the same; if profitability is not emphasised early on, it is likely that the company will not reach profitability as the market matures.”
