According to a recent report by market researchers at CBD-Intel, Germany’s CBD vape market is expected to decline to approximately $8.4 million by 2025 from a current market share of $18 million, a sweeping reversal for the booming CBD industry.
In July, German lawmakers passed regulatory restrictions affecting the tobacco industry, which includes non-tobacco vaping products such as CBD. The restrictions will impact advertising and reporting requirements for CBD vaping products.
Specifically, the new law will apply to outdoor advertising, advertisements prior to film screenings and free samples offered to consumers.
Prior to the legal update, CBD vaping products without nicotine were classified outside the umbrella of tobacco products, effectively exempting them from the auspices of the German Tobacco Products Act, which prohibits ads for nicotine and tobacco products in print, digital media, radio and even online.
Currently, the EU requires producers and importers of tobacco and e-cigarettes containing nicotine to report product ingredients, emissions, nicotine content and production processes to national authorities. The new law would place CBD vaping products on an equal footing with the aforementioned products.
In terms of advertising restrictions, the legal amendment aims to protect children from CBD vaping products, which effectively limits all advertising to store windows and walls.
Describing the potential impact of the legal changes, head of market intel at CBD-Intel Nate Erskine told Hemp Industry Daily, “Our assumption is that the format (of CBD consumption) is niche and lacks the characteristics and acceptance for mass-market adoption.”
Erskine further added, “Ultimately we don’t see a high-growth scenario for vape like in other formats such as edibles, topicals, cosmetics,” marking a major shift in Germany e-cigarette market.
While the full impact of the law remains unclear, Erskine expects CBD products for e-cigarettes to become less accessible under certain circumstances. According to CBD-Intel, Germany has the third largest market for these products next to France and the U.K.
Whether we will see legal updates in France and the U.K. remains to be seen. One thing is for certain; however, the news is certainly unwelcome to firms operating within this niche segment of the wider CBD market.
Of course, CBD products such as topicals and tinctures will continue to conduct business as usual. This by no means the end of the CBD industry in Europe.
Photo courtesy of Christian Wiediger at Unsplash