As the cannabidiol (CBD) market continues its upward growth trajectory, investors are looking for exposure to this substance. With a mixture of changing laws, scientific findings and changing public attitudes, there seems to be plenty of belief that the market has far from matured.
The current situation
The CBD market is maturing in North America, and while it's defined as a high-risk industry by the likes of payment processors and banks, it’s not especially high risk for investors despite some volatility.
International developments are particularly promising. Germany's cannabis legalization has created a vast European market opportunity, with medical cannabis sales around EUR 450 million and estimated for growth in 2025. The German model increased the legal THC level, and other nations are expected to follow. While Thailand has gone back a step, the CBD-without-THC market is pretty much mature across the Western world. The best CBD online can be purchased anywhere, anytime, and by over two billion customers. Some of those, like India, are in a grey area, while others require varying levels of THC thresholds.
Four CBD investment opportunities
1. Tilray Brands (NASDAQ: TLRY)
Tilray stands out as one of the most diversified companies with substantial CBD exposure. It’s broadly recognized for its medical products, but the firm has now diversified its portfolio into more recreational markets, and this includes CBD-based offerings. The company also has alcoholic beverages, and its quarterly revenue is stable at $210 million - both cannabis and alcohol contributed similarly, though some may argue are contradictory to one another (CBD is more medicinal and less recreational).
What makes Tilray particularly attractive is its operational efficiency though. Tilray booked adjusted EBITDA of $14 million in fiscal Q3 - its 16th consecutive quarter of positive adjusted EBITDA.
2. Canopy Growth Corporation (NYSE: CGC)
Canopy Growth is one of the most significant companies in the industry. It caters strongly to both clinical use and also recreational products, making it a recognized name in the CBD space. The company's established infrastructure and brand recognition provide competitive advantages and straightforward exposure to this market.
Its strength lies in its vertical approach to cannabis cultivation, processing, and distribution.
3. Green Thumb Industries (OTC: GTBIF)
A big player in the cannabis industry, Green Thumb, like Canopy, also focuses on both recreational and clinical marijuana and distribution. It has exposure to the expanding U.S. markets, though shares are only over-the-counter (OTC) currently. Should federal restrictions be lifted, this could become a large IPO and propel them into higher trade volumes.
The company's focus on the U.S. market positions it well to benefit from potential federal policy changes while maintaining strong positions in state-legal markets.
4. Curaleaf Holdings (OTC: CURLF)
Curaleaf Holdings, Inc. is a leading international provider of consumer products with vast CBD exposure across multiple markets. The company reported Q1 revenue of $310 million, and a 50% adjusted gross profit margin ($155 million). Despite some headwinds with revenue down by 9%, the company's international sales showed strong growth - and this is where some of the market’s growth may be realized as a whole.
International market catalysts
International regulation is catching up to the science and is changing favorably towards CBD adoption. Last year, Germany adopted perhaps the most open-minded approach to cannabis among its European counterparts. It’s a major mobe that may inspire its neighbors.
Phase I legalized cannabis cultivation clubs and personal possession. Phase II will introduce regulated marijuana sales. The eyes of many European leaders are watching the success of this phased approach.
But it’s not just about cannabis, but CBD. Germany’s threshold for what THC levels are allowed in CBD products is higher than the UK, for example, and these changes in thresholds can make it easier for CBD sellers.
Scientific validation driving growth
The science behind CBD's therapeutic potential is really coming into its own in 2025. While its claims around anxiety and sleep were mostly anecdotal, these claims are being backed up by more and more research, and this is giving pharma the nod to invest.
Perhaps the strongest piece of evidence is within childhood epilepsy treatment according to specialists within the Massachusetts General Hospital. Clinical trials show that CBD, when consumed orally, cut down motor seizures by over a third among children with severe symptoms.
Insomnia is also being shown to be a condition with positive results from CBD treatment, as is pain. This body of scientific evidence is expanding and creating more certainty within its clinical applications - something that many companies above have exposure to.
Looking ahead
The CBD market is at varying levels of maturity around the world. While some see this as a regulatory risk (e.g., Thailand U-turned), it can also be seen as diversification. No longer is this a US-centric market, and while cannabis, even with growing scientific understanding, may still carry stigma, CBD carries far less concern among lawmakers, making it a less risky investment than purely cannabis-focused strategies.
