When hemp and cannabidiol (CBD) finally hit the stock market – after decades of nationwide prohibition – many investors saw an opportunity. However, in 2019, much of the optimism behind hemp’s stock jump came tumbling down – namely due to an overabundance in products and lack of demand for this quantity.

So, where can we expect the hemp stocks into the future?

This is a tricky question to ask and you should be wary of any article that claims they know where the stock market is heading. While educated guesses can be insightful, no one really knows whether a stock is going to go up or down. There are a number of different factors that play a large role in this outcome, many of which are unique to the particular industry.

In terms of the hemp industry, attention currently lies in the U.S. government as their future regulations are going to play a significant role in hemp stocks. For example, some experts have predicted that cannabis extracts in foods and beverages could show an increase in demand for CBD. However, the Federal Food and Drug Administration (FDA) currently bans sale of CBD in food and beverages.

There are two major problems with government regulations that are playing a significant role in hemp and CBD sales:

1. A lack of FDA approval diverts much of the public’s trust and knowledge for the CBD market. Not to mention, it allows businesses with irresponsible practices to enter the marketplace.
2. Overregulation on particular matters – such as CBD in food and beverages – prevents consumers from trying CBD through new avenues.

With the right governmental regulations, CBD does have the potential to work its way up again.

Still, we shouldn’t forget that part of the reason it went down in the first place has to do with overproduction. The fact is, many experts claimed there would be a huge demand for CBD when the 2018 Farm Bill legalized hemp and hemp-derived products nationwide. While there was an initial spike in demand, the predictions were far from accurate and the market just wasn’t there.

With all this said, it’s impossible to know what’s going to happen next. If government regulations work in favor of the hemp industry, consumer confidence can lead to an upward trend in the market place. However, the opposite remains possible – government regulations creating skepticism in the marketplace.

Since the hemp industry is still very new, we need to remember how important the role of spreading knowledge about this plant is. Currently, there’s too much misinformation out there and, with that, a lack of trust overall in hemp in CBD.